VINEET TALKIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN accordance with the direction of this court under Section 256(2) of the INcome-tax Act, 1961, the Tribunal has stated the case and referred to this court for its decision, the following question of law, viz. :

(2.) THE relevant assessment year is 1972-73. THE assessee owns a cinema theatre and earns income out of the same. One of the items claimed as deduction on account of expenses was Rs. 2,000 out of the total miscellaneous expenses claimed at Rs. 12,298. This amount of Rs. 2,000 claimed to have been spent in extending ordinary courtesies of the business was disallowed as a deduction at the time of assessment by the Income-tax Officer. THE Appellate Assistant Commissioner affirmed that conclusion. Before the Tribunal in further appeal by the assessee, no challenge was made to the finding disallowing the deduction of Rs. 2,000. THEreafter, an application was made under Section 256(1) of the Act by the assessee to refer the above question of law to this court for its decision. That application was rejected apparently on the ground that the claim for the deduction had been expressly given up by the assessee before the Tribunal. Subsequently, on an application made under Section 256(2) of the Act, a direction was given by this court to refer the above question of law and this reference has been made accordingly.