Britannia Industries Ltd v CIT (SC) (October 5, 2005) - Guest-House Expenses Disallowable under Section 37(4) - Not Allowable under Sections 30 to 36

In a judgment delivered on October 5, 2005 in the case of Britannia Industries Ltd v CIT, the Supreme Court of India has given a quietus to the following long-standing controversy in Indian Business Taxation, viz. :

Whether expenditure by way of rent and repairs incurred on the maintenance of, or depreciation allowance relating to, guest-houses are allowable under Sections 30 and 32, respectively, inspite of the provisions of Section 37(4) whereunder all expenditure incurred on such maintenance and depreciation allowance in respect of guest-houses and assets therein are specifically made disallowable ?

The Court (speaking through Altamas Kabir, J) has answered the above question in the negative, i.e., against the taxpayer.