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PETITIONER: COMMISSIONER OF INCOME-TAX

       Vs.

RESPONDENT: PATEL BROTHERS & CO. LTD, ETC. ETC.

DATE OF JUDGMENT09/05/1995

BENCH: VERMA, JAGDISH SARAN (J) BENCH: VERMA, JAGDISH SARAN (J) SINGH N.P. (J) MUKHERJEE M.K. (J)

CITATION:  1995 AIR 1829            1995 SCC  (4) 485  JT 1995 (5)   364        1995 SCALE  (3)650

ACT:

HEADNOTE:

JUDGMENT:                   THE 9TH DAY OF MAY,1995 Present:                 Hon’ble Mr.Justice J.S.Verma                 Hon’ble Mr.Justice N.P.Singh                 Hon’ble Mr.Justice M.K.Mukherjee Mr.B.B.Ahuja, Sr. Adv. Mr.B.S.Ahuja, Ms.A.Subhashini, Mrs.A.K.Verma, Mr.A.Subba Rao, Mr.S.K.Mehta, Mr.Dhruv Mehta, Mr.K.R.Nagaraja, Mr.M.G.Ramachandran, Mr.S.C.Patel, and Ms.Janki Ramachandran, Advs. with him for the appearing parties.                       J U D G M E N T      The following Judgment of the Court was delivered:                IN THE SUPREME COURT OF INDIA                 CIVIL APPELLATE JURISDICTION              CIVIL APPEAL NOS. 1455-57 OF 1976 Commissioner of Income-tax                  .... Appellant                             vs. Patel Brothers & Co. Ltd.                   .... Respondent [WITH S.L.P.(c) Nos. 1804-1805, 4257 of 1977, C.A. Nos. 6142 of 1990, 1075-1078 of 1976, S.L.P.(c) No. 1374 of 1977, C.A. No. 872 of 1976, S.L.P. (c) Nos. 1385 of 1977, 8865 of 1979, Tax Ref. Case Nos. 4-6 of 1979, S.L.P. (c) No.655 of 1977, C.A.No.5662 of 1995 (@ S.L.P.(c) No. 9255 of 1981), 12475 of 1985, C.A. No.2116 of 1977, C.A.No.5663 of 1995 (@ S.L.P. (c) No. 2318 of 1979), C.A. Nos.33, 34-35, 36, 37, 38-39, 40, 41, 42, 43-44, 45 of 1978, 698 of 1977, S.L.P. (c) No. 478 of 1981, C.A.Nos.1322 of 1978, 3433-34 of 1991, 1850 of 1975, 831, 832, 1585-88, 2436, 1077, 1075-76, 1079, 1092, 1103-04, 1120 of 1977, 118 of 1984, 6137 of 1990, S.L.P.(c) No. 745 of 1978, C.A. Nos. 2519 of 1980, 1746 of 1984, Tax Ref. Case No. 3 of 1979, C.A. No.2900 of 1977, S.L.P.(c) No. 8357 of 1983, and C.A. Nos. 2397-98 of 1977, 1581-82 of 1977, and Tax Ref. Case No. 4 of 1977].                           JUDGMENT

