- (1.) Ground of appeal No. 1 in this appeal filed by the assessee is directed against the disallowance of a sum of Rs. 1 lakh sustained by the ld. Commissioner (Appeals) on the ground of beverages etc. provided to the visitors. The facts of the case, in brief, are that as per Tax Audit Report the total amount of expenditure on entertainment was estimated at Rs. 10,83,749. The assessing officer found that this did not include payment of Rs. 1,03,650 made to the clubs. Further. the assessing officer found that the auditors had pointed out that the amount of entertainment expenditure did not include expenditure on tea, coffee etc. to visitors at the office/factory premises of the assessec-company because the same was not ascertainable. The assessing officer requested the assesseecompany to furnish details of such expenses. The assessee-company, however, did not file the details but made an estimate of Rs. 19,687 in this behalf. In these circumstances, the Id. assessing officer estimated the expenditure on tea, coffee etc. to the visitors and estimated the same at Rs. 5 lakhs. The total disallowance on account of entertainment expenses was, therefore, made for Rs. 16,87,399.
(2.) Aggrieved by the assessment order, the assessee filed appeal before the Id. Commissioner (Appeals)-Xl, Calcutta. The Id. Commissioner (Appeals) held that the amount of Rs. 19,687 estimated by the assessee-company was on the lower side. At the same time, the assessing officer had also not explained the basis of the figure of Rs. 5 lakhs. He, therefore, reduced the disallowance made by the assessing officer in his behalf to Rs. 1 lakh from Rs. 5 lakhs.
(3.) During the course of hearing before us the Id. counsel for the assessee pointed out that a similar matter came to be heard by the ITAT, C-Bench, Calcutta in the case of the assessee for the assessment year 1987-88 and by its order dated 28th August, 1997 in ITA No. 2709 (Cal.) of 92 the ITAT reduced the disallowance to a sum of Rs. 30,000 from Rs. 50,000 estimated by the 1d. Commissioner (Appeals).;