TaxTMI 
TaxTMI 
2005 (9) TMI 30
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....e under section 37(3A) of the Income-tax Act?" The assessment year is 1984-85, and the relevant accounting period is April 1, 1983 to March 31, 1984. During the relevant previous year, the assessee had incurred motor car expenses amounting to Rs. 2,84,030, which included repairs and insurance expenses. The Assessing Officer took into consideration the entire motor car expenses for the purpose of calculating disallowance under section 37(3A) of the Act. The assessee's contention that the expenses towards motor car repairs and insurance should not be considered for ascertaining the disallowance under section 37(3A) of the Act, was negatived by the Assessing Officer while framing the assessment under section 143(3) of the Act vide order dated....
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....l expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head 'Profits and gains of business or profession'." Section 37(3A) of the Act reads as under: "37.(3A) Notwithstanding anything contained in sub-section (1), where the expenditure or, as the case may be, the aggregate expenditure incurred by an assessee on anyone or more of the items specified in sub-section (3B) exceeds one hundred thousand rupees, twenty per cent, of such excess shall not be allowed as deduction in computing the income chargeable under the head 'Profits and gains of business or profession'." A plain reading of secti....
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....uestion as to whether the expenditure incurred for residential accommodation in the nature of a guest house, would be hit by section 37(4) of the Act, it was held thus: "The opening non obstante clause of sub-section (4) of section 37 makes it clear that the expenditure which is referred to in clause (i) of sub-section (4) is one which would be allowable as deduction under section 37(1). In order to attract the provisions of sub-section (4), it must first be established that it is an expenditure which is covered by section 37(1). Section 37(1) refers to expenditure (i) which is not an expenditure of the nature described in sections 30 to 36; (ii) which is not an expenditure of capital nature; and (iii) which is not personal expenditure of ....