1997 (2) TMI 22 - HC - Income Tax

Summary

Issues: Jurisdiction of the Tribunal to admit additional ground for deduction of entertainment expenses and consideration of admissible entertainment expenditure under section 37(2B).

Jurisdiction to Admit Additional Ground: The High Court addressed the issue of whether the Tribunal had jurisdiction to allow the assessee to raise an additional ground regarding the claim for deduction of entertainment expenses. The assessee, a nationalized bank, had not initially raised this ground before the Appellate Assistant Commissioner or in the original grounds filed before the Tribunal. The Tribunal admitted the additional ground, considering it part of adjusting the tax liabilities of the assessee. The Court found that without any prior orders by the authorities on this issue, the Tribunal could not make a decision. Therefore, the matter was remitted back to the Income-tax Officer for fresh disposal. The Court cited the decision in Oil and Natural Gas Commission v. Collector of Central Excise as a basis for deferring the matter. The Court concluded that there was no error in the Tribunal's decision to remit the issue back for fresh disposal, answering question No. 1 in the affirmative.

Consideration of Admissible Entertainment Expenditure: The Court did not address question No. 2 regarding the consideration of admissible entertainment expenditure under section 37(2B) as the point raised in the question was remitted back for fresh disposal. The Court returned question No. 2 as it did not arise out of the Tribunal's order. The Court mentioned the decision in CIT v. Patel Brothers and Co. Ltd. regarding allowing expenditure under section 37(2B) as a relevant precedent. Overall, the Court's focus was on the jurisdictional aspect of admitting additional grounds for deduction of entertainment expenses, leading to the remittal of the issue for fresh disposal.