J.V.Gupta, J.

1. The assessee-firm is a dealer of M/s. Ashok Leyland Ltd. for Jammu and Kashmir. In September, 1969, the assessee received a letter from Shri M. D. Kapoor, sales director of M/s. Ashok Leyland, Madras, to the effect that it had been decided to hold the " Main Dealers Conference 1969 " at Srinagar some time in October 1969. It was further stated by Shri M. D. Kapoor that he would require 8/10 cars for the delegates and that he would appreciate if the assessee could make arrangements for the same. It was further suggested by Shri Kapoor that the assessee should host a dinner for the delegates on 14th October, 1969, and that M/s. Ashok Leyland would compensate the assessee in some other way for the expenditure incurred by it. In pursuance of this letter, the assessee spent a sum of Rs. 13,135 on the Ashok Leyland Dealers Conference in respect of taxi bills and dinner, etc. In addition to this expenditure, the assessee also spent the sum of Rs. 4,543 on providing tea, etc., to its customers and members of the staff. Holding that the expenditure of Rs. 17,678 was in the nature of entertainments, the ITO disallowed the same while passing order for the assessment y