TMI Blog1987 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... in the circumstances of the case, sum of Rs. 1,79,155 debited under the head " Business promotion expenses " was not rightly disallowable as expenditure in the nature of entertainment expenditure and also partly as expenditure for maintenance of a guest house, for the stay of foreign guests (and not meant as holiday home for low-paid employees of assessee), under section 37(2B) and under section 37(4) of the Income-tax Act ? (4) Whether, on the facts and in the circumstances of this case, the expenditure of Rs. 893 paid to various clubs by the assessee for the purpose of entertaining foreign guests is not to be disallowed under section 37(2B) of the Act ? (5) Whether, on the facts and in the circumstances of the case, the amount of Rs. 22,722 debited by the assessee under the head " Entertainment expenditure " spent by it for providing coffee, tea and snacks to customers is not to be treated as expenditure in the nature of entertainment expenditure and disallowed under section 37(2B) of the Act? (6) Whether, on the facts and in the circumstances of the case, the amount of Rs. 1,49,965 spent on agmark, charges, Rs. 2,14,860 spent on export licences fee and inspection charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing normal lunch and dinner to various " trade constituents ". So, it allowed the entire claim of Rs. 2,668. In respect of the Guntur branch office, the company claimed a sum of Rs. 72,887 towards mess expenditure and Rs. 50,691 mess expenditure at the Madras guest house, totalling Rs. 1,23,578. The Income-tax Officer disallowed the entire claim. On appeal before the Appellate Assistant Commissioner, it was contended that the accommodation maintained is not in the nature of guest house but it is only a transit accommodation for the purpose of accommodating the employees and business associates while, at the above two places (Madras and Guntur) for the purpose of the appellant's business. Therefore, it cannot be said that it is maintained as a matter of hospitality and it should be taken as one maintained wholly and exclusively for the purpose of business and it is not covered by section 37(4). In support thereof, reliance was placed on a decision of the Income-tax Appellate Tribunal, Ahmedabad Bench, in Navasari v. A. D. P. P. Billimoria (ITA No. 48 (Ahd)/75-76 dated 30-1-1976). While acceding to this contention, the Appellate Assistant Commissioner held thus: " In this view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Tribunal in its order, it was so stated. Though normally we have to look to the statement of the case, since the Appellate Tribunal appears to have committed an obvious mistake apparent from the record, we have referred to the Appellate Assistant Commissioner's order (annexure-B) and the Tribunal's order (annexure-C), which are part of the record, only with a view to straighten the record and to bring out the correct position on findings. The Income-tax Officer disallowed a sum of Rs. 2,16,215 out of Rs. 2,21,515 from " business promotion expenses " on the ground that they are purely expenses on entertainment and hence they are not a lowable. On appeal by the company, the Appellate Assistant Commissioner gave relief of Rs. 1,79,155. The Revenue carried the matter in appeal. The Appellate Tribunal found that the same issue was considered by the Tribunal for the assessment year 1972-73 and, for the reasons mentioned therein, it upheld the order of the Appellate Assistant Commissioner that the expenditure incurred on foreign customers for their food, lodging and other expenses should be allowed. As regards the guest house expenses also, it was held that the guest house was maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue, has contended that though the company has business connections with U.S.S.R. and G.D.R. and the trade delegates from those countries have visited India in connection with the purchase of tobacco, the expenditure incurred on them by the company is " in the nature of entertainment expenditure ". Therefore, by operation of sub-sections (2) and (2B) of section 37 of the Act, the entire amount pertaining to questions Nos. (1), (2), (3) and (5) cannot be allowed as business expenditure under section 37(1) of the Act but is to be circumscribed within the slab prescribed in sub-section (2) of section 37. In support thereof, he placed strong reliance on CIT v. Veeriah Reddiar [1977] 106 ITR 610 (Ker) [FB]. He also further contends that though a Division Bench of this court in Addl. CIT v. Maddi Venkataratnam Co. Ltd. [1979] 119 ITR 514, held that the entire expenditure is to be disallowed, it defeats the very object of sub-sections (2), (2A) and (2B) of section 37 and, therefore, the entire amount cannot be allowed. The Appellate Tribunal found that the hosting of lunch or dinner to the foreign delegates was arranged in an appropriate and befitting manner. This finding is " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus : " (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head 'Profits and gains of business