In View Of The Decision Of Britannia Industriesltd v. Commissioner Of Income Tax And Another

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR. D.B. Income Tax Reference No.2/1996 M/s Saraf Textile Mills Pvt. Ltd.Vs.CIT DATE OF ORDER ::: 14.9.2016 HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE BANWARI LAL SHARMA Mr. C.M. Sharma, for the petitioner.Mr. Anuroop Singhi, for the respondent. ***** 1.This reference has been sent to this court for answering the following question which reads as under:- “Whether the learned Tribunal was right inlaw in holding that rent of Rs. 5850/- inrespect of Guest House would not beallowable under section 30 of the IncomeTax Act, 1961, but would be disallowableunder sub-section (4) read with sub-section(5) of Section 37 of the Act?” 2.The facts of the case are that the assessee is aprivate limited company engaged in the business of makinggarments and selling them in Indian as well as foreignmarkets. It maintains its accounts on mercantile system andadopts Diwali ending as its previous year. The previous yearfor A.Y. 1983-84 ended with Diwali Samvat 1982 and thatfor A.Y. 84-85 with Diwali Samvat 1983 (4.11.83). 2.1The assessee had claimed a sum of Rs. 5850/- onaccount of rent paid to Shri K.M-Gupta for 13 months @ Rs. 450/- per month in respect of a guest house. The Income-tax authorities rejected assessee's said claim on the groundthat the expenditure in question was incurred in respect of aGuest House at Bombay and such expenditure was notallowable under Section 37(4) read with Section 37(5) of the Act. 3.In view of the decision of Britannia IndustriesLtd. vs. Commissioner of Income Tax and another reported in (2005) 278 ITR 546 (SC), the issue is requiredto be answered in favour of the department.4.Therefore, the same is answered in favour of thedepartment against the assessee. (Banwari Lal Sharma), J. (K.S. Jhaveri), J. Brijesh85.