TaxTMI 
TaxTMI 
2002 (10) TMI 11
X X X X Extracts X X X X
X X X X Extracts X X X X
...., on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 1,94,775 by holding that it is not entertainment expenditure despite the fact that in that event the expenditure would have to be treated as that on 'advertisement' and 'publicity' and hence disallowable under rule 6B of the Income-tax Rules, 1962?" RA No. 93/JP of 1998: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 1,85,472 by holding that giving of gifts and presents does not amount to hospitality and cannot be considered for disallowance of entertainment expenditure; and 2. Whether, on the facts and in the circumstances of the case, the Tribunal was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....als), the Commissioner of Income-tax (Appeals) following the decisions of this court in the cases of CIT v. Green Roadways [1985] 154 ITR 639 and CIT v. Yadav Transport Service [1987] 167 ITR 474, confirmed the view taken by the Assessing Officer. In appeal before the Tribunal, the Tribunal following its earlier order deleted the additions so made. Heard learned counsel for the parties. Mr. Singhi, learned counsel for the Department, has submitted that when the word used in the Explanation entertainment expenditure, includes "hospitality of any kind", such as presents/gifts in this case and the Income-tax Officer has rightly disallowed the expenses incurred on distribution of presents and gifts to various persons. He placed reliance on t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rson. Even if gifts and presents are based on contract or custom or usage of trade, that can be treated as entertainment expenditure for the purpose of sub-section (2A) of section 37 of the Act. In the case of CIT v. Green Roadways [1985] 154 ITR 639, this court has considered the aforesaid Explanation 2 to sub-section (2A) of section 37, whether providing tea, coffee, soft drinks, etc., to customers is entertainment expenditure. The court answered the question in favour of the Revenue holding that it is entertainment expenditure within the meaning of section 37(2A) of the Act. The same view has been taken by this court in the case of Modern Threads (India) Ltd. v. CIT [2002] 258 ITR 511 (D.B.I.T. Reference No.2 of 1993 decided on March 6,....