TaxTMI 
TaxTMI 
2014 (4) TMI 1112
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....were maintained at far flung places due to business expediency and as hotels were not available in these places, expenditure on the same is allowable as revenue expenditure. The learned CIT (A) further erred in not accepting appellant's contention that expenses specifically allowable uls,30 to 36 can not be disallowed as per provisions of Section 37(4) as well as that Section 37(4) is limited to disallow maintenance expenses and not the running expenses. Ground of Appeal No.2 {page 30 of CIT (A)'s Order} Recovery of Guest House Expenses considered under Rule 6D Rs.11,12,710 The learned CIT (A) erred in rejecting appellant's claim that recoveries made in respect of Guest House expenses should be treated as travelling expenses, on which Rule 6D should apply and expenses proportionately disallowed and not the entire disallowance of recoveries as 'Guest House Expenses.' Ground of Appeal No.3 {Page 31 of CIT (A)s Order} Disallowance under Rule 6B with respect to Calendars and Diaries Rs.1,47,600 The learned CIT (A) erred in disallowing expenditure on Diaries and Calendars on the ground that the same has Company's logo f....
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....pur Rs. 25,54,500 The learned CIT (A) erred in disallowing contributions to institutions on the ground that such expenditure was not incurred for the purposes of the business, having failed to understand the scenario that establishes nexus between the contributions made and the business of the appellant. Ground of Appeal No.12 {Page 105 of CIT (A)'s Order} Fees paid to Consultants for Feasibility Studies Rs. 4,83,584 The learned CIT (A) erred in disallowing Rs. 4,83,584 being fees paid to the Consultants for carrying out feasibility studies on the ground that it constitutes capital expenditure. Ground of Appeal No.13 {Page 109 of CIT (A)'s Order} Expenditure on Immovable Assets in Bhutan Rs. 4,99,898 The learned CIT(A) erred in disallowing expenditure incurred on immovable assets in Bhutan on the ground that the same is capital expenditure. Ground of Appeal No.14 {Page 115 of CIT (A)'s Order} Disallowance under Rule 6DTravelling Expenses Rs. 6,50,000 The learned CIT(A) erred in confirming adhoc disallowance of Rs. 6,50,000 in respect of travelling expenses o....
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....ge 41 of CIT (A)'s Order} Expenditure on business meetings and conferences of employees Rs. 4,63,114 The learned CIT (A) erred in holding that the expenditure incurred on the business meetings and conferences as entertainment expenditure incurred under the provisions of Section 37(2A) of the Incometax Act. Ground of Appeal No.5 {Page 78 of CIT (A)'s Order} Disallowance of Tata Steel Rural Development Society ExpenditureRs.2,93,37,620 The learned CIT (A) failed to appreciate the circumstances in which expenditure through the medium of TSRDS was incurred and erred a treating the same as non-business expenditure. Ground of Appeal No.6 {Page 80 of CIT (A)'s Order} Contribution to Tata Sports Club Rs. 3,88,654 The learned CIT (A) erred in holding that contribution to Tata Sports Club is covered by the provisions of Section 40A(9). Ground of Appeal No.7 {Page 90 of CIT (A)'s Order} Contributions to various Institutions in Jamshedpur Rs. 85,00,889 The learned CIT (A) erred in disallowing contributions to institutions on the ground that such expenditure was not incurred for the purposes of th....
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....disallowing expenditure on digging of tubewells in the villages surrounding Sukinda Mines on the ground that the same was philanthropic in nature and not incurred wholly and exclusively for business purpose. Ground of Appeal No.16{Page 225 of CIT (A)'s Order} Loss on revaluation of Foreign Currency Convertible Bonds1,80,00,000 The learned CIT(A) erred in disallowing the loss on revaluation of Foreign Currency Convertible Bonds on the ground that the same was a notional loss, which had not crystallized. Ground of Appeal No.17 Contribution of Institute for Miners & Metal Workers Education. 7,50,000 The learned CIT(A) erred in not considering appellant's contention that contribution made for training of employees is deductible as revenue expenditure. Ground of Appeal No.18 The learned CIT(A) has committed error in recording some facts in his Order. The appellant craves leave to produce before the honourable ITAT correct facts at the time of hearing. The Appellant craves leave to add to, alter or amend the above ground of appeal. ITA No. 3970/Mum/2003 Ground of Appeal No.1{Page 24 of CIT(....