or profession'. (2) Notwithstanding anything contained in sub-section (1), no expenditure in the nature of entertainment expenditure shall be allowed in the case of a company, which exceeds the aggregate amount computed as hereunder : (i) on the first Rs. 10,00,000 of the profits at the rate of 1% or and gains of the business (computed before Rs. 5,000, whichever is making any allowance under section 33 or higher ; section 33A or in respect of entertainment expenditure) (ii) on the next Rs. 40,00,000 of the profits at the rate of 1/2% ; and gains of the business (computed in the manner aforesaid) (iii) on the next Rs. 1,20,00,000 of the profits at the rate of 1/4% ; and gains of the business (computed in the manner aforesaid) (iv) on the balance of the profits and gains N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure incurred after the 30th day of September, 1967, the sum which bears to the aggregate amount computed at the rate or rates specified in this sub-section, the same proportion as the number of days comprised in the period commencing on the 1st day of October, 1967, and ending with the last day of the previous year bears to the total number of days in the previous year. Explanation.-For the purposes of this sub-section and sub-section (2B), 'entertainment expenditure' includes (i) the amount of any allowance in the nature of entertainment allowance paid by the assessee to any employee or other person after the 29th day of February, 1968 ; (ii) the amount of any expenditure in the nature of entertainment expenditure (not being expenditure incurred out of an allowance of the nature referred to in clause (i)) incurred after the 29th day of February, 1968, for the purposes of the business or profession of the assessee by any employee or other person. (2B) Notwithstanding anything contained in this section, no allowance shall be made in respect of expenditure in the nature of entertainment expenditure incurred within India by any assessee after the 28th day of February, 1970." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come chargeable under the head " Profits and gains of business or profession ". But, however, this generality of sub-section (1) is circumscribed by employing the non obstante clause in sub-sections (2), (2A) and (2B), where it specified that " no expenditure in the nature of entertainment expenditure " shall be allowed in the case of a company which exceeds the aggregate amount computed in the manner prescribed in clauses (i) to (iv). Explanation 2 was made to remove the doubts in operating sub-sections (2) and (2A). Therefore, the question is : What is the meaning of the compendious expression " in the nature of entertainment expenditure ", couched in sub-sections (2), (2A) and 2(B) of section 37. Preceding the Act, under section 10(2)(xv) of the Indian Income-tax Act, 1922, in computing the income chargeable under the head " Profits or gains of any business or vocation carried on ", necessary allowance was being given in respect of any non-capital expenditure incurred solely for the purposes of earning such profits or gains. The Legislature enlarged its scope by the amendment brought to section 10(2)(xv) by the Amendment Act, 1939, introducing a proviso. Thereby, any expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance paid to him by the assessee. Then, by the Finance Act, 1970, Parliament further introduced sub-section (2B) in section 37 removing the last vestige. While introducing the Finance Bill, the Finance Minister stated on the floor of the House thus : " Those, who enjoy the hospitality of their business friends should now no longer find their sense of gratitude diminished by the thought that a part of the hospitality is really paid for by the exchequer." Section 37(2B) has been already extracted and needs no repetition. Section 37(2B) was omitted by the Finance Act, 1976, with effect from April 1, 1977, and it was again reintroduced by further amendment with effect from April 1, 1979, through the Taxation Laws (Amendment) Act, 1978. The later amendments are not relevant for the purpose of this case. Hence, the need to extract them is obviated. Maxwell on " The Interpretation of Statutes ", 12th edition, at page 137, in Chapter 6, under the caption " Construction to prevent evasion or abuse ", stated thus : " '.. . ...... the office of the judge is, to make such construction as will suppress the mischief, and advance the remedy, and to suppress all evasions for the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and object of the whole Act; to consider, according to Lord Coke: (1) What was the law before the Act was passed; (2) What was the mischief or defect for which the law had not provided; (3) What remedy Parliament has appointed; and (4) The reason of the remedy." The scope of the limitation provided under section 34(1A) of the Amendment Act fell for consideration before the Supreme Court. In that context, the rule of statutory construction of Mischief Rule was applied to a taxing statute. In Poppatlal Shah v. State of Madras, AIR 1953 SC 274; 4 STC 188, 193 (SC), Mukherjea