- (1.) WE have heard Sri Dhananjay Awasthi for the appellant -Department. Shri Bhoopesh Jain and Sri R.S. Agrawal appears for the respondent -assessee. This income -tax appeal under section 260A of the Income -tax Act, 1961, ("the Act") is directed against the judgment and order of the Income -tax Appellate Tribunal (Delhi Bench "E", New Delhi), dated April 8, 2005, in I.T.A. Nos. 5323/Del/97 and 5195/Del/97 for the assessment year 1993 -94.
(2.) THE appeal was admitted on questions Nos. 1, 2, 3, 5 and 6, made in the memo of appeal as questions of law for consideration, which are as follows: WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the expenses and depreciation on guest house were allowable and the provisions of section 37(4) of the Act, were not attracted ? Whether, on the facts and in the circumstances of the case, the Tribunal was right in law holding that deduction under section 80I was allowable on gross total income without reducing the deduction under section 80HH of the Act ? WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the effect of entries passed in subsequent years can be given in preceding year although such deduction has not been claimed in the return of income ? (5) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in treating the interest income as business income instead of income from other sources ? (6) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in treating various capital expenses as revenue expenses ?
(3.) On question No. 1, the parties agree that it is covered by the judgment of the Supreme Court in Britannia Industries Ltd. v. CIT : [2005] 278 ITR 546 (SC), in which it was held that maintenance expenses not allowable in respect of guest house. In the said case, the Supreme Court observed in paragraph 30 as follows (page 558): The only question which we are called upon to consider in the instant case is whether the expression 'premises and buildings' referred to in sections 30 and 32 and used for the purposes of the business or profession would include within its scope and ambit the expression 'residential accommodation including any accommodation in the nature of guest house' used in sub -sections (3), (4) and (5) of section 37 of the Act. While the two expressions can be similarly interpreted, a distinction has been sought to be introduced for the purposes of section 37 by specifying the nature of building to be a guest house. In our view, the intention of the Legislature appears to be clear and unambiguous and was intended to exclude the expenses towards rents, repairs and also maintenance of premises/accommodation used for the purposes of a guest house of the nature indicated in sub -section (4) of section 37. When the language of a statue is clear and unambiguous, the courts are to interpret the same in its literal sense and not to give it a meaning which would cause violence to the provisions of the statute. If the Legislature had intended that deduction would be allowable in respect of all types of buildings/accommodations used for the purposes of business or profession, then it 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 sub -section (5) of section 37 and the provisions of sections 31 and 32 would have been sufficient for the said purpose. Question No. 1 is thus decided in favour of the Revenue and against the assessee.;