9911796707
TMI Blog1989 (12) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ated to have been spent through the cook and the details were not available. The learned counsel for the assessee contended that the head office of the company is situated atDelhiand the employees were attending to the business of the company at various places and were staying in the guest house of the company. It was, accordingly, contended that the food, snacks provided to the employees of the company while on duty cannot be considered to be an entertainment expenditure and accordingly, there was no justification for disallowance of Rs. 42,044. 2. We have given our careful consideration to the issue involved in this case. The main ground for rejecting the claim of the assessee is that day today details of the expenditure were not mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not taken before the assessing officer. The learned counsel further contended that the CIT(A) was not justified in not entertaining the objection of the assessee-appellant. 4. The learned Departmental Representative Miss Krishna Sahai contended that since the objection was not raised before the assessing officer, the IAC could not have entertained the objections filed before him. She accordingly, supported the orders of the CIT(A) and that of the assessing officer. 5. We have given our careful consideration to the issue involved in this case. We cannot resist to point out that the IAC grossly erred in not entertaining the objections of the assessee during the course of proceedings under s. 144B. Under s. 144B, the assessing officer is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. We have also heard the Senior learned Departmental Representative Miss Krishna Sahai and accordingly dispose of the grounds of appeal on merits. 6. The first objection related to disallowance of Rs. 11,370, being the interest paid to directors of the company and disallowed under s. 43A(8) of the Act. The assessing officer disallowed sum of Rs. 96,489 on account of interest under s. 49A(8) being interest on borrowed funds. The learned counsel pointed out that the disallowance was warranted on the basis of the Special Bench decision of the Tribunal in the case of KALOOMAL SHORIMAL SACHDEV RANGWALIA (P) LTD. vs. ITO reported in (1985) 23 TTJ (Bom) 132 (SB) : (1985) 14 ITD 248 (Bom) (SB). However, the learned counsel contended that the Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customers and employees at the reception of Governor s visit at assessee s factory does not constitute entertainment. In view of the amendment of s. 37 with retrospective effect, providing tea, coffee, etc., to the customers amount to entertainment and therefore any decision based on pre-amended Act is not applicable to the facts of this case. However, since providing tea, coffee, etc., to the employees is specifically excluded from the definition of the entertainment, we consider it reasonable that 1/3rd expenses may be considered in connection with providing tea, coffee, etc., to the staff, and accordingly allowable. The assessee will get a relief of Rs. 1,745. 9. The next claim of the assessee was with regard to the disallowance of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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