Tribunal upholds CIT(A)'s decision, restricts staff entertainment, denies excise duty liability.

The Tribunal upheld the CIT(A)'s decision, dismissing the appeal by the limited company. The Tribunal ruled in favor of restricting the expenditure on staff entertainment, disallowing part of the motor car running and maintenance expenses under sec. 37(3A) & (3D), and denying the excise duty liability under sec. 43B due to the provision of a bond not constituting actual payment as required by the law.

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Issues Involved:
1. Restriction of expenditure on staff entertainment
2. Consideration of motor car running and maintenance for disallowance u/s 37(3A) & (3D)
3. Non-allowance of excise duty liability provided under sec. 43B

Restriction of Expenditure on Staff Entertainment:
The assessee, a limited company, appealed against the CIT(A)'s order restricting the quantum of expenditure on staff entertainment. The appeal raised three grounds, including this issue.

Consideration of Motor Car Running and Maintenance under sec. 37(3A) & (3D):
The Tribunal considered the submission regarding the consideration of running and maintenance of cars under sec. 37(3A) & (3D). The counsel argued that sec. 37 does not override sec. 31, which allows deduction for such expenses. However, the Tribunal held that sec. 37(1) allows for consideration of expenses not covered in sections 30 to 36, and sec. 37(3A) overrides other sections, including sec. 31, necessitating the disallowance of part of the expenditure.

Non-Allowance of Excise Duty Liability under sec. 43B:
The last issue pertained to excise duty payable on manufacturing expenses, which was disputed by the assessee. The High Court had stayed the recovery of excise duty, requiring the assessee to provide a bond and bank guarantee. The assessee argued that these should be treated as paid within the year, citing Tribunal decisions. However, the Tribunal rejected this claim, stating that provision of a bond does not equate to actual payment as required by sec. 43B, leading to the dismissal of the appeal.

In conclusion, the Tribunal upheld the CIT(A)'s decision on the issues related to motor car expenses under sec. 37(3A) & (3D) and excise duty liability under sec. 43B, ultimately dismissing the appeal.

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