H. N. DEVANI, J. ( 1 ) THE Income-tax Appellate Tribunal, Ahmedabad Bench b has referred the following question under Section 256 (1) of the Income-tax Act, 1961 (the Act), at the instance of the Commissioner of Income-tax, Baroda: ?whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the expense incurred on running and maintenance of cars are to be excluded for making the disallowance u/s. 37 (3a) of the Act ?? ( 2 ) THE Assessment Year is 1985-86 and the corresponding accounting period is 31st March, 1984. The assessee, at the relevant point of time, was a wholly owned Government of India Undertaking, engaged in the manufacturing of petro chemicals. During the year under consideration, the assessee had claimed expenditure towards running and maintenance of motor cars to the tune of Rs. 32,64,632/ -. While framing assessment under Section 143 (3) of the Act, the Assessing Officer invoked the provisions of Section 37 (3a) of the Act and disallowed 20% of the total expenditure in excess of Rs. 1,00,000/ -. ( 3 ) THE assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals ). Before the Commissioner of Income-tax (Appeals) it was contended on behalf of the assessee that Vehicle taxes, drivers salary, repairs and insurance which are otherwise admissible under Section 31 are not covered by the provisions of Section 37 (3a) of the Act, hence, the same cannot be considered as expenses for running and maintenance of motor cars under Section 37 (3b) of the Act. The Commissioner of Income-tax (Appeals) vide his order dated 4th July, 1989 held that the above mentioned expenses are otherwise admissible under Sections 30, 31 or 37 of the Act and hence, in view of the decision of the ITAT Bombay Bench-D in the case of I. A. C. Vs. Fulford (I) Ltd. (1989) TTJ (B. com) 285 the same cannot be disallowed under Section 37 (3a) of the Act. The Commissioner of Income-tax (Appeals) accordingly directed the Assessing Officer to exclude expenses towards Vehicle tax, salary to drivers, repairs to motor cars and insurance premium amounting to Rs. 11,65,004/- while calculating disallowance under Section 37 (3a) of the Act. ( 4 ) THE Revenue carried the matter in appeal before the Income-tax Appellate Tribunal. The Commissioner of Income-tax (Appeals) accordingly directed the Assessing Officer to exclude expenses towards Vehicle tax, salary to drivers, repairs to motor cars and insurance premium amounting to Rs. 11,65,004/- while calculating disallowance under Section 37 (3a) of the Act. ( 4 ) THE Revenue carried the matter in appeal before the Income-tax Appellate Tribunal. The Tribunal by its order dated 27th August, 1993 held that the action of the Commissioner of Income-tax (Appeals) was justified in view of the decision of the Bombay High Court in the case of Commissioner of Income-tax Vs. Chase Bright Steel Ltd. (1989) 75 CTR 60 and the decision of the ITAT Bombay in the case of I. A. C. Vs. Fulford (I) Ltd. (supra) and dismissed the appeal. ( 5 ) HEARD Mr. M. R. Bhatt, learned Senior Standing Counsel for the applicant-Revenue and Mr. M. J. Shah, learned advocate for the respondent-assessee. Section 37 (3a) of the Act provides for disallowance of 20% of the aggregate expenditure exceeding one hundred thousand rupees incurred on any one or more items referred to in Section 37 (3b ). For the present purpose the relevant item of expenditure is ?running and maintenance of aircraft and motor cars? as laid down in clause (ii) of sub-section (3b) of Section 37 of the Act. In the case at hand, the controversy relates to the expenses incurred for running and maintenance of motor cars which are in the nature of (i) Vehicle tax, (ii) Drivers salary, (iii) motor cars repairs, and (iv) insurance premium. ( 6 ) MR. BHATT has very fairly invited attention of the judgment rendered by this Court on 22nd September, 2005 in the case of Commissioner of Income-tax Vs. Broach Textile Mills Ltd. , Income Tax Reference No. 65 of 1994, and submitted that in so far as item Nos. (iii) and (iv) i. e. motor car repairs and insurance premium are concerned, the controversy in question stands concluded against the revenue by the said decision. In the circumstances, in so far as the expenditure incurred towards motor car repairs and insurance premium is concerned, for the reasons stated in the case of Commissioner of Income-tax Vs. Broach Textile Mills Ltd. (supra) the question referred is answered in the affirmative i. e. in favour of the assessee and against the revenue. In the circumstances, in so far as the expenditure incurred towards motor car repairs and insurance premium is concerned, for the reasons stated in the case of Commissioner of Income-tax Vs. Broach Textile Mills Ltd. (supra) the question referred is answered in the affirmative i. e. in favour of the assessee and against the revenue. ( 7 ) IN so far as expenditure towards vehicle tax and drivers salary are concerned, the same being general in nature would be admissible under Section 37 (1) of the Act. Under the provisions of Section 37 (3a) of the Act, notwithstanding anything contained in sub-section (1) of Section 37 of the Act, 20% of any expenditure incurred by an assessee on items referred to in sub-section (3b) in excess of Rs. 1,00,000/- is required to be disallowed. Thus, any expenditure allowable under Section 37 (1) of the Act, which is incurred on any of the items referred to in sub-section (3b) would attract the provisions of Section 37 (3a) of the Act. In the present case, it is not in dispute that the expenditure incurred towards vehicle tax and drivers salary is in the nature of expenditure incurred on running and maintenance of motorcars as contemplated under clause (ii) of Section 37 (3b) of the Act. It is also not in dispute that the said expenditure is deductible under Section 37 (1) of the Act. Hence, the said expenses fall within the ambit of Section 37 (3a) of the Act and accordingly, 20% of the said expenses in excess of one hundred thousand rupees are liable to be disallowed under the said provision. ( 8 ) LEARNED advocate, Mr. M. J. Shah, has very fairly drawn attention to the decision rendered by the Gauhati High Court in the case of George Williamson (Assam) Ltd. Vs. Commissioner of Income-tax, [1997] 223 ITR 203 (Gauhati) as well as to the decision rendered by the Madras High Court in the case of Rane (Madras) Ltd. Vs. Commissioner of Income-tax, [2003] 259 ITR 307 (Mad.) which support the view taken by this Court in the present case. ( 9 ) IN the circumstances, the question referred in so far as the expenses incurred on vehicle tax and drivers salary are concerned, is answered in the the negative i. e. in favour of the revenue and against the assessee. ( 10 ) THE reference stands disposed of accordingly. ( 9 ) IN the circumstances, the question referred in so far as the expenses incurred on vehicle tax and drivers salary are concerned, is answered in the the negative i. e. in favour of the revenue and against the assessee. ( 10 ) THE reference stands disposed of accordingly. There shall be no order as to costs. .