- (1.) THE following three questions have been referred in this case: 1. Whether on the facts and in the circumstances of the case, Tribunal v/as in law, justified in holding that payments were not hit by the provisions of Section 43B of I.T. Act, 1961 and deleting the addition of Rs. 81,151/ -and Rs. 10,320/ - Under Section 43B.
(2.) WHETHER on the facts and in the circumstances of the case Tribunal was, in law, justified in holding that jeep cannot be equated with motor car and the expenses on it would not be liable for disallowance under Section 37(3A) of I.T. Act, 1961. Whether on the facts and in the circumstances of the case the Tribunal was, in law, justified in holding that the expenditure on repair of motor car should not be included for the purposes of Section 37(3A) of I.T. Act, 1961? 2. The first question is covered in favour of the assessee and against the department by the decision of the Supreme Court in the case of Allied Motors Ltd. v. C.I.T. : [1997]224ITR677(SC) , accordingly the first question is answered in favour of the assessee and against the department. 3. The second question relates to Section 37(3A) of the Income Tax Act, which has now been deleted. The bare reading of Sub -section (3 A) and (3 B) of Section 37 indicates that it was meant to check extravagant expenditure by the assessees on certain items mentioned therein, namely advertisement, publicity, sales promotion, payment to hotels, running and maintenance of air crafts and motor cars including hiring of air crafts and motor cars. It has been held by this Court in the case of C.I.T., v. Jagran Prakashan I.T.R. No. 93 of 1994 decided on 2.5.2007 that the expression motor cars used in Section 37(3B) means passenger cars and may not include goods vehicles.
(3.) A 'jeep' is not a goods vehicle but a passenger car. No good reason has been given by the Tribunal for excluding the vehicle 'jeep' from the expression 'motor cars' used in the statutory provision under consideration. The Tribunal has merely followed another earlier decision of the Tribunal. In absence of any reason given by the Tribunal and also in absence of any good reason given to us by the learned Counsel for the assessee for excluding 'jeep' from the expression 'motor cars' as used in Section 37(3B), we hold that the Tribunal was not justified in law in holding that the 'jeep' cannot be equated with 'motor cars' for the purposes of Section 37(3 -A). The question No. 2 is answered as accordingly.;