RANE MADRAS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) FOUR questions have been referred to us for our consideration, at the instance of the assessee. The assessment year is 1984-85.

(2.) THE first question is whether in the facts and in the circumstances of the case the Tribunal was right in holding that the sum of Rs.75,706/- being salary paid to the drivers should be taken into account for the purpose of computing the disallowance under section 37(3A) for the Assessment Year 1984-85.

(3.) BY the very terms of Section 37(2-A) entertainment expenditure includes expenditure on hospitality extended by the assessee to any person whether by way of provision of food or bewerages or in any other manner whatsoever. The expenditure incurred on providing food and entertainment at the time of Annual General Meeting is clearly covered by that provision. The question is, therefore, required to be and is answered in favour of the Revenue and against the assessee.