Law: Income Tax Act, 1961

Section: 6,6D

Income-tax--Business expenditure---Disallowance of expenditure---Travel expenses of employees---Miscellaneous expenses and local and other conveyance expenses of employees on tour for conducting assessees business---Not travel expenses within the meaning of R.6D---Are to be excluded from computation of disallowance under R.6D---Indian Income Tax Act, 1961--­Indian Income Tax Rules, 1962, R.6D. Miscellaneous expenses and local and other conveyance expenses which are incurred by the employees on tour for conducting the assessee's business cannot be considered as travelling expenses of the employee under rule 6D of the Income Tax Rules, 1962. Hence, these amounts are to be excluded while computing the disallowance under rule 6D. CIT v. Gannon Dunkerly & Co. (1993) 114 CTR 56 (Bom.) fol. JUDGMENT MRS. RANJANA DESAI, J.---By this reference under section 256(1) of the Income "flax Act, 1961, the Income-tax Appellate Tribunal has referred the following question of law to this Court for opinion: "Whether, on the facts and in the circumstances of the case, and in law the Tribunal was right in directing the Income-tax Officer to exclude the miscellaneous expenses and local and other conveyance expenses from the computation of the disallowance under rule 6D of the Income-tax Rules?" The facts relevant for the purposes of this reference are as under: The controversy in this case pertains to the assessment years 1980-81 and 1981-82. The assessee-firm is engaged in the business as commission agents and brokers for chemicals and dyes. In its assessment for the assessment years 1980-81 and 1981-82, the assessee claimed deduction on account of miscellaneous expenses and local and other conveyance expenses from the computation of disallowance under rule 6D of the Income-tax Rules, 1962 ("the rules"). The Income-tax Officer disallowed the same and included the local conveyance expenses and miscellaneous expenses incurred by the…

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