Judgment Chandramauli Kr.Prasad, J. 1. In all these references, common questions of law with little variation of facts, arise and as such, they were heard together and are being disposed of by this common judgment. 2. The assesses, M/s Alkem Laboratories (P) Limited is a private limited company deriving income from manufacturing and sale of medicines. The assessee claimed deduction under two heads viz. Rs. 70,000.00 on account of repairs of rental premises and Rs. 10,998.00 spent on plumbing work. The Assessing Officer disallowed both the claims as he was of the opinion that these two items were capital expenditures of the asessee. The assessee then preferred appeal, inter alia, contending that the expenses it claimed were purely of the nature of repairs and no new assets having come into being, the deduction is fit to be granted. The Commissioner of Income Tax (Appeals) allowed the deduction of the amount spent on the repairs but did not express any opinion in respect of the amount spent in plumbing work. While doing so, the Commissioner of Income Tax (Appeals) observed that repairing expenditures incurred by the assessee in respect of the tenanted building cannot be allowed unless there is an agreement between the landlord and the assessee in view of Sec. 30(a)(i) of the Income Tax Act, hereinafter referred to as the Act. However, he was of the opinion that even if the expenditure of a tenanted building cannot be allowed u/s. 30(a)(i) of the Act, unless there is an agreement between the landlord and the assessee, but it can be allowed under Section 37 of the Act. 3. The Revenue, aggrieved by the same, preferred appeal before the Patna Bench of the Income Tax Tribunal, hereinafter referred to as the Tribunal. The Tribunal affirmed the order of the Commissioner of Income Tax (Appeals) in respect of Rs. 70,000.00 the amount spent in the repair of the rental premises. 4. On these facts, the Tribunal, at the instance of the Revenue, had referred the following questions of law for our opinion: "Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the disallowance made in respect of tenanted premises u/s. 30(1)(ii) [sic 30(a)(i)] can be allowed u/s 37 of the I.T. Act? 5. 5. In the light of the order dated 13.1.1994 passed by this Court at the instance of the Revenue, Patna Bench, of the Income Tax Appellate Tribunal had drawn the statement of the cases and referred the following common question of law as formulated by this Court: "Whether on the facts and in the circumstance of the case, the Tribunal was right in law in holding that the disallowance made in respect of tenanted premises u/s. 30(1 )(ii) [sic 30(a)(i)] can be allowed u/s. 37 of the I.T. Act? 6. The assessee is a private limited company and derives income from manufacturing and sale of medicine, it claimed repairs and maintenance of rental premises to the extent of Rs. 1,59,026.00 for the assessment year 1983-84 and Rs. 2,24,918.00 for the assessment year 1984-85. The Assessing Officer disallowed Rs. 45,226.00 and Rs. 10,000.00 of the assessment year 1983-84 and 1984-85 respectively as in its opinion, the expenses incurred wore of capital nature. 7. The appeal yielded no result and the aforesaid order was affirmed by the Commissioner of Income Tax (Appeals). On these facts, at the direction of this court u/s. 256(2) of the Act. the aforesaid question has been referred for our opinion. 8. At the outset, Mr. A.K. Rastogi, appearing on behalf of the assessee, points out that the Central Board of Direct Taxes, vide Instruction No.1903 dated 28.10.1992 and Instruction No. 1777 dated 4.11.1987, had put monetary limits of Rs. 25,000.00 for departmental appeals (in income tax matter) before the Appellate Tribunal, Rs. 50,000.00 for filing reference to the High Court and Rs. 1,50,000.00 for filing appeal to the Supreme Court. He further points out that later on, the aforesaid instructions were superseded by the Central Board of Direct Taxes vide Instruction dated 27.03.2000 and it decided that appeals will be filed in cases where tax effect exceeds the revised monetary limit given as under "(i) Appeal before the Appellate Tribunal in income-tax Matters) Rs. 1,00,000.00 (ii) Appeal under Section 260A/reference/u/s. 256(2) before the High Court Rs. 2,00,000.00 (iii) Appeal in the Supreme Court Rs. 5,00,000.00" 9. In partial modification of the above instructions, by notification dated 24.10.2005, it has been decided that appeal will henceforth be filed only in cases where the tax effect exceeds the revised monetary limits given hereunder: "(i) Appeal before Appellate Tribunal- Rs. 2,00,000.00 (iii) Appeal in the Supreme Court Rs. 5,00,000.00" 9. In partial modification of the above instructions, by notification dated 24.10.2005, it has been decided that appeal will henceforth be filed only in cases where the tax effect exceeds the revised monetary limits given hereunder: "(i) Appeal before Appellate Tribunal- Rs. 2,00,000.00 (ii) Appeal u/s 260A -Rs.4,00,000.00 (iii) Appeal before the Supreme Court-Rs. 10,00,000.00" 10. The aforesaid instructions also provide that cases involving substantial question of law of importance as well as cases where same question of law is likely to repeatedly arise, such cases shall be considered on its own merit, without being hindered by the monetary limits. The aforesaid instructions were to come into effect from 31.10.2005. 