J. (as-he then was) held at page 276, para. (7), thus: " It is a settled rule of construction that to ascertain the legislative intent, all the constituent parts of a statute are to be taken together and each word, phrase or sentence is to be considered in the light of the general purpose and object of the Act itself." In that case, the question was whether the title in the goods has passed under the Madras Sales Tax Act at the time when the transaction was entered into within the State of Madras or when the title in the goods passed to the buyer who is outside the State, on its receipt for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lunch provided to the foreign trade delegates by the company is in the nature of entertainment expenditure within the meaning of sub-section (2) or sub-section (2B) of section 37. In this regard, there is a cleavage in judicial thought on the scope of "entertainment expenditure "one torch-bearer being CIT v. Patel Brothers Co. Ltd. [1977] 106 ITR 424 (Guj), followed by this court in Maddi Venkataratnam's case [1979] 119 ITR 514, the connecting link being Divan C. J., being a party to both the judgments; and the contra is CIT v. Veeriah Reddiar [1977] 106 ITR 610 (Ker) [FB], speaking through Balakrishna Eradi J. (as he then was), followed in CIT v. Khem Chand Bahadur Chand [1981] 131 ITR 336 (P H) [FB]. At the cost of repetition, it may be necessary to recapitulate that section 37(1) gives right to an assessee to an allowance of business expenditure laid out or expended wholly or exclusively for the purposes of the business and profession (the expenditure not being in the nature of capital expenditure or personal expenses of the assessee) in computing the income chargeable to tax under the head " Profits and gains of business or profession ". But its width and sweep are sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso called upon to consider the effect of the non obstante clause in section 10(3)(c) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act (15 of 1960). The contention therein was that by virtue of the non obstante clause in section 10(3)(c), it must be confined to find whether the landlord owns a residential or non-residential building of his own in the city, town or village concerned and nothing more. While meeting that contention, Gopal Rao Ekbote J. (as he then was), speaking for the Bench, held thus (p. 223): " It must be understood that a non obstante clause is usually used in a provision to indicate that that provision should prevail despite anything to the contrary in the provision mentioned in such non obstante clause. In case there is any inconsistency or departure between the non obstante clause and another provision, one of the objects of such clause is to indicate that it is the non obstante clause which would prevail over the other clause. It does not, however, necessarily mean that there must be repugnancy between the two provisions in all such cases. " It was held that the purpose of the non obstante clause was that the entire clause (a) would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e context and setting in which it has been used. " It was held that in interpreting the expression " entertainment expenditure " occurring in sub-sections (2A) and (2B) of section 37 of the Act, the word " entertainment " should be taken to mean " hospitality of any kind extended by the assessee directly in connection with his business or profession." (emphasis supplied). In that case, the question was whether the expenditure for supplying cigarettes, coffee or meals to customers and constituents of the assessee would fall within the sweep of sub-sections (2A) and (2B) of section 37. The Full Bench has held against the assessee and in favour of the Revenue. In Khem Chand Bahadur Chand's case [1981] 131 ITR 336 (P H) [FB], Sandhawalia Chief justice, at page 347, held thus : " In construing the aforesaid provisions (section 37(1), (2), (2A)), what first meets the eye and deserves highlighting is the designed and considered use of the phraseology by Parliament in sub-sections (2) and (2A) aforesaid. The phrase deliberately employed is-'in the nature of entertainment expenditure'. It is not merely 'entertainment expenditure' or 'business entertainment simpliciter'. It is a soun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not lavish may be expended without any financial limits would in effect be frustrating the very purpose of the Legislature in enacting sub-sections (2) and (2A) and defeating the larger legislative intent of curbing excessive business entertainment, at the cost of the public exchequer. Beyond the prescribed limits, business entertainment is left to the discretion and the personal cost of businessmen themselves, and is not to be defrayed by public revenue." However, at page 355, a note of caution was administered by the Full Bench thus: ".. ...... an overly doctrinaire approach must be avoided. We are inclined to the view that all hospitality extended wholly and exclusively for the purposes of the business is within the net of the phrase 'in the nature of