COMMISSIONER OF INCOME TAX Vs. VIDYUT METALLICS LTD

JUDGEMENT

(1.) This reference under Section 256(1) of the Income-tax Act, 1961, relates to the assessment year 1980-81, on the interpretation of Rule 6D(2)(b) of the Income-tax Rules, 1962.

(2.) The Income-tax Officer disallowed Rs. 21,693 as against Rs. 15,978 offered by the assessee on the ground that, under Rule 6D(2)(b), incidental conveyance expenses incurred (after reaching the destination) would be taken into consideration while making this disallowance. On appeal, the Commissioner of Income-tax (Appeals) deleted both the disallowances. On further appeal, the Tribunal held the deletion of the disallowance of Rs. 5,985 on account of travelling expenses on the ground that Rule 6D read with Section 37(3) seeks to limit the expenditure incurred on travelling to the extent of stay in hotels confining it to daily allowance referred to in Rule 6D and do not extend to any other expenditure incurred provided that expenditure was for the purpose of business.

(3.) On these facts, the following question of law has been referred to this court :