BRITANNIA INDUSTRIES LTD. vs. COMMNR. OF INCOME TAX

C.A. No.-002415-002415 - 2004Supreme Court05 October 20059 pages
For Petitioner: RAKHI RAYFor Respondent: B. V. BALARAM DAS
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court held that the specific provisions in Section 37(4) of the Income Tax Act, 1961, clearly excluded expenses related to guest houses, even if they were otherwise deductible under Sections 30-36. The intention of the legislature was to disallow such expenses.

What were the facts?

The assessee claimed expenses for rent, repairs, depreciation, and maintenance of a guest house used for business purposes. The revenue disallowed these expenses.

What were the issues?

Whether expenses incurred on a guest house used for business purposes are deductible under the Income Tax Act, 1961, considering the specific provisions of Section 37(4).

Which sections of the Income-tax Act were involved?

Section 37,Section 30,Section 31,Section 32,Section 37(4),Section 37(5)

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Cause title — parties, addresses and appearances
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 9 CASE NO.: Appeal (civil) 2415 of 2004 PETITIONER: Britannia industries Ltd. RESPONDENT: Commissioner of Income Tax,West Bengal, Kolkata & Anr. DATE OF JUDGMENT: 05/10/2005 BENCH: B.P. Singh,Tarun Chatterjee & Altamas Kabir

JUDGMENT: JUDGMENT ALTAMAS KABIR, J

The question which has been raised in this Civil Appeal appears to have been considered by different High Courts which have expressed divergent views in the matter. The said question has come up before this Court for consideration to resolve the anomalous situation. The dispute in the instant case is with regard to disallowance of a sum of Rs.31,38,017/- for the Assessment Year 1994-1995, which sum was claimed by the assessee as expenses towards rent, repairs, depreciation and maintenance of a guest house which was purportedly used in connection with the business of the company. Chapter IV of the Income Tax Act, 1961 (hereinafter referred to as ’the Act’), deals with computation of total income and is divided into several parts. Part ’D’, beginning with Section 28, deals with profits and gai

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