TaxTMI 
TaxTMI 
2010 (2) TMI 399
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....Whether the appellate authorities were correct in holding that transit house maintenance expense is an allowable deduction despite the Assessing Officer having held that the same was a guest home expense which was not allowable under section 37(4) and 37(5) of the Act ?" 2. The facts leading to this appeal are as hereunder : 3. The assessee-company filed its return of income for the assessment year 1996-97. In the return of income it claimed a deduction of Rs. 10,61,253 being expenses incurred by it in respect of transit accommodation provided to its employees. Contending that the transitory accommodation claimed by the assessee more in the nature of a guest house, the claim of the asses-see was disallowed. Being aggrieved by the orde....
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.... transit residential house has to be treated as a guest house and not liable for deduction. Therefore, he requests this court to set aside the orders passed by the Commissioner of Income-tax (Appeals) and the Tribunal by answering the question of law in favour of the Revenue. 5. Per contra, the learned counsel for the assessee contends that the premises maintained by the assessee as a transitory accommodation to its employees cannot be equated as a guest house and that the respondent-assessee is not maintaining the transitory accommodation to entertain the guests and it is also her contention that such residential premises are also not used as a holiday home in order to distinguish the premises as a guest house or holiday home. Therefore....
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....uent assessment year, 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 : Provided that the aggregate of the expenditure referred to in clause (i) and the amount of any depreciation referred to in clause (ii) shall, for the purposes of this sub\section be reduced by the amount. if any, received from persons using the guest house : Provided further that nothing in this sub-section shall apply in relation to any guest house maintained as a holiday home if such guest house- (a) is maintained by an assessee who has throughout the previous year employed not less than one hundred whole-time employees in a business or profession carried on by him ;....
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....0. Upon reading of sub-section (5) of section 37 of the Income-tax Act, it is clear to us that even if an employee on tour or visit to a place, at which such accommodation is situated, has to be treated as a guest house within the meaning of sub-section (5) of section 37 of the Act. 11. When the provision of law is very clear that, if any lodging or boarding to an employee of the assessee is provided by the assessee either such employee is on tour or visit to a place at which such accommodation is situated and if such accommodation is used by an employee, the same has to be treated as a guest house only even though the assessee calls it as transitory accommodation. By merely changing the nature of nomenclature the actual use of the accom....