Law:

Section:

Section 37(1) of the Income-tax Act, 1961 [Corresponding to section 10(2)(xv) of the Indian Income-tax Act, 1922] - Business expenditure - Allowability of - Assessee-trust owning some hotels gave increment of Rs. 800 per month in salaries of their hotel managers and claimed exemption in respect of that under section 10(2)(xv) of 1922 Act - Income-tax Authorities refused to allow increment of more than Rs. 400 per month on ground that same was not justifiable - Tribunal upheld order of revenue authorities - Whether claim of assessee being a claim for exemption of an amount under section 10(2)(xv) of 1922 Act, burden of proving necessary facts in that connection was on assessee - Held, yes - Whether since assessee failed to discharge that burden, order passed by authorities below was to be affirmed - Held, yes FACTS The assessee was a trust which owned five hotels. The assessee gave increment of Rs. 800 per month in the salaries of their hotel managers. The income tax authorities refused to allow increment of more than Rs. 400 per month on ground that same was not justifiable. On further appeal, the Tribunal held that the increment of Rs. 800 per month was not at all justified by business considerations and the Income-tax authorities were perfectly justified in cutting down the increase of Rs. 800 per month to half and allowing only an increase of Rs. 400 per month in their case. The Tribunal based its finding on the ground-- (1)that no particular reason was given for the increase by the assessee; (2)that managers were not called upon to render any service in addition to what they had been rendering in the past; (3)that the reason for the increase given before the AAC was not correct; and (4)that no demand was made by the managers for increase in the salaries. On reference: HELD The claim of the assessee being a claim for exemption of an amount under section 10(2)(xv) of the 1922 Act, the burden of proving the necessary facts in that connection was on the assessee. That burden had not been discharged by the assessee in the instant case. Further, the finding of the Tribunal was supported by material on the record which could not be interfered with. Consequently,…

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