Commissioner of Income Tax Karnataka-I vs Mysore Paper Mills Ltd.

Govinda Bhat, C.J.—This is an application under s. 256(2) of the I.T. Act, 1961, made by the Commissioner of Income Tax, Karnataka-I, Bangalore, to direct the Tribunal to state a case and refer the question whether the Tribunal was right in law in holding that the expenditure of Rs. 6,588 incurred by the assesses company on catering and refreshments, etc., for its shareholders and guests at the general body meeting, did not constitute expenditure in the nature of entertainment and, therefore, the restrictions laid down under s. 37(2A) of the Act is not applicable to the said expenditure.

The Tribunal has come to the conclusion that expenditure incurred at the general body meeting cannot be regarded as entertainment expenditure. Entertainment presupposes a third party being entertainment by the assessee; one does not entertain himself. There cannot be any two views on this question and we do not consider that there is any referable question of law. Accordingly, this petition is dismissed.