COMMISSIONER OF INCOME TAX Vs. MAHARANA MILLS LIMITED

JUDGEMENT

(1.) AT the instance of the Revenue, the Income -tax Appellate Tribunal has referred the following three questions to this court, under section 256(1) of the Income -tax Act, 1961, for its opinion :

(2.) DURING the assessment proceedings for the assessment year 1976 -77, the assessee claimed deduction in respect of various items of expenditure. It had claimed deduction of Rs. 36,329 being the messing expenses and part of tea expenses. They also claimed deduction of Rs. 69,076 being the expenses incurred on current repairs of the guest house Villa 7 at Porbandar. Both these expenditures were disallowed by the Income -tax Officer on the ground that the first expenditure being in the nature of entertainment was required to be disallowed under section 37(2B) and the other expenditure was not allowable under section 37(4).

(3.) THE Revenue, therefore, approached the Tribunal by way of an appeal and in that appeal the Tribunal also confirmed the view taken by the Appellate Assistant Commissioner. It, therefore, moved the Tribunal for referring the above -stated three questions to this court.