RAJASTHAN COTTON MILLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Tribunal, Jaipur Bench, Jaipur has referred the following question of law which is said to arise out of its order dt. 28th March, 1977 passed in IT Appeal No. 278 (Jp.) 1976-77 relating to the asst. yr. 1974-75 :

(2.) THE ITO vide his order dt. 1st March, 1975 disallowed Rs. 7,269 on the ground that the amount relates to entertainment expenses. On appeal the AAC vide his order dt. 7th April, 1976, deleted the disallowance of Rs. 7,269 made by the ITO. THE Tribunal, relying on CIT vs. Veeriah Reddiar 1976 CTR (Ker) 341 (FB) : (1977) 106 ITR 610 (Ker) (FB) opined that the amount of Rs. 7,269 is hit by provisions of s. 37(2B) of the Act and, therefore, it reversed the order of the AAC restored that of the ITO. It may be stated that the Tribunal preferred the view taken by the Full Bench in Veeriah Reddiar's case (supra) and did not follow CIT vs. Patel Bros. & Co. Ltd. (1977) 106 ITR 424 (Guj) and Brij Raman Dass & Sons vs. CIT 1975 CTR (All) 223 : (1976) 104 ITR 541 (All).