1986 (10) TMI 84

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.... repairs to buildings respectively. " The contention of the learned departmental representative was that since under section 37(4) of the Income-tax Act, 1961 ('the Act'), no expenditure whatsoever incurred by the assessee on the maintenance of a guest house can be allowed, the learned Commissioner (Appeals) was wrong in allowing the expenditure on account of repairs and depreciation. 5. The assessee was maintaining a guest house on which the total expenditure amounted to Rs. 5,54,804 out of which Rs. 27,814 represented depreciation on buildings and furniture and fittings and a sum of Rs. 61,795 represented repairs. According to the learned Commissioner (Appeals), the expenses on these two items were allowable under section 32 of the ....

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....ribed. " Then sub-section (4) of section 37 is a further proviso not only to sub-section (1) but also to sub-section (3) aforesaid and it provides that no allowance shall be made in respect of any expenditure incurred on residential accommodation in the nature of a guest house. Sub-clause (ii) of section 37(4) thereof further provides that no allowance shall be made in respect of depreciation of any building used as a guest house or depreciation of any assets in a guest house. Thus, sub-clause (i) of sub-section (4) of section 37 is general and covers all expenditure on the maintenance of a guest house. This would cover repairs to the building. Sub-clause (ii) is specific and covers the notional expenditure in the nature of depreciation.....