India - Income Tax Act 2010 - Saarc

1.249 CH. IV - COMPUTATION OF BUSINESS INCOME S. 37which is prohibited by law shall not be deemed to have been incurred for thepurpose of business or profession and no deduction or allowance shall be madein respect of such expenditure.](2) 74 [* * *]75[ 76 (2B) Notwithstanding anything contained in sub-section (1), no allowanceshall be made in respect of expenditure incurred by an assessee on advertisementin any souvenir, brochure, tract, pamphlet or the like published by apolitical party.](3) 77 [* * *]74. Omitted by the Finance Act, 1997, w.e.f. 1-4-1998. Omitted sub-section (2) was substitutedfor sub-sections (2) and (2A) by the Finance Act, 1992, w.e.f. 1-4-1993. Erstwhile subsections(2) and (2A) as amended by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962, theFinance Act, 1965, w.e.f. 1-4-1965, the Taxation Laws (Amendment) Act, 1967, w.e.f.1-10-1967, the Finance Act, 1968, w.e.f. 1-4-1968, the Finance Act, 1970, w.e.f. 1-4-1970, theFinance Act, 1976, w.e.f. 1-4-1977 and the Finance Act, 1983, w.r.e.f. 1-4-1976/w.e.f. 1-4-1984. Prior to its omission, sub-section (2), as substituted by the Finance Act, 1992, w.e.f.1-4-1993, and later on amended by the Finance Act, 1994, w.r.e.f. 1-4-1993, read as under :‘(2) Notwithstanding anything contained in sub-section (1), any expenditure in the natureof entertainment expenditure incurred by any assessee during any previous year commencingon or after the 1st day of April, 1992 shall be allowed as follows :(a) where the amount of such expenditure does not exceed ten thousand rupees, thewhole of such amount;(b) in any other case, ten thousand rupees as increased by a sum equal to fifty per centof such expenditure in excess of ten thousand rupees.Explanation.—For the purposes of this sub-section, “entertainment expenditure”includes—(i) the amount of any allowance in the nature of entertainment allowance paid by theassessee to any employee or other person;(ii) the amount of any expenditure in the nature of entertainment expenditure [notbeing expenditure incurred out of an allowance of the nature referred to in clause(i)] incurred for the purposes of the business or profession of the assessee by anyemployee or other person;(iii) expenditure on provision of hospitality of every kind by the assessee to any person,whether by way of provision of food or beverages or in any other mannerwhatsoever and whether or not such provision is made by reason of any express orimplied contract or custom or usage of trade, but does not include expenditure onfood or beverages provided by the assessee to his employees in office, factory orother place of their work.’75. Inserted by the Taxation Laws (Amendment) Act, 1978, w.e.f. 1-4-1979. Originally, the subsectionwas inserted by the Finance Act, 1970, w.e.f. 1-4-1970 which was later on omittedby the Finance Act, 1976, w.e.f. 1-4-1977.76. See Circular No. 203, dated 16-7-1976, Circular No. 200, dated 28-6-1976 and CircularNo. 19, dated 13-6-1969. For details, see Taxmann’s Direct Taxes Circulars.77. Omitted by the Finance Act, 1997, w.e.f. 1-4-1998. Prior to its omission, sub-section (3), asinserted by the Finance Act, 1964, w.e.f. 1-4-1964, read as under :“(3) Notwithstanding anything contained in sub-section (1), any expenditure incurred byan assessee after the 31st day of March, 1964, on advertisement or on maintenance of anyresidential accommodation including any accommodation in the nature of a guest-houseor in connection with travelling by an employee or any other person (including hotelexpenses or allowances paid in connection with such travelling) shall be allowed only tothe extent, and subject to such conditions, if any, as may be prescribed.”