1976 (11) TMI 73

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....ustomers and employees at Ahmedabad. It had also incurred expenses of Rs. 12,816 in providing tea etc. to its customers and employees at its Bombay Branch. The Income-tax Officer disallowed the assessee's claim for deduction of the said expenses as business expenses on the ground that they were entertainment expenses. In the appeal preferred by the assessee the learned appellate Assistant commissi....

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....red to be entertainment expenses. It was observed that provisions for tea, etc. made by the assessee was not on lavish or extravagant scale nor was it of wasteful nature. It was on account of long standing practice or custom of the business that the assessee had provided tea etc. To its employees. Therefore following the decision of the High Court of Gujarat in Commissioner of Income-tax vs. M/s. ....

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...., and following the principles laid down by the High Court, of Gujarat in the aforesaid decision held that the expenses in question were not entertainment expenses in question were not entertainment expenses within the meaning of S. 37 (2B) of the Income-tax Act, 1961. Now as compared to the magnitude of the assessee's business, and the income assessed, the expenses in question cannot be said to b....