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TMI Blog2002 (7) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... tax cases, as the questions are common and can be conveniently disposed of. The questions which are referred to us at the instance of the assessee are as under: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that a sum of Rs. 1,15,514, Rs. 6,19,944 and Rs. 2,54,212 for the assessment years 1979-80, 1981-82 and 1982-83, debited by the assessee under the head 'Business promotion expenses' expended to run the business smoothly and profitably by way of secret commission payments and other unvouched non-descript payments, such as tips/mamools/speed money, was not a deductible business expenditure under section 37(1) of the Act in computing the business income of the assessee? 2. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in the entertainment expenditure claimed as deduction? 2. Whether, the Appellate Tribunal's order allowing deduction on ad hoc estimate basis which is not in accordance with the provisions of section 37(2A) is reasonable and sustainable in law?" The following facts will highlight the controversy involved. The assessee is in the business of canvassing/contract agents for M/s. G.A. Vasanth Exchange. They claimed certain expenditure in the nature of sales promotion expenditure. They claimed various sums in the three assessment years with which we are concerned. The assessment years are 1979-80, 1981-82 and 1982-83. The assessee claimed pretty huge sums in the name of expenditure made for their sales promotion and claimed deduction on tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made for some parties by making payments to various hotels, could be treated only as entertainment expenditure, which would be well covered within section 37(2A). The Tribunal was also right in rejecting the other expenditure, which was claimed to have been made by way of bribes, etc. The questions, therefore, are answered against the assessee and in favour of the Revenue. In so far as the questions referred at the instance of the Revenue are concerned, learned standing counsel tried to urge that the Tribunal had arbitrarily granted some expenditure without reference to the actual entries in the account books. We do not think such argument is possible because the Tribunal has granted the expenditure well within the limits prescribed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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