1995 (5) TMI 6

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....deleting the disallowance of Rs. 10,220 under the kitchen expenses by observing that the provision of meals to the beoparies by the assessee cannot be termed as entertainment expenditure ? " The assessee is a registered firm carrying on solely the business of acting as a commission agent in pulses. The total amount of commission received by the assessee was Rs. 1,14,221. The claim of the assessee was that under the condition of its trade it had to run a sort of kitchen to provide meals for the various beoparies who come to it from various places as of business necessity and a trade custom. In maintaining such a kitchen an expenditure of Rs. 10,220 was incurred which the assessee claimed as a deduction in computing its income. The Income-....

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....tion 37(2A) of the Act. That Explanation reads as follows : "For the removal of doubts, it is hereby declared that for the purposes of this sub-section and sub-section (2B), as it stood before the 1st day of April, 1977, ' entertainment expenditure ' includes expenditure on provision of hospitality of every kind by the assessee to any person, whether by way of provision of food or beverages or any other manner whatsoever and whether or not such provision is made by reason of any express or implied contract or custom or usage of trade, but does not include expenditure on food or beverages provided by the assessee to his employees in office, factory or other place of their work." The aforesaid amendment was made by the Finance Act, 1983....