Following two questions are referred to this court, which arise out of the order of the Appellate Tribunal in ITA No.243(Ahd.)/78-79 decided on 30.10.79: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in deleting the entire interest addition of Rs.1,08,000/- paid by the assessee to the children of Raja Chandrachur Prasad Singh Deo ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal has been right in law in confirming the order of A.A.C. in deleting the addition of messing expenses amounting to Rs.3,33,450/- and tea - pan expenses amounting to Rs.1,84,055/-? "
So far as the first question is concerned, Revenue has withdrawn the same and this court (Coram: S.Nainar Sundram C.J. & R.K.Abichandani J.) has allowed to withdraw the same. However, by mistake, both the questions were withdrawn, though it was meant for withdrawal of question no.1 only. Thereafter, by the order in M.C.A. No.79/93, the position was clarified and question no.2 has now only revived. Question no.1, therefore, need not be answered.
Question no.2 is also now covered by the judgment of the Supreme Court in the case of Commissioner of Income tax vs. Patel Brothers and Co. Ltd. & Ors. reported in 215 ITR 165. There, the Supreme Court has held that "a bare necessity, like an ordinary meal, is essential and indispensable and, therefore, is not entertainment. Where such a bare necessity is offered, it is hospitality not entertainment. Unless the definition of entertainment includes hospitality, the ordinary meaning of "entertainment" cannot include hospitality". Revenue has disallowed the claim holding it to be an entertainment expenditure. However, the expenditure pertained to tea, pan and messing provided to its employees in discharge of their normal duties. Therefore, the question no.2 being covered under above Supreme Court judgment, the question no.2 is required to be answered in the affirmative in favour of the assessee. Reference accordingly stands disposed of. No order as to costs.
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