Satish Chandra, C.J.
1. For the assessment year 1972-73 the assessee, who is a commission agent, claimed deduction of Rs. 13,865 on account of dharmada, gaushala and pathshala expenses. He also claimed deduction of Rs. 5,297 on account of messing expenses for his constituents. The ITO disallowed the first claim in toto but allowed the claim in respect of messing expenses to the extent of half. On appeal, the Tribunal, relying upon the Full Beach decision of this court in Thakur Das Shyam Sunder v. Addl. CIT : 93ITR27(All) , upheld the assessee's claim in respect of dharmada, etc. In regard to the claim for messing expenses for the constituents it held, it does not involve any element of entertainment. These expenses are necessitated by the nature of the trade carried on by the assessee. The constituents, who came from outlying agencies, have to stay on for lunch or dinner and for that purpose the assessee provided them with meals. It accordingly allowed the claim of the assessee in full.
2. At the instance of the CIT the Tribunal has referred the followingquestions for or opinion :
'1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the receipts on account of dharmada, gaushala and pathshala could not be treated as part of the trading receipt of the assessee ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the AAC's order that the messing expenses claimed by the assessee were not entertainment expenses ?'
2. The first question is covered by the decision of a Full Bench of this court in Thakur Das Shyam Sunder v. Addl. CIT : 93ITR27(All) , which is binding on us. In regard to the second question learned counsel for therevenue has invited our attention to Brij Raman Dass & Sons v. CIT : 104ITR541(All) . In this case a Division Bench held that the phrase 'entertainment expense' occurring in Section 37(2A) of the I.T. Act, 1961, includes all expenses incurred in connection with the business on the entertainment of customers and constituents. The entertainment may consist of providing refreshments or it may consist of providing some other form of entertainment.
3. Learned counsel for the assessee has invited our attention to the decisions of the Gujarat High Court in CIT v. Patel Brothers & Co. Ltd. : 106ITR424(Guj) and of the Bombay High Court in CIT v. Shah Nanji Nagsi : 116ITR292(Bom) . These two decisions have diferred from the view taken by this court while a Full Bench of the Kerala High Court in CIT v. Veeraiah Reddiar : 106ITR610(Ker) has followed the decision of this court. The previous decision of this court is, however, binding on us. For the assessment year 1972-73, the relevant provisions of Section 37(2A) were amended and no amount was admissible under the head 'Entertainment expenses'. In this view the result would be that normally the entire amount claimed by the assessee would be disallowed but we find that half of the amount was allowed by the ITO. The department has not gone in appeal either to the Commissioner or to the Tribunal. This part of the allowance cannot be touched. The half which had been allowed by the ITO was outside the purview of the appeal in the Tribunal. The result will be that ultimately the ITO's order stands restored.
4. We, therefore, answer the first question in the affirmative, in favour of the assessee and against the department and the second question in the negative, in favour of the department and against the assessee. In view of the divided success the parties shall bear their own costs.