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TMI Blog1991 (4) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the case, Learned CIT(A) erred in deleting the disallowance of Rs. 8,25,000 being leave and licence fee payable to Everlite Pvt. Ltd. 3. On the facts and in the circumstances of the case, Learned CIT(A) erred in directing to allow Investment Allowance on Boring Rigs not used for Investment allowance for the purpose of assessee's business. 4. On the facts and in the circumstances of the case, Learned CIT(A) erred in directing to exclude the expense for hiring registered taxies from the purview of calculation for disallowance under section 37(3A). " 2. The first three grounds being covered by orders of Appellate Tribunal in assessee's own case for earlier years we would take up the last ground of appeal first. The facts relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er motor cars hired on hourly or distance basis. " 4. The revenue is aggrieved and has brought the issue in appeal before the Appellate Tribunal. Before us Shri J. Mukhopadhyay, the learned departmental representative strongly contended that provision of section 37(3A) was applicable to all kinds of hire charges incurred by the assessee. The learned CIT(Appeals) was not justified in drawing a distinction between the hire charges paid for public or private taxies and other motor cars hired on hourly or other basis. He, therefore, submitted that the order of the Assessing Officer on this point should be restored. Shri A.K. Gupta, the learned counsel for the assessee, on the other hand, contended that the above provision was applicable only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sub-section (3A) is that incurred on--- (i) advertisement, publicity and sales promotion; or (ii) running and maintenance of aircraft and motor cars; or (iii) payments made to hotels. Explanation (c) : Expenditure on running and maintenance of aircraft and motor cars shall include--- (i) expenditure incurred on chartering any aircraft and expenditure on hire charges for engaging cars plied for hire; (ii) conveyance allowance paid to employees and, where the assessee is a company, conveyance allowance paid to its directors also. " 6. The word "hire" is synonymous with word "charter", hire being the general term while charter commonly applied to vessels whether they be ships or ferry boats. Again "hire" simply means price, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenance of aircrafts and motor cars. The legislature, therefore, provide that if aggregate of expenditure incurred on any one or more of items specified in sub-section (3B) exceeds one hundred thousand rupees, twenty per cent of such excess should be disallowed. Thus, expenditure incurred on items mentioned in sub-section (3B) in excess of one hundred thousand rupees was considered to be unreasonable and on that basis part of it was directed to be disallowed. The provision is applicable to expenditure like advertisement, maintenance of car, payment to hotel, conveyance allowance to employees, etc., all incurred wholly and exclusively for purposes of the business. Therefore, there is no difficulty in holding that "hire charges" incurred for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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