TaxTMI 
TaxTMI 
2010 (3) TMI 299
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....led out for hearing. The office objections are waived. 2. In this appeal by the Revenue under Section 260A of the Income Tax Act, 1961 eight questions of law have been formulated, these being as follows: "A. Whether in the facts and circumstances of the case and in law the ITAT was right in upholding deletion of the disallowance / addition of Rs.6,86.186/under Rule 6B r/w sec.37(1), in respect of expenditure on gift & presentation articles; B. Whether in the facts and circumstances of the case and in law the ITAT was right in upholding the deletion of the disallowance / addition of Rs.3,56,541/being 25% of total entertainment expenditure of Rs. 14,26.165/, incurred on Hotels in entertaining visitors accepting the assessee's claim f....
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....l over charges/expenditure paid to banks in respect of repayment of principal amount of foreign exchange loans taken for capital investments; H. Whether in the facts and circumstances of the case and in law the ITAT was right in deleting the disallowance of deduction for and addition back of Rs. 18,08,295/, being unclaimed credit balances unilaterally written back (credited to Profit & Loss Account);" 3. The appeal in this case arises out of a common order passed by the Income Tax Appellate Tribunal for Assessment Years 1991-92 and 1992-93. 4. Each of the questions as formulated can be taken up for discussion separately. Question G is taken up initially since for the reasons indicated hereafter, the appeal would have to be admitted....
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.... favour of the assessee for Assessment Year 1990-91. In these circumstances, question A does not raise any substantial question of law. Requestions B and E: 7. The CIT (A) held that 25% of the expenses incurred in hotels on entertainment is a reasonable percentage which could be considered to be pertaining to the employees of the assessee company. The Tribunal noted that this was the consistent view taken by the Tribunal itself and in view thereof found no reason to interfere with the order of the CIT (A). 8. Sub section 2A of Section 37 provides inter alia that no allowance shall be made in respect of so much of the expenditure in the nature of the entertainment expenditure incurred by any assessee during any previous year expirin....
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.... expertise for sales promotion was regarded as a seminar held at work. 10. In the present case, the contention of the Revenue was that the entire expenditure that was incurred represented entertainment expenditure and hence had to be disallowed. The Tribunal has restricted the disallowance to 75% of the expenditure incurred by the assessee treating the balance of 25% as a reasonable estimate of what was incurred by the assessee for its own business. As a matter of principle no fault can be found with the order of the Tribunal in view of the fact that Explanation 2 to Section 37 specifically excludes expenditure on food or beverages provided by the assessee to employees inter alia at an office, factory or other place of work. The expendit....
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....sment Year 1987-88 the assessee stated that a note had been furnished to the Assessing Officer pertaining to this claim. The Tribunal had remitted the issue to the Assessing Officer for fresh consideration. In his order dated 29th January, 2004 the Assessing Officer allowed the claim of the assessee. In view of the factual background which has been noted earlier, a finding of fact has been recorded for Assessment Year 1988-89 which has now attained finality. In that view of the matter, we do not consider that this issue would raise any substantial question of law. Requestion H: 14. The appeal would have to be admitted on the question of law framed by the Revenue under this head. The appeal is admitted on this question alone. 15. Th....
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....r from enforcing the debt, has been well settled. If that principle were to be applied, a mere entry in the books of account made unilaterally without any act on the part of the creditor was held not to entitle the debtor to say that the liability has been extinguished. In the circumstances, Section 41(1) was held not to be attracted. 16. Counsel appearing on behalf of the Revenue has sought to place reliance on an earlier judgment of the Supreme Court in CIT v. T.V. Sundaram Iyengar & Sons Ltd. {(1996) 88 Taxman 429 (SC)}. The decision in Sundaram Iyengar's case is distinguishable. In that case, monies were received by the assessee in the course of carrying on its business. Although the receipt of these monies was treated as a deposit a....