Guest-house expenses disallowed, food/beverage=entertainment. 50% dealer conference allowed. Presentation articles=ad expense.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The expenses incurred towards municipal taxes, maintenance, and repairs of guest-house could not be allowed as a deduction, following the Supreme Court's decision in Britannia Industries Ltd. The expenditure on provision of food, beverages, and employee salaries for providing these at the rest/guest house was considered "entertainment expenditure" u/s 37(2A) and Explanation 2, and hence not deductible. However, 50% of the expenses incurred in organizing a conference for dealers were allowed as business expenditure. Expenses incurred in buying presentation articles were held as allowable deductions, being considered advertisement expenses.....