Light refreshments for customers are not entertainment expenditure and remain allowable business spending under section 37(2B).

Tea, cold drinks and similar light refreshments provided to customers in the course of banking business were treated as customary courtesy and not as entertainment expenditure. The Court followed its earlier decisions and held that such spending did not fall within section 37(2B) of the Income-tax Act, 1961, so the disallowance could not be sustained beyond the amount voluntarily added back by the assessee.

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Issues: Whether expenditure incurred on providing tea, cold drinks and similar light refreshments to customers constituted entertainment expenditure within the meaning of section 37(2B) of the Income-tax Act, 1961, or was allowable as business expenditure.

Analysis: The expenditure in question represented customary courtesy extended to customers in the course of banking business. The Court followed its earlier decisions and held that such light refreshments did not fall within the ambit of entertainment expenditure. The disallowance could not therefore be sustained beyond the amount voluntarily added back by the assessee.

Conclusion: The expenditure was not entertainment expenditure and was not disallowable under section 37(2B) of the Income-tax Act, 1961.

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