- (1.) Under Section 256(2) of the Income-tax Act, 1961, the Tribunal has submitted the following question ; "Whether, on the facts and in the circumstances of the case, was the expenditure incurred by the assessee on the foreign tour of two of its directors an allowable deduction either in whole or in part ?"
(2.) The assessee is a limited company running a five star hotel known as Hotel Clark Shiraz at Agra. For the assessment year 1972-73, the assessee claimed deduction of Rs. 40,295 on account of foreign travel of its two directors and other incidental expenses. The Income-tax Officer disallowed 2/3rds of the said amount while allowing deduction of l/3rd thereof. This was for the reason that the agreement between the assessee and the Ramada Inns provide that the technical collaboration related to the operation of the existing hotel and construction of future hotels. The Income-tax Officer found that the petitioner was setting up two new hotels at Lucknow and some other place.
(3.) On appeal, the Appellate Assistant Commissioner agreed with the Income-tax Officer and dismissed the appeal. The further appeal to the Tribunal was also of no avail. Thereupon, the present reference was obtained by the assessee.;