The point of admissibility of expenditure incurred on guest houses in income-tax assessments with reference to Section 37(4) of the Income-tax Act, 1961 [i.e. the Act, 1961] has some divergence of judicial opinion. It is very difficult to see why all the expenditure [i.e. rent, repairs of the guest house building, depreciation, interest, etc. which are deductible under Sections 30 to 36] should be taken into the same treatment like the expenditure covered under Section 37(1) of the Act, 1961 and thus, hit by Section 37(4) of the Act, 1961. It is also arguable why the Department cannot take the correct view prospectively from the moment it realizes its mistakes. Even courts change their views. It is reiterated that under Section 37(4) of the Act, 1961, any expenditure incurred after February 28, 1970, on the maintenance of any residential accommodation in the nature of a guest house is not allowable as a deduction unless it is incurred on a guest house maintained as a holiday ....