1996 (3) TMI 18 - HC - Income Tax

Summary

The High Court of Madras ruled that the expenditure incurred towards the supply of soft drinks to customers cannot be treated as entertainment expenditure and disallowed under section 37(2A) of the Income-tax Act, 1961. The Tribunal's decision was overturned in favor of the Department, citing a retrospective amendment introduced by the Finance Act, 1983. The court held that the expenditure was not for entertainment of employees and therefore cannot be allowed as a deduction.