9911796707
TMI Blog1990 (4) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 13,689 (3) Car lease rent Rs. 37,352 . Rs. 95,777 3. The CIT(A) upheld the action of the ITO in bringing the aforesaid items within the ambit of s. 37(3A). 4. The learned counsel for the assessee was at the outset fair enough to concede that the amount of Rs. 37,352 being the lease rent for cars was squarely hit by the provisions of s. 37(3A) and was required to be disallowed to the extent stated in the said section. In so far as items 1 & 2 were concerned, the learned counsel furnished for our perusal the details of such expenditure with the submission that these did not have any advertisement value and that the expenditure had been incurred only with a view to comply with various statutory provisions or to recruit staff. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of statutory notices as also advertising for "deposits and loans". On the facts and circumstances of the case, however, it would not be possible to state as to the percentage of expenditure which could be attributed to advertisement and the percentage of expenditure which could be attributed to the other activities, namely, recruitment of staff and compliance with the statutory requirements. In our opinion, 50 per cent of the total expenditure on items 1 and 2 aggregating Rs. 58,425 would be required to be considered under the provisions of s. 37(3a) whereas the balance 5 per cent would be required to be excluded. We direct accordingly. It may not be out of place to mention that in the present times there is very stiff competition amongst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t brought about by the Taxation Laws (Amendment) Act, 1984 and which had been discussed by the ITO in the assessment order. Further supporting the order of the ITO the learned Deptl. Representative invited our attention to Expln. 2 to s. 40A(5) wherein it was clearly stated that the term "salary" would have the same meaning as assigned to it in s. 17. This according to him meant that the leave encashment would also be treated as part of the salary for purpose of computing the disallowance under s. 40(c). 7.3. In reply, the learned counsel for the assessee was fair enough to concede that the amount of "leave encashment" would have to be included for purposes of working out the disallowance under s. 40(c) and that also in view of the retros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be allowed in full and not subject to the provisions of s. 80VV. 8.1. The learned Deptl. Representative on the other hand supported the orders of the tax authorities with the further submission that the Sur-tax Act was in fact an extension of the IT Act since the computation under the Sur-tax Act depended on the computation made under the IT Act and both of them were interlinked. In this view of the matter he made an impassioned plea for the rejection of the viewpoint canvassed by the assessee's counsel. 8.2. We have examined the rival submissions and in our opinion there is merit in the arguments advanced by the assessee's counsel. Sec. 80VV (since omitted) reads as under: "In computing the total income of an assessee, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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