1990 (11) TMI 62

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....ever, the Tribunal, after considering the facts of the case, referred the second question which is as follows : "Whether the Tribunal was correct in holding that the expenses incurred by an assessee on account of its employees attending to its business from outside its headquarters for the days on which the employees did not actually travel would also come under the purview of section 37(3) of the Act read with rule 6D of the Income-tax Rules ?" The facts leading to the appeal and the reference may be stated briefly and they are as follows : The assessee is a manufacturing company carrying on its activities in Bangalore. For the assessment year 1977-78, in its return, it claimed under rule 6D of the Income-tax Rules read with secti....

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....he assessment years 1975-76, 1976-77 and 1977-78 were preferred. By a composite order, the Tribunal declined to entertain the contention of the assessee to the effect that the directors or employees who travelled outside the headquarters in connection with the work of the company were entitled to full cost of their stay in hotel or guest house notwithstanding the prescription under rule 6D on days when they did not do any work in connection with the travel undertaken such as holidays, etc., and as such they were entitled to the full cost paid in respect of their stay. The assessee before the Tribunal relied upon a decision of the Delhi Bench of the Tribunal which had entertained a similar contention and allowed the claim having regard to....