TMI Blog1983 (10) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... f its distributors and stockists and incurred an expenditure of Rs. 87,625. The ITO made a disallowance of Rs. 10,000 on ad hoc basis. According to the ITO an amount of Rs. 10,000 must have been spent on entertainment. The CIT (A) has deleted this disallowance. He has observed that the conference had been held with a view to acquainting the stockists and distributors about the products marketed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e includes expenditure on provision of hospitality of every kind by the assessee to any person whether by way of provision of food or beverages or in any other manner whatsoever and whether or not such provision is made by reason of any express or implied contract or custom or usage of trading. Since this explanation has been inserted with retrospective effect from 1st April, 1976, it would be app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee. The contention of the assessee was that the statement filed before the ITO was in accordance with the provisions of r. 6D and that the details that were demanded had been duly submitted and as such the addition of Rs. 10,000 was not justified. The CIT (A) has observed that the ITO had not pointed out any mistakes which the assessee is alleged to have made in the alleged computa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the departments is that the said expenditure was not allowable as business expenditure as there was no nexus between said expenditure and business of the assessee 11. It is well known that membership of certain clubs is useful in establishing business connections. The amount involved is very small. The CIT (A) has examined this aspect and has expressed the opinion that the expenditure has be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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