entertainment expenditure'. However, it is elementary that, in the first instance, such an expense must be a hospitality expense and that which, in ordinary parlance, cannot be even termed hospitality cannot by any stretch of imagination be either deemed to be entertainment or in the nature of entertainment. To reiterate, for an expense to come within the ambit of being in the nature of entertainment, it must first partake of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitions thus (p. 441 of 106 ITR): " (a) If the provision of food, drinks or any amusement to a client, constituent or customer is on a lavish or extravagant scale, or is of wasteful nature, it is entertainment per se. (b) If the provision of food or drinks to a client, constituent or customer is in the nature of bare necessity, or by way of ordinary courtesy, or as an express or implied term of contract or employment spelled out from longstanding practice or custom of trade or business, it will not amount to entertainment. (c) If the provision of food or drinks to a client, customer or constituent is in a liberal and friendly way, it may amount to entertainment having regard to the place, item and cost of such provision. (d) The provision of amusement to a client, customer or constituent by way of hospitality or otherwise will always be entertainment." It was held that, having regard to the nature and magnitude of the business of the assessee, it would be necessary for the assessee to make arrangements for providing meals to its up country constituents who visit it. Accordingly, the point was held in favour of the assessee. The Punjab and Haryana High Court in Khem Chand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... islature has expressed its intention. In particular, must the wording in sub-section (9) be considered." At page 644 it was held: " The word 'anything' in sub-section (9) meant business entertainment so that sub-section (9) related to the deduction of expenses incurred in the provision by any person of business entertainment which it is his trade to provide. I cannot agree. There is no trade or business of giving free hospitality. I see no reason why the word 'anything' should not be given its ordinary and natural meaning." Lord Simon of Glaisdale held at page 646 thus: "But a mere reading of section 15 of the Act, 1965, against the background of the preceding law, can leave no doubt that it was Parliament's ,conception that expenditure on business entertainment charged as a deduction against gross trading income was being fiscally abused, or that Parliament in section 15 was seeking to provide a remedy for what it conceived as such abuse. Nor can there be any doubt about the method which the draftsman chose to adopt in order to provide the remedy. Experience must have taught him that if a fiscal abuse is too precisely remedied, taxpayers with expert advice will find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction that governs the case. Entertainment involves hospitality of any kind which an assessee extends to a customer, client or a constituent for furtherance of his business or profession. It must be wholly and exclusively necessary for the purpose of his business or profession. The primary motive behind laying out or expending entertainment expenditure is commercial or professional expediency. The phrase " in the nature of entertainment expenditure " encompasses in its ambit entertainment expenditure proper as well as expenditure akin to it partaking of some, if not all, of the characteristics of entertainment expenditure. Even lavish or frugal hospitality is none the less a hospitality. So any entertainment expenditure would be in the nature of entertainment expenditure, but may not strictly business expenditure. Equally, every hospitality does not necessarily constitute Per se entertainment expenditure. It would appear to us that the Legislature treated entertainment expenditure as part of business expenditure claimable for allowance under section 37(1) from chargeability to tax. The businessman abused the facility given thereunder. Amendments by gradual process were made in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter was settled. The question is whether the expenditure incurred by the advocate or attorney or company is wholly and exclusively for the purpose of the profession or business ? Nobody except the host and guest attended. The primary object of arranging the lunch or dinner is to discuss and finalise the problem and incidentally lunch or dinner, as an act of hospitality, has been provided. An element of hospitality, undoubtedly, is involved in it. But the primary purpose is wholly professional or business and the expenditure is exclusively incurred in connection therewith. The consideration of hospitality is secondary. The entertainment expenditure stemmed from professional or business expediency and hospitality is integrally connected. It would thereby appear to be wholly coming under section 37(1) of the Act. (3) Take another case where a senior counsel of the Supreme Court is engaged on behalf of a company to