11. Mr. Rastogi points out that tax effect in all these cases are within the monetary limit as prescribed by the Board of Direct Taxes and as such, the references be returned unanswered. He submits that although the instruction dated 27.03.2000 and 24.10.2005, referred to above, came into being after the references were made or called, but that shall govern these cases also. In support of his submission, he has placed reliance on a judgment of the Bombay High Court in the case of Commissioner of Income-Tax V/s. Pithwa Engineering Works, 2005 276 ITR(Bom) 519 and our attention has been drawn to the following passage from the said judgment: "xxx One fails to understand how the Revenue can contend that so far as new case are concerned, the circular issued by the Board is binding on them and in compliance with the said instructions, they do not file references if the tax effect is less than Rs. 2 lakhs. But the same approach is not adopted with respect to the old referred cases even if the tax effect is less than Rs. 2 lakhs. In our view, there is no logic behind this approach. This court can very well take judicial notice of the fact that by passage of time money value has gone down, the cost of litigation expenses has gone up, the assesses on the file of the Departments have increased; consequently, the burden on the Department has also increased to a tremendous extent. The corridors of the superior courts are choked with huge pendency of cases. The corridors of the superior courts are choked with huge pendency of cases. In this view of the matter, the Board has rightly taken a decision not to file references if the tax effect is less than Rs. 2 lakhs. The same policy for old matters needs to be adopted by the Department. In our view, the Boards circular dated March 27, 2000, is very much applicable even to the old references which are still undecided. The Department is not justified in proceeding with the old references wherein the tax impact is minimal. Thus, there is no justification to preceed with decades old references having negligible tax effect. We, for the above reasons, do not think it necessary to answer the reference made to this court for the assessment year 1975-76 having negligible tax effect. Accordingly, reference stands returned unanswered with no order as to costs." 12. Mr. S.K. Sharan, Standing Counsel appearing on behalf of the Revenue, states that he has instruction to press these references. He submits that once the references have been made, same are to be answered and cannot be returned without opinion. 13. Having appreciated the rival submission, I am not inclined to return the references unanswered. The instruction of the Board of Direct Taxes fixing monetary limit for filing appeals and references are administrative in nature, whereas the references made and called are statutory in nature. In my opinion, the administrative instructions issued by the Central Board of Direct Taxes, are for the guidance of the functionaries of the Income-Tax Department. It is neither binding on the Tribunal nor the High Court or for that matter, the assessee. In my opinion, in case of conflict, the administrative instruction must give way to the statutory provision. Thus, on first principle, the plea put forth by the assessee for return of the references, deserves to be rejected. 14. True it is that the judgment of the Bombay High Court in the case of Pithwa Engineering Works (supra) supports the contention of the assesses, but the principle, which I have enunciated hereinbefore, prohibits me to charter that course and return the references unanswered. In fact, there are several precedent to the contrary. 14. True it is that the judgment of the Bombay High Court in the case of Pithwa Engineering Works (supra) supports the contention of the assesses, but the principle, which I have enunciated hereinbefore, prohibits me to charter that course and return the references unanswered. In fact, there are several precedent to the contrary. The Punjab and Haryana High Court, had the occasion to consider the effect of the Boards circular dated 27.03.2000 in the case of Rani Paliwal V/s. Commissioner of Income-Tax, 2004 268 ITR(P&H) 220, in which it has been held that the Tribunal is not bound to dismiss the appeals in view of the Boards circular and it is not bound by any such instruction. It also held that once the appeal is filed, the Tribunal is bound to decide the same on merit. Relevant portion of the judgment, reads as follows: "xxx In any case, the Boards circular is only an instruction issued to the income-tax authorities not to file appeals where the tax effect is less than Rs. 1,00,000.00. The Tribunal is not bound by any such instruction and once the Department files an appeal, the Tribunal was bound to decide the same on the merits." 