Law:

Section:

Section 37(1), of the Income-tax Act, 1961, read with rule 6D of the Income-tax Rules, 1962 - Business-expenditure - Allowability of - Assessment year 1981-82 - Whether disallowance of traveling expenses under provisions of rule 6D should be worked out by taking into consideration trip-wise expenses rather than year wise details of such traveling expenses - Held, yes Section 32A of the Income-tax Act, 1961 - Investment allowance - Assessment year 1981-82 - Whether assessee engaged in manufacturing road making machinery, quarry equipment, material handling equipment and turnkey plants would be entitled to investment allowance on computers - Held, yes FACTS The assessee-company was manufacturing road making machinery, quarry equipment, material handling equipment and turnkey plants. During the course of the assessment proceeding, the Assessing Officer calculated the disallowance out of traveling expenses under rule 6 of the Income-tax Rules, considering trip-wise expenses of a person during the accounting year. The Assessing Officer further disallowed the assessee's claim of investment allowance on computers. On appeal, the Commissioner (Appeals) held that disallowance out of traveling expenses under the provisions of rule 6D should be made considering all the tours together made by a person during the previous year. The Commissioner (Appeals) also held that assessee was entitled to investment allowance on computers. The Tribunal confirmed the order made by the Commissioner (Appeals). On reference : HELD As far as question regarding disallowance out of traveling expenses was concerned, following the decision of the High Court in CIT v.Nutan Mills Ltd. [2002] 254 ITR 519, it was to be held that the Tribunal was not right in holding that the disallowance out of traveling expenses under the provisions of rule 6D of the Income-tax Rules, should be worked out by taking into consideration the year-wise details of such traveling expenses rather than trip-wise expenses. So far as the question regarding investment allowance was concerned, since the industrial undertaking is not entitled to investment allowance if it is manufacturing or producing articles or goods listed…

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