Court rules Rasoi expenses not entertainment under Income-tax Act

The High Court of Allahabad ruled in favor of the assessee, holding that Rasoi expenses were not to be treated as entertainment expenditure under section 37(2B) of the Income-tax Act, 1961. The court emphasized that ordinary hospitality does not constitute entertainment, citing a previous Supreme Court decision. The case was remanded back to the Appellate Tribunal for further proceedings.

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The High Court of Allahabad ruled in favor of the assessee regarding the disallowance of Rasoi expenses as entertainment expenditure under section 37(2B) of the Income-tax Act, 1961. The court held that ordinary hospitality does not amount to entertainment based on a previous Supreme Court decision. The case record was sent back to the Appellate Tribunal for further action. (Case citation: 1996 (1) TMI 76 - ALLAHABAD High Court)

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