BRITANNIA INDUSTRIES LTD. versus COMMISSIONER OF INCOME TAX, WEST BENGAL, KOLKATA AND ANR.

Citation: [2005] SUPP. 4 S.C.R. 1 · Decided: 05-10-2005 · Supreme Court of India · Bench: B.P. SINGH · Disposal: Dismissed

Judgment (excerpt)

t 
BRITANNIA INDUSTRIES LTD. 
v. 
COMMISSIONER OF INCOME TAX, WEST BENGAL, KOLKATA 
AND ANR. 
OCTOBER 5, 2005 
(B.P. SINGH, TARUN CHATTERJEE AND AL TAMAS KABIR, JJ.] 
A 
B 
Income Tax Act, 1961-Sections 30-36, Section 37-Benefit of allowing 
expenditure incurred in respect of buildings and furniture used for business C 
of profession of assessee-Held, does not extend to expenditure incurred in 
respect of guest houses. 
The appellant sought for benefit of exemption of expenditure 
incurred in respect of guest houses which was not allowed by the 
authorities. The claim was rejected by High Court based on other D 
judgments by same High Court. On appeal, appellant contended that 
Sections 30 to 32 deal with specific types of expenditure which are 
allowable in terms of the said provisions, whereas Section 37 deals with 
all other expenditure, not being expenditure described in Sections 30 to 
36 of the Act, subject to the conditions; that Section 37 contains general 
provisions allowing deductions in respect of expenditure not included E 
within Sections 30 to 36 of the Act; that since expenditure incurred by 
the assessee towards payment of rent, rates, taxes, repairs and insurance 
of premises, buildings and furniture used for the purposes of the business 
or profession has been provided for specifically under sections 30, 31 and 
32 of the Act, by virtue of the non-obstante clause used in Sub-section (1) p 
of Section 37 such expenses could not again be referable to Section 37 and 
the different provisions thereof; that in other words, since the aforesaid 
expenses had been specifically allowed to be deducted the said benefit could 
not be taken away by the word "including" in the expression "residential 
accommodation including any accommodation in the nature of a guest 
house" in Sub-section (3) of the said Act; that having allowed a partial G 
benefit, it could not have been the intention of the Legislature to take away 
the entire benefit by incorporating Sub-section (4) with effect from lst 
April, 1970; that such a view would be borne out from the fact that the 
provisions relating to the restrictions imposed with regard to expenses 
H 
2 
SUPREME COURT REPORTS [2005) SUPP. 4 S.C.R. 
A incurred towards the maintenance and other expenditure of guest houses 
run by companies, were sought to be omitted with effect from 1st April, 
1998; Section 37(4) of the Act is a non-obstante clause in relation to Sub-
section (I) and Sub-section (3) of Section 37 and if any expenditure or 
allowance was made allowable in other sections of the Act, the same could 
B not be withdrawn or denied to the assessee because of the prohibitory 
provisions of Section 37(4); that the uniform decision of most of the High 
Courts appears to be that since the expenditure incurred for rents, rates, 
taxes, repairs and insurance of buildings and premises and furniture used 
for the purposes of business or profession, have been specifically provided 
for in Sections 30, 31and32 of the Act, benefits thereof could not be denied 
C to the assessee under the relevant provisions of Section 37 of the Act; and 
that the judgment under appeal did not give any independent reasoning 
but was rendered following the decision of the Calcutta High Court and 
could not therefore be sustained. 
Respondent contended that the provisions of Section 37 would have 
D to be read in isolation from the provisions of Sections 30 to 36 of th•~· Act 
as contemplated by the non-obstante clause in Section 37(1); that the 
provisions of Section 37 had been correctly interpreted in the two decisions 
of the Calcutta High Court; that it was the clear intention of the 
Legislature to exclude the benefit of deduction in respect of guest houses 
E which were being run and maintained by companies in a lavish manner; 
that while premises and buildings had been referred to in general terms 
in Sections 30, 31 and 32 of the Act, guest houses had been separately 
categorized for the purposes of Section 37 which would be quite evident 
from the manner in which expenses, including rent and maintenance, were 
sought to be withdrawn in respect of such guest houses; that the intention 
F of the Legislature would be further clear from the insertion of Sub-section 
(5) which brought within the scope and ambit of Section 37(4) all 
accommodation by whatever name called in the nature of a guest house. 
Dismissing the Appeal, the Court 
G 
HELD : 1. The intention of the Legislature appears to

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