Commissioner Of Income Tax v. Saurashtra Cement And Chemicalindustries

O/TAXAP/1446/2005 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1446 of 2005With TAX APPEAL NO. 1447 of 2005 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERIandHONOURABLE MR.JUSTICE K.J.THAKER ==================================== 1Whether Reporters of Local Papers may be allowed to see the judgment?2To be referred to the Reporter or not?3Whether their Lordships wish to see the fair copy of the judgment?4Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder?5Whether it is to be circulated to the civil judge? ==================================== COMMISSIONER OF INCOME TAX.....Appellant(s) Versus SAURASHTRA CEMENT AND CHEMICALINDUSTRIES LTD.....Opponent(s) ==================================== Appearance: MR PRANAV G DESAI, ADVOCATE for the Appellant(s) No. 1MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1==================================== 1. 2. CORAM: HONOURABLE MR.JUSTICE KS JHAVERIandHONOURABLE MR.JUSTICE K.J.THAKER Date : 17/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) By way of these appeals, the department has challenged the judgments and order of the Tribunal, whereby, the Tribunal has allowed the appeal preferred by the assessee. While admitting the matters, this Court has framed following substantial question of law: “Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in deleting the disallowance made on account of guest house expenditure u/s. 37(4) of the Income Tax Act, 1961?” Mr. Desai, learned advocate appearing for the appellant, submitted that the question of law involved in these appeals, is now governed by the decision of the Hon’ble the Apex Court in Britannia Industries Ltd. Vs. Commissioner of Income-Tax and Another, reported in [2005] 278 ITR 546 (SC), whereby, the Hon’ble the Apex Court has held that the guest house expenditure is not allowed in expenditure and has held as under: “While the expression “premises and buildings” in sections 30 and 32 of the Income Tax Act, 1961, and the expression “residential accommodation including any accommodation in the nature of guest house” in sub-sections (3), (4) and (5) of section 37 can be similarly interpreted, a distinction has been sought to be introduced for the purpose of section 37 by specifying the nature of the building to be a guest house. 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. When the language of a statute is clear and unambiguous, the courts are to interpret the same in its literal sense and not to give a meaning which would cause violence to the provisions of the statute.” 3.There is no dispute amongst both the learned counsel that the 4. hiren aforesaid decision will apply in the facts of this case, as the facts are identical and therefore, we are not giving elaborate reasons. When the language of a statute is clear and unambiguous, the courts are to interpret the same in its literal sense and not to give a meaning which would cause violence to the provisions of the statute.” 3.There is no dispute amongst both the learned counsel that the 4. hiren aforesaid decision will apply in the facts of this case, as the facts are identical and therefore, we are not giving elaborate reasons. Accordingly, the question, “Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in deleting the disallowance made on account of guest house expenditure u/s. 37(4) of the Income Tax Act, 1961?” is answered in favour of the department and against the assessee. The appeals stand allowed accordingly. [ K. S. Jhaveri, J. ] [ K. J. Thaker, J. ]