The division bench of Allahabad High Court disallowed the expenses incurred in respect of the guest house is after the cut of date i.e. 28-02-1970 and as such no allowance is available under Section 37 (4) of the Income Tax Act, 1961.
While disposing the appeal, the division bench comprising of Justice Pankaj Mithal and Justice Umesh Chandra Tripathi observed that, “the provision Section 37(4) of the Income Tax Act is clear enough and leaves no scope of any ambiguity. It clearly lays down that no allowance is permissible in respect of any expenditure incurred in respect of any accommodation in the nature of guest house after 28.02.1970”.
“The Tribunal has not considered the effect of subsection (4) of Section 37 while confirming the allowance of the guest house expenditure”, the bench also said.
Read the full text of the Order below.
