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TMI Blog1985 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) of section 187 of the Income-tax Act? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the messing expenses were entertainment expenses and were, therefore, hit by the provisions of section 37(2B) of the Income-tax Act, 1961 ? " Brief facts of the case are that Smt. Ishwari Bai, one of the partners of the firm, M/s. Metharam Lekhumal, expired on August 5, 1971. The total income of the firm as per return filed on October 9, 1972, was Rs. 59,945. A mention was made in the return that the aforesaid income should be divided into two parts and should be assessed separately as under: (i) For the first four months up to the date of death of Smt. Ishwari Bai-Rs. 19,300. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sub-section (2) of section 187 of the Income-tax Act, 1961. The Tribunal further held that in view of the above circumstances, the assessment had to be made in accordance with sub-section (1) of section 187 of the Act and they did not find any reason to take a different view and, as such, dismissed the appeal. The assessee had also agitated before the Tribunal disallowance of Rs. 2,500 as messing expenses. According to the assessee, these expenses were incurred in providing food and refreshments, etc., to the customers of the assessee. In this regard, the Tribunal expressed the opinion that these expenses were in the nature of entertainment expenses and, as such, were hit by the provisions of section 37(2B) of the Act. The Tribunal, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the new firm. It was also contended that it was immaterial whether the business was taken over by the new firm as a running concern and no separate accounts were kept by the new firm. It was also submitted that the Tribunal was wrong in holding that the share of the partners in the new firm had not changed. As regards the second question of law mentioned above, Mr. Ranka placed reliance on CIT v. Patel Brothers Co. Ltd. [1977] 106 ITR 424 (Guj), CIT v. Shah Nanji Nagsi [1979] 116 ITR 292 (Bom), CIT v. Karuppuswamy Nadar Sons [1979] 120 ITR 140 (Mad), CIT v. Lakhmichand Muchhal [1982] 134 ITR 234 (MP), CIT v. Navalmal Punamchand [1982] 135 ITR 801 (MP), CIT v. Rajkumar Mills Ltd. [1982] 135 ITR 811 (MP) and Nava Bharat Enterprises (P.) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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