TaxTMI 
TaxTMI 
2006 (9) TMI 88
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....ction 37(4) for rent paid by the assessee for guest house? (2) Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal erred in directing the Assessing Officer to exclude liabilities on pro rata basis in respect of Tractor Division and Foundry Unit for computing capital employed in the New Unit?" 2. The assessee claimed a sum of Rs.7200/- on account of rent paid to PSIDC for their guest house. The Assessing Officer disallowed the said amount under Section 37(4) of the Income Tax Act, 1961 (for short, 'the Act'). The Commissioner of Income-tax (Appeals) accepted the assessee's contention, which view has been upheld by the Tribunal. 3. The assessee claimed relief under section 80J of the Act for the tra....
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....ad intended that deduction would be allowable in respect of all types of buildings/accommodations used for the purposes of business or profession, then it would not have felt the need to amend the provisions of section 37 so as to make a definite distinction with regard to buildings used as guest houses as defined in sub section (5) of section 37 and the provisions of sections 31 and 32 would have been sufficient for the said purpose. The decisions cited by Dr. Pal contemplate situations where specific provision had been made in sections 30 to 36 of the Act and it was felt that what had been specifically provided therein could not be excluded under section 37. The clarification introduced by way of sub-section (5) to section 37 was also not....
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....mount so ascertained under sub-rule (2) shall be deducted the aggregate of the amounts as on the first day of the computation period of borrowed moneys and debts due by the assessee. At first look sub-rules (2) and (3) appear to provide that from the aggregate value of the assets of each undertaking the aggregate of the liabilities of the assessee shall be deducted. The assessee in this case owns 4 industrial undertakings. The result of such interpretation would be that from the assets of each industrial undertaking the entire borrowings of the assessee in respect of all the industrial undertakings are to be deducted for arriving at the capital employed in an industrial undertaking. On the face of it, this is an absurd proposition. If you w....
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.... relied upon by the learned counsel for the assessee, which is as under:- "Section 80J of the Income Tax Act, 1961, provides that in computing the taxable income of an assessee from a newly established industrial undertaking ship or business of a hotel, a deduction shall be allowed at the rate of 6 per cent (with effect from April 1, 1976 at the rate of 7.5 per cent in the case of a company) of the capital employed in the industrial undertaking, ship or business of the hotel. Rule 19A of the Income Tax Rules, 1962, prescribed the manner of computation of the capital employed for this purpose. Sub-rule (2) of rule 19A provided that the aggregate of the amounts representing the value of the assets of the undertaking shall first be ascertaine....