(1.) IN accordance with the directions issued by this court in C.P. No. 200 of 1974 under section 256(2) of the INcome-tax Act, 1961 (hereinafter referred to as "the Act"), the following question of law has been referred for the opinion of this court by the INcome-tax Appellate Tribunal, Bangalore.
(2.) THE assessee in this case is a limited company. In returns filed for the assessment year 1969-70, the assessee claimed exemption towards guest house expenditure amounting to Rs. 13,902 consisting of the following items : <FRM>JUDGEMENT_154_ITR121_1980Html1.htm</FRM>
(3.) THE combined effect of the two sub-sections is that any expenditure incurred by an assessee towards maintaining of any residential accommodation or including any accommodation in the nature of a guest house, though incurred wholly and exclusively for his business, allowance is permitted only to the extent, and subject to such conditions, if any, as may be prescribed.