15. The Rajasthan High Court had the occasion to consider this question in the case of Commissioner of Income-Tax V/s. Rajasthan Patrika Ltd., 2002 258 ITR(Raj) 300 in which it has held that the circulars providing for filing the appeal in case tax effect is less than indicated before various forums, are administrative in nature and in case, the Revenue prefers appeal or reference is made to the Court, same is not fit to be dismissed in the light of the administrative instruction. Relevant portion of the judgment, reads as follows: "xxx These are administrative instructions and in spite of these administrative instructions if the department prefers to file an appeal or make a reference to this Court, in our view on such administrative instructions the appeal of the Department should not be dismissed or the reference should not be rejected. We do not find any infir mity in disposing the appeal on the merits." 16. The Delhi High Court in the case of [ (2002)255 ITR 460 (Delhi)] has held that the circular issued by the Board, in no way, prohibits or curtails the power of the Tribunal for making reference. 17. We do not find any infir mity in disposing the appeal on the merits." 16. The Delhi High Court in the case of [ (2002)255 ITR 460 (Delhi)] has held that the circular issued by the Board, in no way, prohibits or curtails the power of the Tribunal for making reference. 17. The Supreme Court, in the case of Commissioner of Income-Tax V/s. Hero Cycles Pvt. Ltd. and Others, 1997 228 ITR 463, has held that the circular issued by the Central Board of Direct Taxes can bind the Income-Tax Officer, but shall not bind the appellate authority or the Tribunal or the Court or even the assessee. 18. The Punjab & Haryana High Court had the occasion to consider this question in the case of Commissioner of Income-Tax V/s. Abhishek Industries Ltd., 2006 286 ITR(P&H) 01 and contrary to the view of the Bombay High Court in the case of Pithwa Engineering Ltd. (supra) held that once the reference is before the Court, same has to be decided on its own merit. Relevant portion of the judgment, reads as follows: "xxx Accordingly, we do not deem it appropriate to restrain from discharging our judicial function in hearing and deciding the appeal on merits. As far as the issue as to whether the circular prescribing limits for filing appeals before the courts or the Tribunals is concerned, different courts have taken different views as to whether in case an appeal is filed, which involves tax effect less than the amount prescribed in the circular for filing the appeals, still the Court/Tribunal is bound to reject the same as such or to dispose of it on merits." 19. In the light of the discussions aforesaid, I am not inclined to return the references unanswered. 20. Now, I proceed to consider the references on merit. 21. Section 37(1) of the Act, at the relevant time, stood as follows: SectionGeneral; "37(1).Any expenditure not being expenditure of the nature described in Sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee, let out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head profits and gains of business or profession." xxx xxx xxx 22. Counsel representing the Revenue contend that in view of the plain language of Sec. 37 of the Act, the assessee shall be precluded from claiming benefit therein of the liability of the nature described in Ss. 30 to 36 of the Act. 23. Counsel representing the assessee, however, contends that Sec. 37(1) of the Act shall not preclude the assessee for consideration of claim which would have fallen under Ss. 30 to 36 of the Act. 24. Having appreciated the rival submission, I am inclined to accept the plea put forth by the assessee. In my opinion, Sec. 37(1) of the Act is a provision of residuary nature and once a provision is found to be residuary in nature, the mere fact that a claim does not fall under any of the Ss. 30 to 36 of the Act, same will not automatically, make the claim unsustainable u/s. 37 of the Act. In my opinion, Sec. 37 of the Act is a general section for grant of deduction on certain accounts not enumerated in Ss. 30 to 36 of the Act. I am further of the opinion that the expression in the nature of used in Sec. 37(1) of the Act, does not intend to stultify a legitimate claim in accordance with the principles of accountancy and well established commercial practice. If the expenses are not deductible under Ss. 30 to 36 of the Act but conditions prescribed u/s. 37 are satisfied, then such expenses are required to be deducted while computing the income. Therefore, in my opinion, certain expenses may not be admissible u/s. 30(a)(i) of the Act, but can be admissible u/s. 37(1) of the Act. 25. Various precedents support the view which I have taken. The Kerala High Court had the occasion to consider this question