JUDGMENT B.P. Jeevan Reddy, C.J.
1. The question referred under Section 256(1) of the Income-tax Act, 1961, by the Tribunal reads thus :
"Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the expenditure incurred in providing food to the assessee's customers could not be disallowed as entertainment expenditure under Section 37(2B) of the Income-tax Act, 1961 ?"
It may be noticed that the question is confined to the expenditure incurred in providing food to the assessee's customers. The question does not pertain to the expenditure incurred in providing food or other items to the staff of the assessee. The question as referred is concluded against the assessee by a decision of this court in Phool Chand Gajanand v. CIT [1989] 177 ITR 265 [FB]. Following the said decision, the question referred is answered in the negative, i.e., in favour of the Revenue and against the assessee.
2. It is, however, made clear that if any amount is spent on providing food or other items to the members of the staff, that would be an admissible expenditure under Section 37 of the Act. If there is any such expenditure incurred on staff, the Tribunal may look into the matter and pass appropriate orders while passing final orders under Section 260 of the Act.