argue a case in the High Court of Andhra Pradesh at Hyderabad. Counsel has been provided with lodging as an implied term of the contract. Though it is not necessary for the company to provide lunch and dinner to counsel, to make counsel comfortable, as an incident the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolved, it is not wholly and exclusively for the purpose of the business of the company. Therefore, it would neither fall under sub-section (1)--business expenditure--nor under subsection (2) nor (2B) of section 37 and is to be disallowed. (7) Take the case of a trade delegation, like the present case on hand, from USSR and GDR who visited India and the assessee entertains them extending hospitality and arranges residential accommodation, lunch and dinner during their stay in India. The question is whether it is wholly and exclusively necessary for the purpose of the business. The motivating factor may be for immediate benefit to the trade. But, there is no relationship as customers. It is only a prospective order to be placed by the trade delegates with the assessee-company. Though hosting a dinner or lunch and arranging residential accommodation may be due to commercial expediency and indirectly facilitates trade prospects, yet it does not attract in stricto sensu business expenditure but it is certainly entertainment expenditure. Under those circumstances, it is in the nature of entertainment though it is for the purpose of trade, attracting section 37(2) or (2B) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (2B), i. e., notwithstanding that the expenditure is business expenditure, at once catches it and despite the applicability of section 37(1), it would be operated within the parameters of sub-sections (2), (2A) and (2B) and it would be slashed down as per the slab rates prescribed either under sub-section (2) or (2A) depending on your gains or profits during the accounting year. So beware that all entertainment expenditure laid out or expended would not be allowed. You are forewarned that the exchequer would not defray it. Oh you-the Income-tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal eschew adoption of lexicographic consideration and doctrinaire approach but be pragmatic to adopt work-a-day rule, lift the veil encircling the transaction in question, find the primary motive behind laying out or expending entertainment expenditure and put a question to yourself whether it is wholly and exclusively necessary for the purpose of the business or profession and then arrive at the substance of the transaction." Therefore, the tax authority or the Appellate Assistant Commissioner or the Tribunal has to narrowly scrutinise the accounts in each case, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g ostentation, with the belief that the public exchequer would defray the wasteful expenditure. If this consideration is allowed to prevail, sub-sections (2), (2A) and (2B) of section 37 would be rendered otiose and ineffectual, defeating the legislative animation. Therefore, the fact-finding authorities have to carefully scrutinise the record with circumspection and give the necessary allowance as per law. With regard to question No. (4), it is conceded by the Revenue that it was covered by a decision of this court that the amount of Rs. 893 made for subscriptions to the club for entertainment of the foreign business delegation is allowable. Accordingly, it is answered in favour of the assessee. With regard to question No. (6), the contention of Sri Moorthy is that no part of the expenditure is allowable, as it is not covered by section 35B(1)(b)(ii), (vi) or (vii) of the Act. He argues that the claim was not laid before the Income-tax Officer ; for the first time, it was made before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner is unjustified in coming to the conclusion that the expenditure claimed qualifies for weighted deduction under the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question No. (6). Rs. 1,40,965.01 was expended for obtaining agmark from the Indian Standards Institution. We did not find any averment either in the order of the Appellate Assistant Commissioner or the Tribunal or the statement of the case that the agmark is wholly and exclusively necessary for the purpose of submitting technical information to the foreign buyers for the promotion of the sale of goods (tobacco) of the company. It is also not the case that the certification by the Indian Standards Institution as an agmark is a condition precedent to export of tobacco or a term of the contract. The decision in Union Carbide's case [1987] 165 ITR 558 (Cal) is of little assistance to the company. Therein, the facts were that obtaining a certificate from the export agency is necessary. Therefore, inspection has got to be made by the certifying officer regarding the quality of the goods. It was contended that it was technical information on the quality of the products for export. Therefore, weighted deduction has to be granted. But in this case, as stated earlier, it is not the case of the company nor any material has been