Reference question on entertainment expenses failed where the claim had been abandoned before the Tribunal.

A question on disallowance of entertainment expenses was held not to arise out of the Tribunal's order because the assessee had expressly abandoned the deduction claim before the Tribunal, and the Tribunal's statement of case recorded that the issue did not require decision. As the matter was not part of the Tribunal's adjudication, it could not be referred as a question arising from its order under section 256 of the Income-tax Act, 1961, and the Court did not answer it.

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Issues: Whether the referred question regarding disallowance of entertainment expenses arose out of the Tribunal's order and was fit for decision by the Court.

Analysis: The assessee had expressly given up the claim for deduction of Rs. 2,000 before the Tribunal. The Tribunal's order and the statement of case recorded that the issue was not required to be decided by the Tribunal. In these circumstances, the question could not be treated as one arising out of the Tribunal's order for reference under section 256 of the Income-tax Act, 1961.

Conclusion: The question of law did not arise out of the Tribunal's order and was not answered.

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