COMMISSIONER OF INCOME TAX Vs. BAGRAJ AND CO

JUDGEMENT

(1.) THE assessee claimed deduction of Rs. 2,261 as expenses incurred under the head "fooding expenses". THE assessee is to provide food to its customers. THE aforesaid amount of Rs. 2,261 was incurred in the assessment year 1973-74. THE ITO held that these expenses were in the nature of entertainment expenses and were not maintainable. On appeal, however, this disallowance was limited to Rs. 500. THE Tribunal agreed with the view of the AAC. At the instance of the CIT, the Tribunal has referred the following question of law for our opinion :

(2.) IN INcome Tax Reference No. 192 of 1976 (CIT v. Manoo Ram Ram Karan Dass) decided on 2nd May, 1978 [since reported in [1979] 116 ITR 606 (All) ] this court held that such fooding expenses for customers were not permissible deductions.

(3.) WE, therefore, answer the question referred to us by saying that the claim of the assessee for the deduction of Rs. 2,261 was a permissible deduction to the extent of Rs. 1,761 only. The assessee will be entitled to costs which are assessed at Rs. 200.