S.C. Agrawal, J.
1. In this reference made by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, hereinafter referred to as the Tribunal, the following question has been referred for the opinion of this court:
' Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the messing expenses claimed by the assessee in supplying meals to the trade constituents are not in the nature of 'entertainment' within the meaning of Section 37(2B) of the Income-tax Act and are allowable as a deduction in computing the total income for the assessment year 1974-75 '
M/s. Meg Raj Sohan Lal, hereinafter referred to as the assessee, is a registered firm. It derives income from adat and sale of agricultural commodities. In respect of the assessment year 1974-75, the assessee claimed a sum of Rs. 6,500 as expenses incurred for providing meals to customers and constituents on the ground that the said expenditure was wholly laid out for the purpose of the business. The Income-tax Officer disallowed the said claim under Section 37(2B) of the Income-tax Act, 1961, hereinafter referred to as the Act, on theview that the said expenditure was of entertainment nature. The Appellate Assistant Commissioner held that the said expenses were not in the nature of entertainment and it accordingly deleted the addition made by the Income-tax Officer. The Tribunal affirmed the finding of the Appellate Assistant Commissioner and thereupon this reference was made at the instance of the Revenue.
2. We find that this case is fully covered by the decision of this court in Devichand Bastimal v. CIT . In that case also, the assessee was carrying on business of adat and sale of agricultural commodities and had claimed messing expenses and the question which was referred for the opinion of this court was whether the said expenses were in the nature of entertainment expenditure within the meaning of Section 37(2B) of the Act. This court has held that such expenses cannot be characterised as entertainment expenditure under Section 37(2B) of the Act.
3. In view of the aforesaid decision of this court, the question is answered in the affirmative, i.e., in favour of the assessee and against the Revenue. The parties are left to bear their own costs.
4. Let the answer be returned to the Tribunal as required under Section 260(1) of the Income-tax Act, 1961.