1995 (3) TMI 158

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....xt ground of appeal i.e., ground Nos. 4.1 and 4.2 is against the upholding of the disallowance at Rs. 1,75,000 under section 37(4) of the Income-tax Act. 9.1 At the time of hearing before us it is submitted by the ld. counsel for the assessee that the Assessing Officer has disallowed the rent paid for the guest house. He submitted that section 37(4) starts with he non obstante clause and states....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ted that in any case if two views are possible, the view which is favourable to the assessee should be adopted. In this respect, he relied upon the decisions of the Hon'ble Supreme Court in the cases of CIT v. Vegetable Products Lid [1973] 88 ITR 192 and CIT v. J.K. Hosiery Factory [1986] 159 ITR 85. 9.2 The ld. DR on the other hand, supported the order of the CIT (Appeals).She submitted that t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....h Court or Gujarat High Court or before the Tribunal at the time of hearing of the cases cited by the learned counsel for the assessee. She also relied upon the following decisions : 1 . CIT v. Ocean Carriers (P.) Ltd [1995] 211 ITR 357 (Bom.) ; 2. Kesoram Industries & Cotton Mills Ltd v. CIT [1991] 191 ITR 518 (Cal.) ; 3. CIT v. Upper Ganges Sugar Mills Ltd. [1994] 206 ITR 215 (Cal.) ; a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....entury Spg. & Mfg. Co. Ltd. and in the case of Chase Bright Steel Ltd. have taken the view that the disallowance under section 37(4) shall be restricted to the expenditure allowable under subsection (1) or sub-section (3) of section 37 only. The expenditure which are permissible under other sections, say, section 30 (rent) or section 32 (depreciation) are not disallowance under section 37(4) thoug....