TMI Blog1980 (9) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion : " Whether the Tribunal was justified in holding that the expenditure incurred by the assessee for providing messing to its trade constituents by way of ordinary courtesy did not amount to expenditure in the nature of entertainment expenditure as contemplated by section 37(2B) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the claim to Rs. 15,000. Aggrieved by the order passed by the AAC, the department preferred an appeal before the Tribunal. It was contended on behalf of the department that the expenditure in question was in the nature of entertainment expenditure as contemplated by s. 37(2B) of the Act. The Tribunal, however, rejected that contention and held that the expenditure incurred by a trader on messing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " in the context of s. 37(2B) of the Act on its true construction and meaning would include the acts or practice of receiving and entertaining the strangers and friends ; but if the acts or practice of being hospitable in the sense of providing meals, drinks or other wants of guests are a part and parcel of the express or implied terms and conditions of business, trade or profession or on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that has been laid down by the Gujarat High Court is consistent with the commercial practice and custom of the trade and is not shown to be contrary to the provisions of the Act. In our opinion, therefore, the answer to the question referred to us is in the affirmative and in favour of the assessee. Parties shall bear their own costs of this reference. - - TaxTMI - TMITax - Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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