placed nor a finding was recorded either by the Appellate Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould however, like to make few observations. As regards the sum of Rs. 893 which is the subject-matter of consideration in question No. (4), learned standing counsel for the Revenue fairly conceded that it is allowable as expenditure, as the sum in question represented subscription paid to the clubs for membership and not for entertainment. The amount paid, therefore, qualifies for deduction as business expenditure under section 37(1). There can he no doubt that the sum of Rs. 22,722 claimed by way of entertainment expenditure, which is the subject-matter of consideration in question No. (5), should be allowed as the facts would indicate that this expenditure was incurred for providing coffee, tea and snacks to customers visiting the business premises of the assessee. The expenditure is clearly allowable as business expenditure under section 317(1) of the Act in terms of the decision of this court in Addl. CIT v. Maddi Venkataratnam and Co. Ltd. [1979] 119 ITR 514. Questions Nos. (1), (2) and (3) go together. The sum of Rs. 17,056 specified in question No. (1) is claimed to have been spent on entertaining a foreign delegation. The sum of Rs. 2,668 referred to in question No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent." The aforesaid decisions were within the knowledge of the assessee as well as the Tribunal, when the appeals were heard and disposed of on January 30, 1979. Yet, no effort was made by the assessee to furnish the full details of the expenditure and establish its case before the Tribunal that, in the light of the aforesaid tests enunciated, the expenditure qualifies for deduction as business expenditure and could not be treated as expenditure in the nature of entertainment expenditure; nor did the Tribunal make any endeavour to examine the details of the expenditure and record any specific finding whether the expenditure fulfilled the tests laid down by this court. The argument of the assessee regarding the nature of expenditure as well as the conclusions of the Tribunal in regard to the same proceeded on vague and uncertain considerations. In view of the decision of this court in Maddi Vewkataratnam's case [1979] 119 ITR 514, following the tests laid down in Patel Brothers'case [1977] 106 ITR 424 (Guj), the Tribunal should have specifically addressed itself to the question whether the expenditure incurred partook of the nature of entertainment expenditure or not if, on scruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to claim weighted deduction in respect of expenditure of Rs. 1,09,587 pursuant to the decision of this court in the assessee's own case in RC No. 108 of 1982 dated November 5, 1986 (CIT v. Navabharat Enterprises (P.) Ltd. (No. 1) [1988] 170 ITR 326). In view of the above representation made by learned standing counsel, the assessee's claim for weighted deduction in respect of the expenditure of Rs. 1,09,587 is in order and is rightly allowed. As regards the expenditure of Rs. 1,49,965 on " Agmark charges" (paid to the Indian Standards Institution for certifying quality) and the sum of Rs. 2,14,860 incurred by way of export licence fee and inspection charges, it must be pointed out that there are absolutely no details in respect of these items of expenditure to support the assessee's claim for weighted deduction. No materials are placed before this court regarding the nexus between the expenditure incurred and the export promotion or development for purposes of section 35B. The Tribunal's order does not contain any useful discussion on this matter. All that the Tribunal did was to refer to the order of the Appellate Assistant Commissioner and to record the abrupt conclusion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal, unless for the purpose of reference to this court a specific question is sought for by the applicant, the Revenue in this case. According to learned counsel, if a specific question is not sought for reference challenging the finding of fact, then , this court is helpless in setting right an erroneous finding of fact recorded by the Tribunal. Learned counsel urged that in holding that the expenditure fell within the terms of sub-clauses (ii), (vi) and (vii), the Tribunal must be held to have looked into the nature of the expenditure and satisfied itself that the expenditure was incurred for export promotion. Learned counsel, therefore, urged that this court shall not look into the matter further. It is not possible to accept the submission of learned counsel. It is quite clear from the order of the Tribunal that the nature of the expenditure and the purpose for which the expenditure was incurred were not gone into. Without knowing the nature of expenditure, it was inconceivable how the Tribunal has come to the conclusion that the expenditure was incurred for export development. A finding of fact can be regarded as such if the Tribunal refers to the relevant facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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