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J.S.VERMA.J.:      These appeals  and the  connected matters  involve  for decision the  common question of law relating to the meaning of "entertainment  expenditure" in  Section  37(2A)  of  the Income-tax Act,  1961 (hereinafter referred to as "the Act") during the  relevant assessment  years. The  decision of the Gujarat High  Court in  Commissioner of  Income-tax, Gujarat vs. Patel Brothers & Co. Ltd., [1977] 106 I.T.R. 424 (Guj.), on this  point is challenged by the revenue in these appeals by a  certificate granted  under Section 261 of the Act. The connected matters  involve the  same point. All cases relate to the  period  prior  to  1.4.1976  from  which  date  only Explanation 2  inserted in sub-section (2A) of Section 37 by the Finance  Act, 1983  was  applied  retrospectively,  even though sub-section  (2A)  was  inserted  w.e.f.1.10.1967  by Taxation Laws (Amendment) Act, 1967.      The material facts in these appeals illustrative of all connected matters,  are these: The relevant assessment years are 1969-70,  1970-71 and 1971-72 of which the corresponding previous years  ended on  September 30,  1968, September 30, 1969 and  September 30,  1970 respectively.  The assessee, a limited company,  claimed kitchen  expenses of  Rs.22,301/-, Rs.25,979/-   and   Rs.28,620/-   respectively   for   these assessment years as expenses incurred for providing meals to its employees  and its  customers in  the ordinary course of its  business  as  customary  trade  usage.  The  Income-tax officer  disallowed   the  expenditure   to  the  extent  of Rs.10,101/-,  Rs.12,979/-,   and  Rs.17,305/-   respectively corresponding to the expenses incurred for meals provided to the customers  even though  it was found that the meals were ordinary  and   not  in  any  manner  lavish.  The  assessee preferred an  appeal to the Appellate Assistant Commissioner against the  partial disallowance  of this  expenditure. The Appellate Assistant  Commissioner held  that the  meals were bare necessity  having regard to the nature of business and, therefore, the Income-tax officer was directed to grant that allowance. The  matter then  went in  appeal to the Tribunal which  confirmed   the  order  of  the  Appellate  Assistant Commissioner. At  the instance  of the revenue, the Tribunal referred to the High Court for its decision two questions of law, namely,      (1) Whether,  on the  facts and in the circumstances of the case,  the expenditure  in question was in the nature of entertainment expenditure in law?      (2) Whether,  on the  facts and in the circumstances of the case,  the expenditure  in question  would be  allowable only to  the limited  extent  of  Rs.5,000/-  under  section 37(2A)  of  the  Income-tax  Act,  1961,  for  each  of  the assessment years under reference? Identical questions  of law  were referred for all the three assessment years.      The High  Court answered  both  the  questions  in  the negative since  it was  found on  the facts  by the Tribunal that indisputably the upcountry constituents of the assessee came to  Ahmedabad for  the purpose  of  business  with  the assessee and  having regard  to the  nature and magnitude of the business  of the assessee, it would be necessary for the assessee to make arrangements to provide meals to them while in Ahmedabad  for business  with  it,  as  it  was  not  the revenue’s case  that the  assessee had  spent the  money for throwing lavish  parties for  its constituents.  It had been found that the expenditure was for serving ordinary meals as a  bare   necessity  of   the  business.   Accordingly,  the references were  answered against  the revenue and in favour of the  assessee. These  appeals are  by certificate against

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that decision. The same question is involved for decision in the connected matters.      There is  a conflict  in the  view taken  by  the  High Courts on  the main  question. The  view taken  by the  High Courts of  Andhra Pradesh,  Rajasthan,  Madhya  Pradesh  and Karnataka is the same as that of the Gujarat High Court. The contrary  view   has  been  taken  by  the  High  Courts  of Allahabad, Punjab  & Haryana, Patna and Kerala. The decision of the  Delhi High  Court in  Commissioner of Income-tax vs. Rajasthan Mercantile Co. Ltd.etc. etc.,[1995] 211 ITR 400 is in line  with the  Gujarat view. The difference in the views taken by   different  High Courts  has led  to  one  set  of decisions against the revenue and another set in its favour. This is how in this court some appeals and other matters are by the  revenue while  the rest  are by  the  assessees.  As earlier stated, all these matters relate to the period prior to 1.4.1976  and, therefore,  the decision is to be based on sub-section (2A)  of Section 37 of the Act minus Explanation 2 inserted  later.  We  would  refer  to  the  two  sets  of decisions after  mentioning the  rival contentions  and  the view taken by us.      The contention  of Shri  B.B.Ahuja, learned counsel for the  revenue   is  that   all  kinds   of   hospitality   is entertainment  and,   therefore,  the   entire   expenditure incurred under this head, even for serving ordinary meals as a bare  necessity, falls  under sub-section  (2A) of Section 37; and  the expression  "entertainment expenditure" in sub- section (2A) must be construed to mean from the inception as defined in  Explanation 2 to sub-section (2A) of Section 37, since Explanation  2 is  merely clarificatory.  It was urged that  for  this  reason  insertion  of  Explanation  2  only w.e.f.1.4.1976   is    immaterial   and    the    expression "entertainment expenditure"  in sub-section  (2A) of section 37 must  be so  construed  even  for  the  period  prior  to 1.4.1976. In  reply, Shri  Harish Salve, learned counsel for the assessee  contended that purposive interpretation of the provision must be made. It was urged that the purpose was to curb the  tendency of  incurring lavish  expenditure and not customary hospitality extended by offering ordinary meals as a bare  necessity since  the traditional  meaning  of  every hospitality is  not entertainment.  It was  urged  that  the finding in  all these  cases was  that the allowance claimed was only in respect of the expenditure incurred in providing ordinary meals as a bare necessity and not any lavish food.      Section 37, to the extent material, is as under:      "37. General. - (1) Any expenditure (not      being   expenditure    of   the   nature      described in  sections 30  to 36 and not      being   in   the   nature   of   capital      expenditure or  personal expenses of the      assessee), laid  out or  expended wholly      and exclusively  for the purposes of the      business or  profession shall be allowed      in computing the income chargeable under      the head  "Profits and gains of business      or profession".           (2)    Notwithstanding     anything      contained   in   sub-section   (1),   no      expenditure    in    the    nature    of      entertainment   expenditure   shall   be      allowed in  the case of a company, which      exceeds the aggregate amount computed as      hereunder:-       ***             ***                 ***           *(2A)   Notwithstanding    anything

