Commissioner of Income Tax vs Madho Lal Su Lal

The Income Tax Appellate Tribunal, Delhi Bench, has stated the following question u/s 256(2) of the Income Tax Act, 1961 :

"Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the rasoi expenses of Rs. 14,227 incurred on the assessee''s customers could not be disallowed as entertainment expenditure within the meaning of Section 37(2B) of the Income Tax Act, 1961 ?"

This question is concluded against the assessee by a Full Bench decision of this court in Phool Chand Gajanand Vs. The Commissioner of Income Tax, .

Mr. Jain, however, submits that a part of the rasoi expenses was incurred on providing meals, etc., to the employees and that would be deductible expenditure. We do not, however, find any such plea having been put forward by the assessee before any of the three authorities under the Act.

Mr. Jain argues further that the Tribunal in this case has merely followed the previous year''s order and, therefore, what was good for the previous year, must equally hold good for this year. We called upon learned counsel to show whether such a plea was raised at least before the Income Tax Officer. He could not.

Following the above decision, the question referred is answered in the negative, that is, in favour of the Revenue and against the assessee.

There shall be no order as to costs.