Gangeshwar Ltd. vs Commissioner of Income Tax

In this reference u/s 256(1) of the Income Tax Act, 1961, the following two questions of law have been referred for our opinion:

(1) Whether on the facts and in the circumstances of the case, the assessed was entitled to the deduction of Rs. 27,672 on account of entertainment expenditure in view of Explanation 2 inserted to Section 37(2A) of the Income Tax Act, 1961 with effect from 1-4-1976?

(2) Whether on the facts and in the circumstances of the case, the assessed is entitled to weighted deduction in respect of road repairs directly incurred for roads totalling Rs. 1,91,707 and/or expenses for roads through agents of Rs. 1,50,000 and Cane Dev. Expenses of Rs. 2,614 u/s 35C of the Income Tax Act, 1961, read with rule 6A of the Income Tax Rules, 1962?''

The admitted position is that both the issues are covered in favor of the revenue and against the assessed. The first issue is covered by the decision of Supreme Court in CIT v. Patel Bros. & Co. Ltd. : [1995]215ITR165(SC) and the second issue is covered by the decision of this Court in Gangeshwar Ltd. Vs. Commissioner of Income Tax, .

Under the circumstances, we answer the reference in the affirmative, in favor of the revenue and against the assessed. The reference is disposed of accordingly.