AJIT K. SENGUPTA, J.

( 1 ) THIS reference under Section 256 (2) of the Income-tax Act, 1961, at the instance of the assessee, relates to the assessment year 1971-72.

( 2 ) THE facts leading to this reference are shortly stated hereunder : for the year under consideration, the assessee debited a total amount of Rs. 1,66,585 as expenditure on "refreshments" in the account styled as "non-members profit and loss account". The details of the expenditure furnished to the Income-tax Officer by the assessee are as follows : Rs.

(1) Refreshment served to --

(a) Stewards, secretary and others including donors of cups and certain VIPs. 83,518

(b) Permanent and race day officials

19,488

(c) Permanent and race day officials other than officials. 34,300

(2) Morning tea to officials attending to track work in the morning and trainers and jockeys exercising the horses. 13,260

(3) Refreshments served on the occasion of the Turf Invitation Cup Race held on 6th March, 1971 . 7,300

(4) Expenditure on annual party thrown to owners, trained jockeys, book-makers, club-makers, police officers and other persons connected with racing

8,699

TOTAL

1,66,585

 

( 3 ) ON an examination of the b

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