S. Bandyopadhyay, J. - (1.) THE first ground in this appeal filed by the assessee relates to the disallowance of an amount of Rs. 10,041 being of the nature of local conveyance expenses, but considered under section 37 of the Act as guest house expenditure.
(2.) THE assessing officer discusses in this connection that the total expenditure on guest house maintenance was Rs. 24,96,062. Besides maintenance, depreciation, repairs, etc. this aggregate amount includes also the local conveyance of Rs. 10,041. The Commissioner (Appeals) has disallowed the appellate ground in this regard by simply commenting that local conveyance was in respect of staff of the guest house and hence is required to be disallowed. The assessee agitates against the above disallowance.
(3.) THE learned counsel for the assessee strongly contends that the local conveyance expenses cannot be considered to be expenses incurred for or in connection with the maintenance of the guest house. We are, however, not in agreement with the contention on behalf of the assessee. The learned counsel for the assessee had admitted before us that the local conveyance expenses under consideration related to the staff located at the guest house and hence the expense should be considered to be closely connected with the maintenance of the guest house inasmuch as the local conveyance should be treated as having been incurred for the purpose of fetching things and articles required for maintenance of the guest house. The assessee itself seems to have included the local conveyance expenses within the guest house expense and also came up with the break -up of the guest house expenses in that manner (by including the local conveyance expenses) before the assessing officer, Otherwise, the assessing officer would not have got any separate idea about the local conveyance expenses incurred by the staff of the guest house. In essence, therefore, the assessee admits that the local conveyance expenses were a part and parcel of the expenses incurred by it for maintenance of the guest house. As such, we agree with the departmental contention that the local conveyance expenses are intimately connected with the maintenance of the guest house and were also incurred for that very purpose alone. We, therefore, uphold the action of the lower authorities in disallowing the amount under consideration.;