9911796707
TMI Blog1986 (6) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ome bad and that in any case since the amounts had not been written off as irrecoverable in the accounts of the assessee, the disallowance made by the ITO was justified and that the CIT(A) had no justification in deleting the disallowance. In support of her contentions reliance has been placed on the decisions reported in CIT vs. Khemchand Bahadurchand (1981) 25 CTR (P H) 359 : (1982) 134 ITR 65 (P H) and V.N. Rajan m Co. vs. CIT (1983) 142 ITR 545 (Cal). As the decision regards in the case of CIT vs. Jwala Prasad Tiwari (1953) 24 ITR 537 (Bom) on which reliance was placed by the CIT(A), the ld. Departmental Representatives submits that the decision was not applicable under the provisions of 1961 Act. As regards the reduction granted in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1953) 24 ITR 537 (Bom) and Vithal Das H. Bhoujibhai Bandanwala vs. CIT (1981) 21 CTR (Guj) 190 : (1981) 130 ITR 95 (Guj). As far as the finding of the CIT(A) regarding the 'Vyopari Expenses' is concerned, the ld. Authorised counsel of the assessee has supported the order of the authority of a decision of the Tribunal, Delhi Bench-A in ITA No. 3118/Del/82 decided on 7th Jan., 1984. It is the case of the assessee that the expenditure incurred by the assessee not only included the food and beverages provided to the employees but also included expenditure incurred on provision of human courtesy not amounting to hospitality. In support of the cross objection filed by the assessee, the ld. authorised counsel has submitted that the CIT(A) had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid that the two amounts had not become bad debts. As far as the compliance of the provisions of s. 36(2) of the Act is concerned, we would agree with the representation made on the side of the assessee that the entries made in the profit and loss account and in the suspense account amounted to writing off the debts as irrecoverable. The decisions of the Hon'ble Bombay and Gujarat High Courts respectively reported in (1953) 24 ITR 537 (Bom) and (1981) 130 ITR 95 (Guj) squarely support the case of the assessee. In the latter decision which is of the Hon'ble Gujarat High Court it has been held by their Lordships that the decision of the Hon'ble Bombay High Court in the case of CIT vs. Jwala Frasad Tewari (1953) (24 ITR 537 (Bom) would be equa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n furnished by the assessee before the ITO in support of its contention. On the contrary, the ITO found that expenditure by way of provision of food and beverages to the employees stood debited to another account named 'staff welfare'. In these circumstances no part of expenditure of Rs. 24,021 could be said to be related to employees. Besides, we are also unable to agree with the CIT(A) that the expenditure on extending of human courtesy would not amount to hospitality or entertainment. The language of the provision of Expln. 2 is comprehensive and it includes within its ambit all kinds of hospitality whether it is lavish or frugal or whether it is necessitated by any contract or usage of trade or is extended just by way of courtesy toward ..... X X X X Extracts X X X X X X X X Extracts X X X X
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