IN THE HIGH COURT OF KERALA AT ERNAKULAM
ITA No. 37 of 2004()
1. MIL CONTROLS LTD., ALUVA.
... Petitioner
Vs
1. COMMISSIONER OF INCOME TAX, COCHIN.
... Respondent
For Petitioner :SRI.E.K.NANDAKUMAR
For Respondent :SRI.GEORGE K. GEORGE, SC FOR IT
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice K.M.JOSEPH
Dated :14/11/2007
O R D E R
H.L.DATTU, C.J. & K.M.JOSEPH, J.
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I.T.A.No.37 of 2004 &
C.M.Appln.No.1145 of 2004
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Dated, this the 14th day of November, 2007
JUDGMENT
H.L.Dattu, C.J.
Delay in filing the appeal is condoned.
(2) By consent of the learned counsel appearing for the parties, the
appeal is taken up for final hearing.
(3) Appellant is a company incorporated under the provisions of the
Companies Act. It is involved in the manufacture of valve, body, bonnet, its
accessories, etc. For the assessment year 1994-95, the assessee had
claimed deductions of the amounts paid towards rent for the guest house.
The assessing authority had disallowed the claim so made. Aggrieved by the
said order, the assessee had carried the matter in appeal before the first
appellate authority, who by its order dated 24.2.2000 has partly allowed the
claim made by the assessee. Not being satisfied with the said order, the
assessee had carried the matter by way of second appeal before the Income
Tax Appellate Tribunal, Cochin Bench, Cochin in I.T.A.No.87 of 1998. The
Tribunal has dismissed the assessee’s appeal.
(4) Aggrieved by the orders so passed by the Tribunal, the assessee is
before us in this appeal filed under Section 260A of the Income Tax Act, 1961.
The assessee has framed only one question of law for our consideration and
decision. The same is as under:
“Whether on the facts and in the circumstances of the
case, was the Income Tax Appellate Tribunal justified in
confirming the disallowance of rent paid for guesthouse?
ITA No.37/2004
2
(5) The issue so framed by the assessee is no more debatable in view
of the law laid down by the apex Court in the case of Britannia Industries Ltd. v.
Commissioner of Income-Tax and another [(2005) 278 ITR 546]. In the said
decision the Supreme Court has stated as under:
“The intention of the Legislature is clear and
unambiguous: the intention was to exclude from deduction the
expenses towards rents, repairs and also maintenance of
premises/accommodation used for the purpose of a guest house
of the nature indicated in sub-section (4) of section 37. If the
Legislature had intended that deduction would be allowable in
respect of all types of buildings/accommodation used for the
purpose of the business or profession, then the Legislature
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 section 37(5) and the
provisions of sections 31 and 32 would have been sufficient for
that purpose.”
(6) In view of the law declared by the apex Court, the question of law
framed by the assessee requires to be answered against the assessee and in
favour of the Revenue.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(K.M.JOSEPH)
JUDGE
vns