1998 (4) TMI 101

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....ld not be disallowed under section 37(2B) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the assessee was entitled to deduction in respect of service fees paid for trade mark 'Tebilized' ?" The matter relates to the assessment year 1977-78. In the relevant previous year, the assessee claimed deduction of Rs. 9,675 as expenditure incurred on refreshment, etc., which was disallowed by the Income-tax Officer. The Commissioner of Income-tax (Appeals), however, allowed the same, which decision came to be confirmed by the Tribunal. The relevant previous year was 1976-77. Explanation 2 was inserted in section 37(2A) retrospectively wi....

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....etc., to its employees is concerned will have to be separately worked out from the total amount of deduction at Rs. 9,675 and the rest of the amount which is included in the definition of entertainment expenditure by way of Explanation 2 will have to be disallowed. In a similar context, this court in Saraspur Mills v. CIT [1997] 226 ITR 533, after referring to the decision of the Supreme Court in CIT v. Patel Brothers and Co. Ltd. [1995] 215 ITR 165, observed that so far as the entertainment expenditure is incurred for persons other than employees, the assessee was not entitled to deduction thereof. The matter was referred back to the Tribunal for deciding the same in accordance with law. We, accordingly, hold that the Tribunal was not righ....