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2007 (9) TMI 270 - MADHYA PRADESH HIGH COURTExpenses on food and beverages - Explanation 2 to section 37(2A) of the Income-tax Act - The facts which are essential to be stated are that the assessee is a partnership firm and derived income from manufacture and sale of bidis for the assessment year 1984-85. The assessee claimed expenditure of Rs.1,60,239 towards messing. The Assessing Officer disallowed the claim of Rs.10,000, vide order dated July 8, 1986, and allowed the messing expenses to Rs.1,50,239. – CIT revised the order u/s 263 to restrict the deduction to Rs. 5000 only – held that - the expenditure incurred by the assessees in providing ordinary meals to outstation customers according to the established business practice, was a permissible deduction in spite of sub-section (2A) of section 37, to which the assessees were entitled in the computation of their income for the purpose of payment of tax under the Income-tax Act, 1961, during the relevant period prior to April 1, 1976 – decided in favor of assessee.
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