Amritsar Transport Co. P. Ltd. vs Commissioner of Income Tax

S.S. Sodhi, J.—The matter here pertains to the assessment years 1972-73 and 1973-74.

The questions of law referred for the opinion of this court are as under :

"(1) Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that the remuneration paid to Shri Jagmohan Mehra and Shri Manmohan Mehra was unreasonable within the meaning of Section 40C of the Income Tax Act, 1961, is based on any material ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in disallowing any part of the salary paid to Shri Jagmohan Mehra and Shri Manmohan Mehra during the assessment years 1972-73 and 1973-74 ?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sums of Rs. 3,779 and Rs. 18,819 being expenditure incurred by the assessee-company by way of serving tea, coffee and coca cola, etc., during the assessment years 1972-73 and 1973-74, respectively, to the customers during the course of business is covered under the definition of "entertainment" and hit by the provisions of Section 37(2A) of the Income Tax Act, 1961 ?"

Similar questions arising between the same parties for the assessment year 1970-71 had earlier been referred to this court, which were answered by this court in Amritsar Transport Co. P. Ltd. Vs. Commissioner of Income Tax, . This decision clearly covers the present case too and, consequently, the questions referred are answered in the same manner, that is, in the affirmative, in favour of the Revenue and against the assessee.