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.... Appeal No.7 {Page 109 of CIT (A)'s Order} Expenditure on Immovable Assets in BhutanRs. 2,74,374 The learned CIT(A) erred in treating expenditure on immovable assets in Bhutan as the one in capital field from which the appellant has derived enduring benefit. Ground of Appeal No.8 {Page 115 of CIT (A)'s Order} Disallowance under Rule 6DTravelling Expenses Rs. 7,00,000 The learned CIT(A) erred in confirming adhoc disallowance of Rs. 7,00,000 in respect of travelling expenses of Auditors, Technicians and Consultants. Ground of Appeal No.9 {Page 116 of CIT (A)'s Order} Expenditure incurred on Darjeeling Holiday Homes Rs. 1,97,850 The learned CIT(A) erred in treating Darjeeling Holiday Home as Guest House, rejecting appellant's contention that the same is covered by the second proviso to Section 37(4). Ground of Appeal No.10 {Page 174 of CIT (A)s Order} Rights Share Issue Expenses Rs. 1,89,86,431 The learned CIT (A) erred in treating expenses incurred on Rights Share Issue as capital in nature. Ground of Appeal No.11 {Page 41 of CIT (A)'s Order} Expenditure on business me....
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.... 7,92,23,433/-as deduction on account of provision for leave salaries." 2."On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the A.O.to allow 20% of initial contribution as deduction in the year in which the initial contribution was made to the approved superannuation fund.' 3."On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the A.O. to allow Rs. 15,78,178/on account of payment for holiday plan at hotels as guest house expenses." The appellant prays that the order of the CIT (A) on the above grounds be set aside and that of the ITO/AC/DC be restored.The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. ITA No. 3987/Mum/2003,AY-1995-96 1."On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the A.O.to allow Rs. 16,98,99,242/-as deduction on account of provision for leave salaries." 2."On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the A.O.to allow 20% of initial contribu....
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....ial contribution to approved superannuation fund. G.2-1991-92,1994-95,95-96 Payment for holiday plan at hotels as guest house expenses G.3-1991-92,G.4-1994-95,95-96 Exclusion of sales tax,excise duty for 80HHC deduction G.4-1991-92 Foreign Travel Expenses G.4-1995-96 During the course of hearing before us,Authrorised Representative(AR)of the assessee did not press Grounds no.13-17for the AY.1991-92,Grounds no.8(part)10,11,12,14 and 18for the AY.1994-95, and Grounds no.7,8,9 and 13 for the AY.1995-96,hence,same stand dismissed as not pressed. Assessee-company is engaged in the business of manufacturing and sale of iron and steel materials. Details of dates of filing of returns,incomes returned,dates of assessment,assessed incomes,dates of orders of the CIT(A)can be summarised as under : AY. Dts.of filing of Return Returned Income (Rs.) Dates of assessment Assessed Income Dt. of orders of CIT(A) 1991-92 30.12.1991 94.63 Crores 23.03.1994 1,41,46,96,420/ 21.02.2003 1994-95 30.11.1994 (-)3,16,82,64,010/ 09.05.1996 2,53,15,57,413/ 21.02.2003 1995-96 30.11.1995 242,65,59,783/ 31.03.1997 ....
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....hich was incurred at the guest house was also included in the disallowance under Rule 6D. 3.1.Against the order of the AO assessee preferred an appeals before the FAA.Considering the material available,he held that the assessee provided guest houses to its employees at various places,that it collected cash for providing lodging or boarding and lodging to the suppliers and business associates,that in the case of the employees, no cash was collected and a debit note was raised,that the procedure adopted by the AO was correct,that the notional recoveries were book entries only,that the assessee debited the notional guest house expenses to the travelling expenses account and credited the same to guest house expenses account,that the assessee had quantified the disallowance under Rule 6D for all the three AY.s,that the amount allowable under Rule 6D would get reduced in a case where the lodging or boarding and lodging were provided,that the notional recoveries attributable to employees in respect of the guest house had been rightly not allowed as reduction from the guest house expenses by the AO.Finally,disallowance mentioned above was upheld by the FAA. 3.2.Before us,representati....