in the case of Commissioner of Income Tax, Kerala V/s. High Land Produce Co. Ltd., 1976 102 ITR(Ker) 803 in which it has been held as follows: "xxx The residuary nature of the provision in Sec. 37(1) will, therefore, have to be given its full play. Bearing in mind the reason for the introduction of the words within the brackets "not being expenditure of the nature described in Ss. 30 to 36" we have to remember that those words do not preclude certain species of liabilities but only exclude consideration of liabilities which would fall under any of those sections. Bearing in mind the reason for the introduction of the words within the brackets "not being expenditure of the nature described in Ss. 30 to 36" we have to remember that those words do not preclude certain species of liabilities but only exclude consideration of liabilities which would fall under any of those sections. We shall explain. Taking for instance, the liability for gratuity, the nature of the liability is a liability towards gratuity. It is towards that liability provision has been made u/s. 36(1)(v) of the Act. If the submission of counsel for the revenue is accepted, only payments made to a fund such as contemplated by Sec. 36(1)(v) of the Act will be permissible as deductions towards gratuity liability for computing profits and gains. We cannot accept this contention. We cannot give a meaning to the words "in the nature of" so as to stultify a legitimate claim in accordance with the principles of accountancy and according to well-established commercial practice and which must be taken into account in ascertaining the true profits and gains of business. Unless there be some statutory provisions which in clear terms or by necessary implication negatives against the adoption of such principles and practice, those principles and practice must be given their full play." 26. The judgment of the Kerala High Court in the case of Commissioner of Income-Tax, Kerala (supra), was assailed before Supreme Court and following its earlier judgment in the case of Commissioner of Income Tax, Kerala V/s. High Land Produce Co. Ltd., 1986 158 ITR 416, it dismissed the appeal. 27. The Gujarat High Court had the occasion to consider this question in the case of Khimji Visram and Sons (Gujarat) Private Limited V/s. Commissioner of Income-Tax, 1994 209 ITR(Guj) 993 and it answered in the following words: "xx Hence, if the expenses are not covered by the specific provisions of Sections 30 to 36 and yet the said expenses are laid out or expended wholly and exclusively for the purposes of the business or profession and they are not in the nature of capital expenditure or personal expenses of the assessee, then deduction is required to be given for the said expenses. It is quite possible that with regard to some expenses there may be overlapping between Ss. 30 to 36 and Sec. 37. In that set of circumstances, if the expenses are deductible under Ss. It is quite possible that with regard to some expenses there may be overlapping between Ss. 30 to 36 and Sec. 37. In that set of circumstances, if the expenses are deductible under Ss. 30 to 36, then Sec. 37 is not to be resorted to. But if the said expenses are not deductible under Ss. 30 to 36 and the conditions prescribed u/s. 37 are satisfied, then the said expenses are required to be deducted while computing the income unless there is a specific prohibition." 28. The Punjab and Haryana High Court considered this question in the case of Commissioner of Income-Tax V/s. Punjab Financial Corporation Ltd., 2007 295 ITR(P&H) 510 and held as follows: "xxx Section 30 to 36 of the Act provides for various deductions which is available while computing the income from business and profession. Section 37 is a generals section which provides for deduction of expenditure not included in any of the Ss. 30 to 36 of the Act. The scope of Section 37 of the Act came up for consideration before the Kerala High Court in CIT V/s. High Land Produce Co. Ltd., 1976 102 ITR 803, wherein it was held that the provisions of Sec. 37 of the Act cannot be given a restricted meaning. Mere fact that the claim does not fall in any of the Ss. 30 to 36 will not automatically make the claim unsustainable u/s. 37(1) of the Act as well. Section 37 being a general section, is for grant of deduction on certain accounts not enumerated in Sec. 30 to 36 of the Act." 29. The Allahabad High Court had the occasion to consider this question in the case of Girdhari Dass and Sons V/s. Commissioner of Income-Tax, 1976 105 ITR(All) 339 and answered the question in the following words: "xxx We, accordingly, answer the question by saying that the sums of Rs. 10,859.00, Rs. 9,865.00 and Rs. 1,000.00 were admissible allowance not u/s. 30(a)(i) but u/s. 37 of the Act." 30. Accordingly, the question is answered in the affirmative against the Revenue and in favour of the assessee. 31. Let a copy of this opinion be forwarded to the Patna Bench of the Income Tax Tribunal. J.N.Singh, J. 32 I agree.