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    contained in  sub-section  (1)  or  sub-      section (2),  no allowance shall be made      in respect of so much of the expenditure      in   the    nature   of    entertainment      expenditure  incurred   by  an  assessee      during any  previous year  which expires      after the  30th day  of September, 1967,      as is  in excess of the aggregate amount      computed as hereunder:-      ***             ***                 ***      Explanation 1.-.........           ***Explanation 2.  -For the removal      of doubts,  it is  hereby declared  that      for the purposes of this sub-section and      sub-section (2B), as it stood before the      1st day  of April,  1977, "entertainment      expenditure"  includes   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  manner whatsoever  and      whether or not such provision is made by      reason  of   any  express   or   implied      contract or  custom or  usage of  trade,      but does not include expenditure on food      or beverages provided by the assessee to      his  employees  in  office,  factory  or      other place of their work.           **(2B)   Notwithstanding   anything      contained in  this section, no allowance      shall be  made in respect of expenditure      in   the    nature   of    entertainment      expenditure incurred within India by any      assessee after the 28th day of February,      1970."                          (emphasis supplied)      * Sub-section  (2A) was inserted w.e.f.      1st October, 1967 by the Taxation Laws      (Amendment) Act, 1967.      ** Sub-section (2B) was inserted w.e.f.      1st April, 1970 by the Finance Act,      1970.      *** Explanation 2 was inserted by the      Finance Act, 1983 retrospectively w.e.f.      1.4.1976.      In Sampath  Iyengar’s Law  of Income Tax, 8th Ed., vol. 2, reference  is made to circular No. 372 dated December, 8, 1983 of  the Board,  (1984) 146 ITR st 31, wherein the scope and effect of the above amendments was explained as under:-                "Provision     for     curbing      avoidable or ostentatious expenditure in      business or profession- Section 37 - 30.      Section  37   of  the   Income-tax   Act      provides   for    deduction    in    the      computation of  taxable profits  of  any      expenditure other  than  expenditure  of      the nature  described in  sections 30 to      36 and  section 80VV,  or expenditure in      the nature  of  capital  expenditure  or      personal expenses  of the assessee, laid      out or  expended wholly  and exclusively      for the  purposes  of  the  business  or      profession carried  on by  the taxpayer.      With   a   view   to   curbing   certain      categories of  avoidable or ostentatious

