Law:

Section:

Section 37(2) of the Income-tax Act, 1961 - Entertainment expenditure - Assessment year 1974-75 - Whether messing expenses incurred by assessee in supplying meals to trade constituents could not be characterised as entertainment expenditure under section 37(2B) and were allowable as a deduction in computing assesssee's total income - Held, yes FACTS The assessee-firm derived income from adat and sale of agricultural commodities. It claimed deduction of expenses incurred for providing meals to trade constituents on the ground that they were wholly laid out for the purpose of the business. The ITO disallowed the claim under section 37(2B) on the view that the said expenditure was of entertainment nature. The AAC held that the said expenses were not in the nature of entertainment and it accordingly deleted the addition. The Tribunal affirmed the finding of the AAC. On reference: HELD Following the decision of the same High Court in Devichand Bastimal v. CIT [1985] 156 ITR 166, it was to be held in the instant case that the expenses incurred by the assessee could not be characterised as entertainment expenditure under section 37(2B) and were allowable as deduction in computing the assessee's total income. Note: The decision is in favour of the assessee. CASE REVIEW Devichand Bastimal v. CIT [1985] 156 ITR 166 (Raj.) followed & relied upon. CASES REFERRED TO Devichand Bastimal v. CIT [1985] 156 ITR 166 (Raj.) B.R. Arora for the Applicant. R. Mehta for the Respondent. JUDGMENT S.C. Agrawal, J.- In this reference made by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, hereinafter referred to as the Tribunal, the following question has been referred for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the messing expenses claimed by the assessee in supplying meals to the trade constituents are not in the nature of ' entertainment' within the meaning of section 37(2B) of the Income-tax Act and are allowable as a deduction in computing the total income for the assessment year 1974-75?" M/s. Meg Raj Sohan Lal, hereinafter…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492