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2002 (3) TMI 7 - HC - Income Tax"Whether on a proper interpretation of the provisions of section 37(2A) read with Explanation 2 of the Income-tax Act, 1961, the Tribunal was justified in disallowing Rs. 19,918 being cost of gift articles by treating the same as entertainment expenses?" - The words "hospitality - of every kind" by the assessee to any person includes every type of expenditure on entertainment. If the assessee distributes the suit lengths that cannot be taken out from the nature of entertainment expenses. Though it may be for the business, once the provision is there such type of expenses cannot be allowed. As stated earlier sub-section (2A) starts with a non obstante clause and Explanation 2 to section 37(2A) includes every type of expenses, therefore, in our view, there is nothing wrong in the order of the Tribunal and this type of expenditure is hit by the Explanation 2 to sub-section (2A) of section 37 of the Act. In the result, we answer the question in the affirmative, i.e., in favour of the Revenue and against the assessee.
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