Purolator India Ltd. vs Commissioner of Income Tax

In this reference u/s 256(1) of the Income Tax Act, 1961, the following question of law has been referred for our opinion:

Whether, on the facts and circumstances of the case, and in law the Tribunal erred in taking the view that the portion of expenditure relating to employee participation in providing food, drinks etc., to customers in a hotel or restaurant in the course of business, was not covered with the exception provided in Explanation 2 to Section 37(2A) of the Income Tax Act?

Whether on the facts and circumstances of the case, the Tribunal was correct in law in holding that expenditure on rent of staff transit houses or on the repairs thereof was disallowable under Sections 37(4) and 37(5) of the Income Tax Act, while the same were specifically allowable under Sections 30 to 36 of the Act?

It is common ground that insofar as question No. 1 is concerned, it is required to be answered in the negative, in favor of the revenue and against the assessed in view of the decision of the Supreme Court in CIT v. Patel Bros. & Co. Ltd. : [1995]215ITR165(SC) .

Insofar as Question No. 2 is concerned, it is common ground that in view of the decision of the Supreme Court in Britannia Industries Ltd. Vs. Commissioner of Income Tax, West Bengal, Kolkata and Another, , it is required to be answered in the affirmative, in favor of the revenue and against the assessed.

The reference is disposed of accordingly.