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....g the orders for the earlier AY.s,we decide Ground no.2 for all the three AY.s in favour of the assessee. 4.Third common ground of appeal(Ground no.4 for 1991-92 and Ground no.3 for1994-95and199596)is about Disallowance of AGM Expenses of the shareholders.AO.s had made disallowances of Rs. 87,240/-,Rs.1,45,674/and Rs. 1,98,161/-respectively for the AY.s under appeal u/s.37(2A) / 37 (2)of the Act and the FAA had upheld their orders. 4.1.AR agreed that issue was decided against the assessee by the Tribunal in the orders for earlier AY.s.We find that in the order for the AY.s.1987-88,1989-09 and 1990-91 (supra),Tribunal had decided the issue as under: "17.The very same issue arose for consideration in assessee's own case in A.Y. 1988-89 in I.T.A. No.3222/ Mum/92 and this Tribunal has taken a view that serving of tea,coffee arnd soft drinks to shareholders at Annual General Meeting is not expenditure in the nature of entertainment by following the ruling to that effect in the case of CIT vs. Mysore Minerals Ltd.,126 ITR 437(Kar). The learned CIT(A)has,however, distinguished the decision in the case of Mysore Minerals Ltd. (supra) as follows: ' The definition of ....
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....s,Rs.4.63lakhs and Rs. 27.02 lakhs under the said head for the years concerned. 5.1.In the appellate proceedings, FAA held that the assessee had conducted business meetings at hotels with the employees, that there was no doubt that the expenditure was incurred for the purpose of the business, that the expenditure was not incurred in the office but was paid to the hotels, that it was clear from the Expl.2 to section 37(2A)/37(2) that the expenditure incurred on the hospitality of employees was excluded from the definition of the entertainment expenditure provided the expenditure is incurred in office/factory or other place of their work, that in the case under appeal the expenditure was incurred in the hotels, that the expenditure incurred on entertainment at hotels attributable to employees could not be brought under the expression other place of their work,that the expression had to be interpreted in the context in which other words preceding the expression were used, that the other words used were office/or factory, that 'other place of their work'had to be similar to office/factory, that normally, the said expression included places such as mine, work site, drilling-site, god....
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.... in office, factory or other place of their work." It is clear from the above Explanation 2 to section 37(2A)/37(2) that the expenditure incurred on the hospitality of employees gets excluded from the definition of the entertainment expenditure provided the expenditure is incurred in office, factory or other place of their work. In the present case,it is an accepted position that the expenditure was incurred in the hotels.The assessee's contention is iotels fall within the meaning of "other place of their work". I am unable to agree with the interpretation given by the appellant. Explanation 1 and 2 to section 37(2A) it can be seen that the expenditure incurred by the employees forms part to definition of entertainment expenditure. Explanation 2 does not treat expenditure on food or beverages provided by the assessee to the employees in office, factory or other place of their work as entertainment expenditure.The expenditure was not incurred either in office or in factory. The expenditure incurred on entertainment at hotels attributable to employees cannot be brought under the expression "other place of their work". This expression has to be interpreted in the context in w....
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.... included in the business meetings and conferences expenditure. To sum up, the expenditure incurred on the business meetings and conferences at the hotels falls within the definition of entertainment expenditure. The additions made by the AO are sustained subject to submission and verification of evidence of rent paid." 28.We agree with the reasoning given by the CIT(A) in the light of the provisions of Explanation 2 to section 37(2A) of the Act. We have also considered the decisions relied upon by the learned counsel for the assessee.The decision of Hon'ble Calcutta High Court in the case of Chemcrown (I) Ltd. (supra) is distinguishable as follows:The employees and customers participated in the entertainment whereas in the case of the assessee the employees alone participated. 29.The decision in the case of Expo Machinery Ltd. (supra) by Hon'ble Delhi High Court is also distinguishable as follows: It was a case of employees participation while entertaining guests and the issue of place of work in the context of Explanation 2 to section 37(2A) was not considered by the Hon'ble Court. In the present case the employees alone participated in the entertainment and the....
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....een decided in favour of the assessee by the Tribunal for the earlier AY.s. i.e. 1987-88,1989-09 and 1990-91(supra).DR supported the order of the FAA. We find that issue before us, has been decided by the Tribunal, while adjudicating the appeals for AY.1987-88,1989-09 and 1990-91(supra) in the following manner: "13.3.We have heard the rival submissions and perused the material before us. We find that dealing with the issue of contribution to various institutions by the assessee ,the Tribunal has decided the matte; in the order for the AY.1985-86;as under: "40. Ground No. 14 of the assessee reads as follows: "The learned CIT(A) erred in disallowing contributions to institutions on the ground that such expenditure was not incurred for the purposes of the business, having failed to understand the scenario that establishes nexus between the contributions made and the business of the appellant." 41.The Assessing Officer disallowed contributions aggregating to Rs. 11,31,700 to the following institutions engaged in various activities in the med of sports, education and cultural promotions on the ground that the contribution were made for the purpose of ....
