9911796707
TMI Blog1986 (4) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... 1977] under the head Sales promotion the ITO disallowed Rs. 78,918, being in his opinion in the nature of entertainment expenditure. On appeal, the assessee restricted the claim under that thread to Rs. 33,848. The Commissioner [appeals] held that out of the said amount of Rs. 33,848, Rs. 5,000 should be treated as entertainment expenses and the balance of Rs. 28,848 should be treated as sales pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entertainment of the tourists and, therefore, deduction of it should not have been allowed. We could not get advantage of hearing the assessee since none appeared for it. 4. In view of restriction placed by sub section (2A) of section 37 on allowability of the entire expenditure on entertainment, a simple plea that it was incurred wholly and exclusively for the purpose of the business cannot hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slation by inserting Explanation to sub-section (2A) of section 37 by the Finance Act, 1983 with retrospective effect from 1-4-1976 made it clear that 'entertainment expenditure' includes expenditure on provision of hospitality of every kind by the assessee to any person, whether by way of provision of food or beverages or in any other manner whatsoever and whether or not such provision is made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular occasion without charging extra money for that, irrespective of any express or implied contract or custom or usage of the trade. Will it be called an expenditure on entertainment ? Will it not be same as a dealer in car giving spare parts to a purchaser of a car, without charging extra money for those parts? It is, therefore, essential to examine whether the hospital extended partook the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich we do not find any basis. On the other hand, by doing so he has contradicted his own finding that the balance of Rs. 28,848 should be treated as sales promotion expenses. If the amount of Rs. 33,848 contained any element of entertainment there is no foundation for carving out Rs. 5,000 only as expenditure on entertainment. On that premises, the entire amount should have been taken as expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
