IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No.115 of 2004 Date of decision: 20.7.2010 The Commissioner of Income Tax, Rohtak -----Appellant Vs. M/s The Atlas Cycle Industries Limited, Sonepat ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Krishan Kumar Mehta, Advocate for the revenue. Mr. Akshay Bhan, Advocate for the assessee. Adarsh Kumar Goel,J. This order will dispose of ITA Nos.273 to 275 of 2003, 115 of 2004 and 105 of 2005 as all these appeals involve common questions of law. Facts have been taken from ITA No.115 of 2004. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (for short, ‘the Act’) against order dated 7.7.2003 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘A’, New Delhi in ITA No.2608/Del/99 for the assessment year 1995-96, proposing to raise following substantial questions of law:- “i) Whether on the facts and in the circumstances of the case, the Hon’ble ITAT has erred in law in restricting the disallowance made by the AO out of entertainment expenses to 60% and allowing balance 40% treating as normal business expenditure without any evidence on record to ITA No.115 of 2004 prove that the entertainment expenditure on employees was incurred in office, factory and other place of their work? ii) Whether the facts and in the circumstances of the case, the Hon’ble ITAT has erred in ignoring the explanation 2 (iii) to section 37(2) which lays down that only the expenditures incurred by the Assessee on its employees in the office, factory or other place of business is allowable?” In view of our order passed today in ITA No.161 of 2002 (The Commissioner of Income Tax, Rohtak v. The Atlas Cycle Industries Limited, Sonepat), the questions proposed have to be decided against the revenue and in favour of the assessee. We order accordingly. The appeals are dismissed. (Adarsh Kumar Goel) Judge July 20, 2010 (Ajay Kumar Mittal) ‘gs’ Judge 2