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    expenditure  by  assessees  carrying  on      business or  profession, the Finance Act      has made  certain amendments  to section      37 of  the Income-tax Act. The substance      of  these  amendments  is  explained  in      paragraphs 31 to 34 hereunder.           Entertainment  expenditure.-   31.1      For the  removal of doubts regarding the      scope of  the expression  "entertainment      expenditure",  the   Finance   Act   has      inserted  a   new  Explanation  for  the      purposes of  sub-section (2A) of section      37 and  also sub-section  (2B)  of  that      section as that sub-section stood before      1 April, 1977. The Explanation clarifies      that     "entertainment     expenditure"      includes  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  manner whatsoever and whether      or not  such provision is made by reason      of any  express or  implied contract  or      custom,   usage   or   trade.   However,      expenditure incurred  in providing  food      or  beverages  by  an  employer  to  his      employee in  office,  factory  or  other      place of their work will not be regarded      as entertainment expenditure.           31.2 This  amendment  takes  effect      retrospectively from  1 April, 1976, and      will, accordingly,  apply in relation to      the   assessment    year   1976-77   and      subsequent years.           31.3 Under  the existing provisions      of section 37(2A) of the Income-tax Act,      deduction in  respect of  expenditure on      entertainment  is   subject  to  certain      limits calculated  with reference to the      quantum of profits as under:-                               (at page 2255)           In the  Income-tax Act,  1961, Chapter IV contains provisions relating  to computation  of total income wherein Section D  containing Sections 28 to 44D pertains to profits and gains  of business  or profession. Section. 28 specifies the income  which is chargeable to income tax under the head "profits and  gains of  business or  profession". Section 29 says that  the income  referred to  in Section  28 shall  be computed in  accordance with  the  provisions  contained  in Sections 30  to 43D. Sections 30 to 36 provide for deduction of  certain   expenditures  incurred  for  the  purposes  of business or profession. Then comes Section 37 which contains the  general   provision  permitting   deduction   of   "any expenditure  .....   laid  out   or  expended   wholly   and exclusively for  the purposes  of the business or profession ..... in  computing the  income chargeable  under  the  head "profits and  gains of  business  or  profession",  by  sub- section (1),  sub-section (2)  therein begins  with  a  non- obstante clause to exclude from the ambit of sub-section (1) the entertainment expenditure by saying that "no expenditure in the nature of entertainment expenditure shall be allowed" in the case of a company which exceeds the specified amount. Similar provision  is  made  in  sub-section  (2A)  for  any assessee. In  other words,  the general provision in Section 37 is  that any  expenditure laid  out or expended wholly or

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exclusively for  the purposes  of the business or profession shall be  allowed  but  no  expenditure  in  the  nature  of entertainment shall be allowed as stated in sub-sections (2) and (2A)  in excess  of the  amount specified.  For claiming deduction of  the  business  expenditure  according  to  the general rule,  the test  of commercial expediency is applied but exclusion  is made  of any  expenditure which  is in the nature  of  "entertainment  expenditure".  Without  anything more, it  means that  an expenditure incurred for commercial expediency or  usage of the trade is a permissible deduction unless  it   partakes  the  character  of  an  entertainment expenditure,  in   which  case   the  permissible  limit  is specified. The  controversy in  the present  case relates to the meaning  of "entertainment  expenditure" in  sub-section (2A)  of  Section  37  before  insertion  of  Explanation  2 therein.      The question  involved  in  these  matters  relates  to deduction of  expenditure  incurred  in  providing  ordinary meals and refreshments to the outstation customers according to the  customary hospitality and trade usage satisfying the general test of commercial expediency.      Generally, "entertainment expenditure" is an expression of wide  import. However,  in the context of disallowance of "entertainment expenditure"  as a  business  expenditure  by virtue  of   sub-section  (2A)   of  Section  37,  the  word "entertainment"  must   be  construed   strictly   and   not expansively. Ordinarily,  "entertainment" connotes something which may  be beneficial  for the  mental or  physical  well being but  is  not  essential  or  indispensable  for  human existence.  A   bare  necessity,   like  ordinary  meal,  is essential   or   indispensable   and,   therefore   is   not "entertainment. If  such a  bare  necessity  is  offered  by another, it is hospitality but not entertainment. Unless the definition  of  "entertainment"  includes  hospitality,  the ordinary   meaning   of   "entertainment"   cannot   include hospitality. For  this reason,  the expenditure  incurred in extending customary  hospitality by  offering ordinary meals as a  bare necessity,  is  not  "entertainment  expenditure" without the  aid of  the enlarged meaning given to the words by Explanation  2 inserted w.e.f.1.4.1976. The definition in Explanation 2  is not  the ordinary  meaning  of  the  words "entertainment expenditure",  but the enlarged meaning given for the purpose of the Act w.e.f.1.4.1976.      The object  of sub-section  (2A)  is  to  disallow  any lavish expenditure in the form of business expenditure. This is obvious from the several amendments made in the provision from time  to time. It is so understood even in the circular issued by  the Board. The object of the provision clearly is to allow  deduction of  the essential  business  expenditure incurred due  to commercial  expediency and according to the trade usage excluding the lavish expenditure. The dispute in the present  cases relates only to the amount which has been held to  be essential  business  expenditure  of  this  kind incurred in  providing ordinary  meals as bare necessity. In the view  taken by  us, such expense did not come within the meaning of  "entertainment expenditure"  prior  to  1.4.1976 when  Explanation  2  was  brought  in  by  a  retrospective amendment made  in 1983  of sub-section  (2A) of Section 37. The finding  of fact in all cases, therefore, satisfies this test to  allow deduction of the expenditure incurred by each assessee and claimed under this head for the period prior to 1.4.1976.      Sub-section (2A)  was inserted w.e.f. 1st October, 1967 by the Taxation Laws (Amendment) Act, 1967 and Explanation 2 inserted therein by Finance Act, 1983 retrospectively w.e.f.

