C.I.T Vs. ARVIND MILLS LTD.

JUDGEMENT

(1.) THE following two questions have been referred by the Income Tax Appellate Tribunal, Ahmedabad under Section 256(1) of the Income Tax Act, 1961 arising out of the Tribunal's order dated 30.07.1997 in ITA No. 3687/1992:

(2.) THE assessee had filed appeal before CIT(A) against the order of DCIT(Asstt.) Spl., Ahmedabad under section 143(3) of the Act for the assessment years 1988 -89 as the assessing office disallowed all the expenses on guest house including depreciation. CIT(A) allowed the claim of depreciation of Rs. 109180 and the disallowance of rent expenses was confirmed. The CIT(A) also held that since octroi was paid to Ahmedabad Municipal Corporation it was not hit by provisions of section 40A(3). The revenue appealed before the Tribunal. The Tribunal upheld both the findings of the CIT(A).

(3.) MR . Manish Shah, learned advocate appearing for Mr. J.P. Shah submitted that the Tribunal as well as the first appellate authority was justified in not allowing the disallowance made by the Assessing Officer so far as octroi is concerned. He submitted that the Tribunal has rightly upheld the order passed by CIT(A) so far as both the questions are concerned.