Customary hospitality is not entertainment expenditure when provided on a modest scale, leaving no referable question of law.

Customary hospitality in the form of tea, coffee and similar modest refreshments was treated as falling outside "entertainment expenditure" under the Income-tax Act. That position had already been affirmed by the Supreme Court in the connected matter, so the Tribunal's view raised no fresh legal controversy on the same point. As a result, no referable question of law arose for consideration, and the reference applications were rejected.

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Issues: Whether expenditure on tea, coffee and similar customary hospitality on a moderate scale constituted "entertainment expenditure" under section 37(2A) and section 37(2B) of the Income-tax Act, 1961, and whether any referable question of law arose for consideration under section 256(1) of the Income-tax Act, 1961.

Analysis: The expenditure in question had already been held to fall outside the expression "entertainment expenditure" where it represented customary hospitality provided on a modest scale. That view had been affirmed by the Supreme Court in the connected matter, leaving no room for a contrary legal issue on the same question.

Conclusion: No referable question of law arose from the Tribunal's order, and the reference applications were rejected.

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