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.... course of business. He held that since the major beneficiaries of the expenditure were the company's employees, it was an item of labour welfare expenditure. 43.On appeal by the assessee, the CIT(A) confirmed the order of the Assessing Officer. We have heard the rival submissions. In A.Y.1968-69on an identical issue, the ITAT, Mumbal in I.T.A. No.2068/Bom/74-75 was pleased to hold that expenditure was for welfare of employees and was, therefore, allowable as deduction. It was the contention of the learned DR before us that in the earlier decisions of the Tribunal, the decision of the Hon'ble Bombay High Court in the case of Voltas Ltd. Vs. CIT, 207 ITR 47 (Bom) has not been considered. In the case of Voltas Ltd. (supra), the Hon'ble Bombay High Court has held that there was no nexus between expenses ...and business of the assessee.In the aforesaid decision the Hon'ble Court laid emphasis on business expediency in making a payment. On facts the Court found no business expediency in making the payment.In the case of the assessee we are of the view that the payments were made keeping in mind business expediency viz.,to have a motivated work force.In the light of the peculiar....
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....such trusts, funds, companies, association of persons, societies etc.,the Finance Act, 1984 had provided that no deduction would be allowed in the computation of taxable profits in respect of any sums paid by the assessee as an employer towards the setting up or formation of or a contribution to any fund, trust, company, association of persons, body of individuals or society or any other institution for any purpose except where such sum was paid or contributed to a recognised provident fund or an approved gratuity fund or approved superannua tion fund or for the purposes of and to the extent required by or under any other law,that the contributions were given to Tata Sports Club in the capacity of an employer for the benefit of the employees as well as others,that the annual contribution to Steel Plants Sports Board was an independent organisation managing the affairs of the board 'with its own budget, that the purpose of creation of the association was to create and train athletes of national standard,that the objective had no relevance in carrying on the business of the assessee,that the contribution made by the it was an application of income. Finally,he confirmed the disallowan....
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....ad given a general and vague explanation about the issue before him,that it did not establish the direct nexus between the contributions and the business,that in the absence of such a nexus, it could not be presumed that the contributions were made for the purpose of the business, that the contributions made by the assessee were on the nature of application of income,that the contributions were hit by the provisions of section 40A (9) of the Act.FAA upheld the order of the AO.s.Before us,AR argued that issue is covered in favour of the assessee-company by the orders of the earlier years-AY.s.1987-88,1989-09 and 1990-91(supra). "13.2.Before us,AR and DR took the same stand that they had taken for the earlier two grounds of appeal.We have decided grounds no.11-12 in favour of the assessee.Following the same ground no.13 is also allowed, as the facts of the ground are identical to earlier grounds." Following the above we decide the issue of payment of contributions to various Institutions at Jamshedpur in favour of the assessee for all the three AY.s. 9.Next common ground of appeal(G.12-1991-92,G.9-1994-95)is about Fees paid to Consultants for Feasibility Studies.AO.s foun....
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....of the assessee. In view of the above,G.14/G.13 for the AY.s under appeal are decided in favour of the assessee ." Following our orders for the earlier years, we decide the issue of payment of fees to the consultants for conductiong feasibility report in favour of the assessee. 10.Right share issue expense is the subject matter of the appeal for the AY.1994-95(G.13)and AY. 1995-96(G.10).AO.s had disallowed Rs. 3.76 Crores and Rs. 1.89 Crores respectively for the AYs. under appeal,incurred by the assessee under the head expenses for issuing right-shares. 10.1.Relying upon the matters of the Hon'ble supreme Court in the case of Brooke Bond India Ltd.(225ITR798)and Punjab State Industrial Development Corporation Ltd.(225ITR792),FAA held that the expenditure incurred by a company in connection with the issue of shares with a view to increase its share capital was directly related to the expansion of the capital base of the company and was a capital expenditure even though it might incidentally help in the business of the company and in the profit making,that the action of the AO was as per the provisions of law. 10.2.Before us,AR fairly conceded that that after the judgm....
