BRIJ RAMAN DASS AND SONS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961.

(2.) THE assessee carries on business in Benarsi Goods in the name and style of Brij Raman Dass and Sons at Varanasi. THE reference relates to the assessment year 1969-70 with the previous year ending on 20th October, 1968. For the computation of its net income from business, the assessee claimed a deduction of shop expenses totalling Rs. 79,449. This amount included a sum of Rs. 13,653 being the expenditure incurred on providing tea, lassi, jalpan, etc., to the customers. THE Income-tax Officer allowed a sum of Rs. 5,000 only out of this expenditure in view of the. provisions of Section 37(2A) of the Act and disallowed the balance. THE assessment order was upheld on appeal by the Appellate Assistant Commissioner of Income-tax as also by the Income-tax Appellate Tribunal on second appeal. At the instance of the assessee the Tribunal has referred the following question of law for our opinion;

(3.) IT was then argued that the expenditure in question is not of the nature of entertainment expenditure. IT is urged that "entertainment" does not include the provision of refreshment, but is confined to amusement and "gratification of some sort other than food, meat and drink", Reliance was placed upon the meaning of the word "entertainment" as given in the Stroud's Judicial Dictionary (3rd edition, volume II, page 966). In the same book the word "entertainment" for purposes of Refreshment Houses Act, 1860, has been defined to mean a building kept open for public refreshment, resort, and entertainment. "Entertainment" as there used means "not diversion or amusement, but the provision of food, drink and whatever else might be reasonably required for the personal comfort of guests, for example, cigars, coffee, ginger-beer or lemonade,........" IT is clear, therefore, that the word "entertainment" has different meanings for purposes of different Acts. "An entertainment to come within the provisions of the C. P. and Berar Entertainment Duty Act, 1936, must be some exhibition, performance, amusement, game or sport for purposes of entertainment, i.e., for affording some sort of amusement and gratification to those who see or hear it": see Calico Mills Ltd. v. State of Madhya Pradesh. The same meaning probably will be attributable to the word "entertainment" for purposes of U.P. Entertainments and Betting Tax Act, 1937. But we are not dealing with any of those Acts where the word "entertainment" has been given a special meaning. What we have to see is as to what is the meaning of the word "entertainment" for purposes of Section 37{2A) of the Act. In the Income-tax Act, this word has not been defined and we will have to give it its general meaning. An "entertainment expenditure" would, in our opinion, include all expenditures incurred in connection with business on the entertainment of customer and constituents. The entertainment may consist of providing refreshments as in this case or it may consist of providing some other sort of entertainment.