Delhi H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to the deduction under the head `Entertainment expenses’ though the same was hit by the provisions of s. 37(2A) ?

Counsel Appeared

P. N. Mishra & R. C. Pandey, for the Revenue : S. K. Aggarwal, for the Assessee.

B. N. KIRPAL, J.:

This is a petition under s. 256(2) of the IT Act, 1961, whereby the petitioner seeks a direction that the Tribunal should state the case and refer the following questions of law to this Court:

“(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to the deduction under the head `Entertainment expenses’ though the same was hit by the provisions of s. 37(2A) ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to the expenditure incurred by it under the head `Shree Ram Jayanti expenses’ though there was no nexus between the expenditure incurred and the business run by the assessee-company ?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to weighted deduction under s. 35B on the expenditure incurred by it under the heads `Customs duty’, clearing charges, bad debts, expenses incurred by foreign branches, etc. ?

(4) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to an amount of Rs. 4,361 incurred by the export division of the assessee under the head `Entertainment expenses’ ?

(5) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to the expenditure incurred by it under the head `Shree Ram Jayanti expenses’ though there was no nexus between the expenditure incurred and the business run by the assessee-company ?

(6) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled under the head `Meeting and conference expenses’ though the expenditure was clearly in the nature of entertainment and thus was in violation of the provisions of s. 37(2A) ?

(7) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to the expenses incurred for marblex flooring though this expenditure had resulted in enduring benefit to the assessee-company ?

(8) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to weighted deduction on expenses which were general in nature and thus not covered under any of the clauses of s. 35B?”

2. In our opinion, except two questions, the other questions are questions of fact. The two questions which alone should be referred to this Court by the Tribunal are :

“(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to the deduction under the head ‘Entertainment expenses’ of a sum of Rs. 28,734 ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to an amount of Rs. 4,361 by way of weighted deduction under s. 35B of the Act?”

3. We direct the Tribunal to state the case and refer the aforesaid two questions of law. The petition is disposed of. No order as to costs.

[Citation :182 ITR 453]