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.... as to why it could not furnish the details before the AO.In these circumstances,if the FAA following the principles of natural justice,had directed the Assessing Officer to allow the claim after verification,no fault can be found with his order. Therefore,upholding his order,we dismiss the grounds,raised by the assessee,with regard to contributions to IMMW. Now we would take up the issue that are exclusive to one particular assessment year.First we will take up the grounds of appeals of AY.1991-92. 12.Ground 3 for that AY.deals with disallowance of Rs. 1.47 lakhd under Rule 6B of the Rules,for calendars and diaries.AR agreed that the disallowance confirmed by the FAA with regard to diaries and calendars was upheld by the Tribunal for earlier years. 12.1.We would like to reproduce the orders for the AY. AY.s.1987-88,1989-09 and 1990-91 (supra),wherein the issue has been dealt as under: "5.1.We find that the identical issue has been decided against the assessee by the Tribunal, while adjudicating upon the appeal for the last AY,as under: 5.2.Before us,Authorised Representative(AR)fairly conceded that the issue is decided against the assessee by the order p....
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....oever,would be entertainment expenditure,that the estimates of expenditure by the AO was very reasonable and same did not call for any interference. AR,submitted that in the earlier years the issue was partly allowed in favour of the assessee.We find that while deciding the appeal for the earlier assessment years,we have held that disallowance should be restricted to 25% of the total expenditure incurred.We have held as under : 7.2.Before us,it was submitted that,while deciding the identical issue,Tribunal had partly allowed the appeal filed by the assessee.We have heard the rival submissions and perused the material before us.We find that in the AY.1985-86,Tribunal had dealt the issue as under: '20.The AO estimated a sum of Rs. 1lakh as the probable expenditure out of entertainment expenditure quantified by the auditors in their report, incurred by the assessee on providing tea and coffee served to the visitors.The estimate made by the AO was confirmed by the CIT(A).According to the RevenueExplanation 2 to subsection (2A) of section 37 provides that every hospitality provided by an assessee for any person other than the employee even in office, factory or other p....
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....he issue was decided against the assessee by the order for the AY.s. 1987-88,1989-90 and 1990-91(supra).We find that Tribunal,while adjudicating the identical issue for the earlier AY.s. has held as under: "9.2.Before us,AR admitted that issue was covered against the assessee,by the order of the earlier year.We find that identical issue was considered by the Tribunal in paragraphs no.24,27 and 30 of the order for the AY.1985-86(supra).We have already mentioned that the Tribunal had dismissed the ground pertaining to entertainment,including the expenditure incurred in clubs for employeesemployers' meetings,therefore following the same ground no.9 is dismissed." Following the above,we decide the dismiss G.7/G.8 for the AY.1987-88,1989-90 and 1990-91 against the assessee. As we have already decided the issue against the assessee in the appeals for the earlier years,so,following the same we dismiss ground no.7 for the year 1991-92. 15.Last ground of appeal for the year is about Expenditure on Partly Convertible Debenture(G.8). During the assessment proceedings,AO had disallowed the claim of Rs. 27.51 lakhs made by the assessee in this regard.FAA upheld the order of th....
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....of the company, while in the case of India Cements Ltd. [1966] 60 ITR 52, the matter related to the borrowing of Rs. 40 lakhs from a financial institution, which loan was secured by a charge on the fixed assets of the company. The Hon'ble Supreme Court in this judgment considered various aspects of the matter including the previous English judgments and couple of judgments of the English courts based on the English Income Tax Act and proceeded to draw distinction between the income tax law in England and India.Not only this, the Hon'ble Supreme Court further proceeded to examine a number of cases decided by various High Courts like Kerala, Andhra Pradesh, Calcutta, Bombay, etc., and had gone to the extent of holding that some of the judgments were wrongly decided. Then, the Hon'ble Supreme Court proceeded to hold as under (page 63) : "10.To summarise this part of the case, we are of the opinion that : (a) the loan obtained is not an asset or advantage of an enduring nature ; (b) that the expenditure was made for securing the use of money for a certain period ; and (c) that it is irrelevant to consider the object with which the loan was obtained." Thus,....
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....s a loan and, therefore, whether it is convertible or non-convertible does not militate against the nature of the debenture, being loan and, therefore, the expenditure incurred would be admissible as revenue expenditure. Thus, we do not find any error in the finding of the learned Tribunal on this aspect also. Consequently, question No. 2 also as framed, is required to be and is answered against the Revenue and in favour of the assessee." Respectfully,following the order of the Hon'ble Rajasthan High Court,we decide G.10/9 for the AY.1989-90 and 1990-91 in favour of the assessee." We are deciding the ground no. 8 in favour of the assessee,following the judgment of the Hon'ble Rajasthan High Court(supra). Now we would take up the exclusive grounds of appeal raised by the assessee for the year 1994-95: 16.First of them is Foreign Travel Expenses(G.8).During the assessment proceedings,AO found that the assessee had claimed Rs. 3.50 lakhs under the head Foreign Travel Expenses,that out of the said amount Rs. 1.67 lakhs were incurred for foreign travel of the employees to Saudi Arabia,that the assessee had claimed that the employees were sent to Saudi Arabia for settin....
