Commissioner Of Income Tax vs Regal Theatre
2000 Latest Caselaw 1235 Del

Citation : 2000 Latest Caselaw 1235 Del
Judgement Date : 6 December, 2000

Delhi High Court

Commissioner Of Income Tax vs Regal Theatre on 6 December, 2000

Equivalent citations: 2001 116 TAXMAN 831 Delhi

Author: A Pasayat

JUDGMENT

Arijit Pasayat, C.J.

At the instance of the revenue, the following question has been referred for opinion of this court under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) by the Tribunal, Delhi Bench-D :

"Whether, on the fact and in the circumstances of the case, the Tribunal was correct in law in holding that the amounts of Rs. 28,474 and Rs. 2,738 aggregating Rs. 31,212 did not represent the entertainment expenditure contemplated under section 37(2B) of the Income Tax Act, 1961 ?"

2. Factual position in a nutshell is as follows :

The assessee incurred an expenditure of Rs. 42,040 on different items for the assessment year 1974-75 for which the relevant previous year ended on 31-10-1973. The Income Tax Officer disallowed the entire amount holding it to be of entertainment nature. Disallowance was confirmed by the Appellate Assistant Commissioner. The assessee carried the matter in appeal before the Tribunal. The Tribunal was of the view that a sum of Rs. 5,859 incurred on the purchase of beer and wine and Rs. 4,979 incurred by the partners to meet their club bills were clearly disallowable. So far as the other items are concerned, they were held to be allowable and it was also held that provisions of section 37(2B) of the Act has no application to the case. On being moved for reference, the question as set out above has been referred for opinion of this court.

3. We have heard the learned counsels for the parties.

4. In view of the decision of the Apex Court in CIT v. Patel Bros. & Co. Ltd. (1995) 215 ITR 165 (SC), our answer to the question referred is in the affirmative, in favour of the assessee and against the revenue.