TMI Blog1976 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Officer assessed the firm on a total income of Rs. 4,42,893 as against the returned income of Rs. 3,69,316. The assessee had claimed an allowance of Rs. 28,342 on account of expenditure incurred for maintaining a kitchen each at Abohar, Hissar and Malaut for serving meals to the constituents. The Income-tax Officer, acting under section 37(2A) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), divided the period covered by the relevant previous year in two parts and allowed Rs. 4,071 for the period from May 22, 1967, to September 30, 1967, and Rs. 1,662 for the period from October 1, 1967, to May 28, 1968. In all, an allowance of Rs. 5,733 was made and the balance amount of Rs. 22,609 was disallowed. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstituents ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the receipts of Rs. 22,518 and Rs. 15,545 on account of Gaushala and Dharmada, respectively, did not constitute in the hands of the assessee income within the meaning of section 2(24) of the Income-tax Act ? " Section 37 of the Act lays down that certain types of expenditure incurred in connection with business or profession would be allowed in computing the income chargeable under the head " profits and gains of business or profession ". Sub-section (2A) of this section allows an assessee to incur expenditure for entertainments proportionate to his income and its material portion reads as under : " Notwithstanding anyth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning to " include the act of entertaining ; the receiving and accommodating of guests, food, lodging, or other things required by a guest ; a hospitable repast ; the pleasure which the mind receives from anything interesting and which holds or arrests the attention ; that which entertains ; that which serves for amusement, as a dramatic or other performance ; reception ; admission. " Even if it is regarded that according to the strict dictionary meaning of the word " entertainment ", the kitchen expenses incurred by the assessee do not fall within the meaning of the words " entertainment expenditure ", the expenses incurred are certainly " in the nature of entertainment expenditure ". An argument is raised on behalf of the assessee-firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided that case, I would like to observe that they have not attached due weight to the words " in the nature of " appearing before the words " entertainment expenditure " and the view taken by them cannot be regarded as good law. For the reasons aforementioned, I would answer the first question in favour of the revenne and against the assessee. Regarding Gaushala and Dharmada receipts of the assessee-firm, it may be said that this amount under custom had to be spent on charities. The assessee was acting merely as a trustee and in fact did spend bulk of the amount during the assessment year for the purpose for which it was received. In Thakur Das Shyam Sunder v. Additional Commissioner of Income-tax [1974] 93 ITR 27 (All) [FB], it was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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