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....her contributions made by the assessee,that it was application of income,that it had not established direct nexus between the expenditure incurred and the business carried on by it. He upheld the order of the AO. 17.2.Before us, AR submitted that the mines were situated in remote areas inhabited by adivasis, that in order to earn their goodwill the assessee had dug the tube wells for maintaining a harmonious relationship and for smooth conduct of business, that the expression for the purposes of business was wider in scope than the words 'for the purposes of earning of profit', that the assessee was under legal and contractual obligation as per the memorandum of settlement(MOS)between the assessee and the Tata Workers' Union to incur expenditure on community development and Bustee improvement for improving the facilities such as roads, electricity, drinking water, sanitation etc..He referred to the decisions of the Tribunal delivered in the matters of group concerns where similar kind of expenditures were allowed. 17.3.We have heard the rival submissions and perused the material before us.We find that the expenditure on digging of tube wells was not claimed under the head pay....
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....that the Hon'ble Supreme Court has dealt the issue of fluctuation in the rate of foreign exchange in the matter of Woodward Governor India P. Ltd.(supra)as under: "Loss suffered by the assessee on account of fluctuation in the rate of foreign exchange as on the date of the balance-sheet is an item of expenditure under section 37(1) of the Income-tax Act, 1961.For valuing the closing stock at the end of a particular year, the value prevailing on the last date is relevant. This is because profit/loss is embedded in the closing stock. While anticipated loss is taken into account, anticipated profit in the shape of appreciated value of the closing stock is not brought into account, as no prudent trader would care to show increase in profits before actual realization. This is the theory underlying the rule that closing stock is to be valued at cost or market price whichever is lower.The expression "any expenditure" has been used in section 37 of the Income-tax Act, 1961, to cover both "expenses incurred" as well as an amount which is really a "loss" even though such amount has not gone out from the pocket of the assessee." Respectfully following the above judgment of t....
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....s own case and in absence of any contrary material brought to our notice, the order of the CIT(A)on this issue is upheld." Respectfully following the orders of the coordinating benches for AYs.1985-86 and 1992-93,we decided ground no.1 against the AO." Considering the above we decide the issue of provision for leave salary against the AO for all the three AYs." Following the orders for the earlier years, ground no.1 for all the three AY.s.is decided against the AO. 20.Ground no.2 for the AY.s. 1991-92,1994-95and 1995-96 deals with 20% of initial contribution to approved superannuation fund(ASF).During the assessment proceedings, AO.s found that the assessee had made contribution the ASF, that the contribution to the ASF included initial contribution for the AYs. concerned. According to the AO.s,20% of the initial contribution to the ASF was not admissible as deduction.As a result, they allowed remaining 80% of the initial contribution as deduction, in five equal instalments, by relying on the CBDT's notification dated 21. 10. 1965. 20.1.In the appellate proceedings, FAA held that the issue was covered by the judgment of the Sirpur Paper Mills(237 ITR41),that in vi....
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....view of the above discussion ground no.2 is decided against the AO. Following the order of the Tribunal for the AY.1986-87,we decide Ground no.2 of all the three AYs . against the AO." Considering the above Ground no.2 is decided against the AO for the AY.s.1991-92,1994-95 and 1995-96. 21.Last common ground for all the three AY.s, is about payment for holiday plan at hotels as guest house expenses of Rs. 1.50 lakhs,Rs.15.78 lakhs,Rs.1.50 lakhs. During the assessment proceedings AO.s found that the assessee had made payments towards Holiday plan at various hotels. AO.s observed that no fixed room or accommodation was reserved in a particular hotel for a period exceeding 182 days and no recovery was made from the employees, that the payments made to various hotels for holiday plan were covered by the provisions of section 37(4) of the Act. They made disallowances as stated earlier, for the AY.s under appeal. After considering the assessment order and the submissions of the assessee in this regard, FAA deleted the additions. 21.1.We find that the issue is covered against the AO by the order for the AY.s 1987-88, 1989-90 and 1990-91(supra).Tribunal has decided the issue, in th....