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1.4.1976 while  sub-section (2B)  was  inserted  w.e.f.  1st April, 1970  by the  Finance Act,  1970. As  earlier stated, these cases  relate to  the period  prior to  1.4.1976  from which date  Explanation 2  to sub-section  (2A) was inserted retrospectively. We have, therefore, to construe sub-section (2A) as it existed without the Explanation 2. The meaning of Explanation 2 is quite clear and it has enlarged the meaning to widen the tax net.      Learned  counsel   for  the   revenue  contended   that Explanation 2  is clarificatory and, therefore, even without Explanation 2 the provision must be understood and construed in the  same manner.  It appears  to us  that  insertion  of Explanation 2  made retrospectively  but restricted  in  its application only w.e.f.1.4.1976 is itself an indication that its  application   prior  to   1.4.1976  is   excluded.   If Explanation 2  was  merely  clarificatory  of  the  ordinary meaning, as contended by learned counsel for the revenue, it was unnecessary  to restrict  its restrospective application in this  manner only from 1.4.1976. The construction we have made of  sub-section (2A) of Section 37 as it existed during the  relevant   assessment  period   cannot,  therefore,  be affected by  Explanation 2  to sub-section  (2A)  which  was inapplicable during the relevant period.      In our  opinion, the  construction we  have made of the provision as it existed during the relevant period flows not merely from  the language  of the provision but also matches with the  object thereof.  It  means  that  the  expenditure incurred by the assessees in providing ordinary meals to the outstation customers  according to  the established business practice, was a permissible deduction inspite of sub-section (2A) of  Section 37, to which the assessees were entitled in the computation  of their  total income  for the  purpose of payment of  tax under  the Income-tax  Act, 1961  during the relevant period prior to 1.4.1976.      We shall now refer briefly to the conflicting decisions of the  several  High  Courts  on  the  point.  Amongst  the decisions in favour of the revenue is Brij Raman Dass & Sons vs. Commissioner  of Income-tax.  Lucknow. [1976] 104 I.T.R. 541 of  the Allahabad High Court which has been referred and followed in subsequent decisions of other High Courts taking the view in favour of the revenue. In this line of cases are the decisions  of the High Courts of Punjab & Haryana, Patna and Kerala.  The other  line of cases wherein the view taken is in  favour of  the assessee are the decisions of the HIgh Courts of Gujarat, Andhra Pradesh, Madhya Pradesh, Rajasthan and Karnataka.  The main  decision of the Gujarat High Court is Commissioner of Income-tax, Gujarat II vs. patel Brothers & Co.  Ltd., [1977]  106 I.T.R.  424 which has been referred and followed in the later decisions in that line.      We would  first deal with the decision of the Allahabad High Court  reported in [1976] 104 I.T.R. 541 which is under appeal in  Civil Appeal No. 1850 of 1975 and the decision of the Gujarat  High Court  reported in  [1977] 106  I.T.R. 424 which is  under appeal in Civil Appeal Nos. 1455-57 of 1976. In Brij  Raman Dass  & Sons  (supra), it  was held that sub- section (2A)  of Section  37 is not an independent provision but is  a proviso to sub-section (1) of section 37 since the expenditure falling  under sub-section (2A) must necessarily come within  sub-section (1).  Thereafter, while considering the meaning  of "entertainment" in this context, it was held as under :-           " .........  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

