JUDGMENT
S.P. Bharucha
1. The reference is made at the instance of the assessee. Two questions are raised which read thus :
“(i) Whether, on the facts and in the circumstances of the case, and having regard to the nature of the business carried on by the assessee, the entertainment expenditure of Rs. 13,200 was liable to be disallowed for 1961-62 assessment year under section 10(2)(xv) of the Indian Income-tax Act, 1922, and similar expenditure of Rs. 24,269 and Rs. 20,101 was liable to be disallowed under section 37(2A)/(2B) of the Income-tax Act, 1961, for 1970-71 and 1971-72 assessment years ?
(ii) Whether, on the facts and in the circumstances of the case, the assessee-company was not entitled to deduction for 1971-72 assessment year in respect of Rs. 15,200 being the expenditure incurred on the feasibility of a hotel project in Goa ?”
2. The reference was first heard by this Bench as far back as on April 20, 1987. We had then passed an order calling for a supplemental statement of the case setting out further and better particulars in the absence of which we found it impossible to answer the first two questions. No supplementary statements of the case has been prepared. Mr. Kolah, learned counsel for the assessee, states that it cannot be prepared because the assessee has no further and better particulars which would enable its preparation. In the absence of such particulars, we are unable and decline to answer the first question.
3. The second question relates, having regard to the statement of the case, to expenditure incurred on exploring the feasibility of a new line of business. The assessee’s existing business is of a travel agency. The expenditure was incurred in exploring the feasibility of setting up a hotel in Goa. The Tribunal held that the expenditure incurred in connection with the feasibility of a new business venture was not an admissible deduction. Upon the facts that are before us, we are in agreement that a travel agency business does not include hoteliering. We answer the second question in the affirmative and in favour of the Revenue.
4. No orders as to costs.