2003 (3) TMI 67

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....ISHNA J.-At the instance of the Revenue, the following question of law has been referred to this court for its opinion under section 256(1) of the Income-tax Act, 1961: "Whether, on the facts and in the circumstances of the case, the learned Tribunal was legally correct in holding that incurring expenses on boarding and lodging facilities given to auditors and Government and semi-Government ser....

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....of the expenses incurred towards auditors' boarding and lodging. At the instance of the Revenue the above question has been referred to this court for its opinion. The question itself suggests that the said expenditures/expenses were incurred by the assessee for boarding and lodging facilities given to the auditors and semi-Government servants visiting the assessee factory. Section 37(1) of the In....

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....eeds the aggregate amount computed as hereunder:.... (2A) Notwithstanding anything contained in sub-section (1) or subsection (2), no allowance shall be made in respect of so much of the expenditure in the nature of entertainment expenditure incurred by any assessee during any previous year which expires after the 30th day of September, 1967, as is in excess of the aggregate amount computed as ....

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.... the nature of entertainment expenditure incurred within India by any assessee after the 28th day of February, 1970." From a reading of the aforesaid Explanation it is clear that if the expenditure is incurred by the assessee by way of provision of food or beverages, whether or not such provision is made by the reason of any express or implied contract or custom or usage of trade to any other p....