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    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.           In Bentleys,  Stokes &  Lowless  v.      Beeson (H.M.Inspector  of Taxes), [1952]      33 TC  491 (CA),  a firm  of  solicitors      incurred   expenses    in   entertaining      clients. The  entertainment consisted of      providing lunch  to the  clients. It was      held  that   expenditure  was   incurred      wholly and  exclusively for  purposes of      business and was an allowable deduction.      The same  is the position in the instant      case. The  petitioner has been providing      to its  customers refreshments  and this      constitutes an expenditure in the nature      of   entertainment   expenditure".   the      entire  expenditure   would  have   been      allowed but for the amendment introduced      by section  37 (2A)  which restricts the      allowance of  such an  expenditure to  a      maximum limit of Rs. 5,000/-"                               (at page 544)      There is  no more  discussion  on  the  point  in  this decision.      On the  other hand,  the Gujarat  High Court  in  Patel Brothers &  Co. Ltd.  (supra) took a different view. In this decision, certain  broad tests  or guidelines have also been indicated to  determine the  nature of  expenses allowed  as entertainment expenses.  In our  opinion, that  exercise  is unnecessary since the broad test indicated by us is the only thing which can safely be indicated and the determination of the question  in each case is one of fact. The conclusion on the basis of the finding of fact recorded therein was stated thus :           "......... The  Tribunal has agreed      with     the     Appellate     Assistant      Commissioner who  has found  that it was      customary for  the assessee  due to very      long-established tradition  that farmers      who came  to deliver  the  goods,  i.e.,      cotton, groundnuts,  rice, pulses,  were      given meals  from the kitchen run by the      assessee and  if the  assessee failed to      give   this    normal    courtesy,    it      apprehended that the farmers might offer      their produce  to other  competitors  in      the  field   of  the  assessee  and  the      assessee  would   lose  the  goods.  The      Appellate  Assistant   Commissioner  has      also found  that the expenditure was for      serving ordinary  meals to the employees      as well  as to  the farmer customers and      they were  not such which entertained or      amused the  guests  since  the  assessee      provided  served   meals   as   a   bare      necessity of  the business. In that view

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    of   the    matter,   therefore,   these      references  must   be  rejected  and  we      answer the  questions referred  to us in      the    negative    and    against    the      Commissioner,......"                               (at page 442)      This conclusion  of  the  Gujarat  High  Court  on  the finding of  fact recorded by the Tribunal is consistent with the view  we have  taken and,  therefore, we uphold the same for the  reasons given by us which are sufficient to sustain the ultimate view. We may observe that the wide observations and the  elaborate guidelines  given in the Gujarat decision which are  in excess  of the  broad test indicated by us and not necessary to support the conclusion, are unnecessary for the decision  and, therefore,  affirmance of  the conclusion reached in  the Gujarat  decision should not be constured as an affirmance of the wide observation therein.      We may  now refer  to the  decision of  the Delhi  High Court in Commissioner of Income-tax vs. Rajasthan Mercantile Co. Ltd.  etc. etc.,  [1995] 211 ITR 400. The true effect of Explanation 2 added in sub-section (2A) of Section 37 of the Act has been correctly understood therein as under.           "The    declaration     and     the      clarification involved in Explanation 2,      are only for the purposes of assessments      with  effect  from  April  1,1976.  This      provision   widens    the   concept   of      "entertainment expenditure" by including      in its  scope such  of the  expenditures      which   are    otherwise   traditionally      understood    as     routine    business      expenditures incurred in connection with      "business-hospitality".  Therefore,  the      widened meaning  cannot be  extended  to      past   periods    when    the    amended      Explanation 2 was not in operation."                               (at page 416) We  approve   the  above   view  which   accords  with   the construction made by us of the provision.      In the  view we  have taken,  the contrary  view of the Allahabad High  Court in  Brij Raman Dass & Sons, [1976] 104 I.T.R. 541, cannot be accepted to be correct and so also the decisions of  the different High Courts which have taken the same view.  Accordingly, the  decision of the Allahabad High Court and  the other  decisions  of  different  High  Courts taking that view are to be treated as overruled.      Consequently, all  these matters  are decided in favour of the  assessees and  against the  revenue with  the result that the  appeals of  the assessees  are allowed  while  the appeals,  SLPs   and  Tax  References  by  the  revenue  are dismissed. No costs.