Vineet Talkies vs Commissioner of Income Tax

J.S. Verma, Actg. C.J.

In accordance with the direction of this court u/s 256(2) of the Income Tax Act, 1961, the Tribunal has stated the case and referred to this court for its decision, the following question of law, viz. :

" Whether, on the facts and circumstances of the case, there was justification in law to disallow the amount of Rs. 2,000 as entertainment expenses ? "

The relevant assessment year is 1972-73. The assessee owns a cinema theatre and earns income out of the same. One of the items claimed as deduction on account of expenses was Rs. 2,000 out of the total miscellaneous expenses claimed at Rs. 12,298. This amount of Rs. 2,000 claimed to have been spent in extending ordinary courtesies of the business was disallowed as a deduction at the time of assessment by the Income Tax Officer. The Appellate Assistant Commissioner affirmed that conclusion. Before the Tribunal in further appeal by the assessee, no challenge was made to the finding disallowing the deduction of Rs. 2,000. Thereafter, an application was made u/s 256(1) of the Act by the assessee to refer the above question of law to this court for its decision. That application was rejected apparently on the ground that the claim for the deduction had been expressly given up by the assessee before the Tribunal. Subsequently, on an application made u/s 256(2) of the Act, a direction was given by this court to refer the above question of law and this reference has been made accordingly.

In our opinion, it cannot be doubted that the above question of law does not arise out of the Tribunal''s order in the present case for decision by us. It has been expressly stated not only in the statement of case but also in the Tribunal''s order that the assessee gave up its claim for deduction of Rs. 2,000 as entertainment expenses on account of which the same was not required to be decided by the Tribunal. This being so, the question does not arise for decision and it is not necessary to answer the same.

Consequently, the reference is answered by saying that the above question of law does not arise out of the Tribunal''s order for decision of this court and, therefore, it need not be decided. There shall be no order as to costs.