ORDER
1. In this reference relevant for the assessment year 1980-81, following two questions of law have been referred for our opinion :
"1.
Whether the Income-tax Appellate Tribunal ('Tribunal') was justified in law to disallow the claim of the assessee for Rs. 40,952 representing discretionary expenses ?
2.
Whether the Tribunal was justified in law in disallowing the whole or part of the claim of the assessee for the deduction of Rs. 2,10,029 under section 37(2A) of the Income-tax Act, 1961 ?"
2. Insofar as the first question is concerned, it is a common ground that in respect of the assessment years 1978-79 and 1979-80, a similar expenditure was allowed by the Income-tax Appellate Tribunal in ITA No. 4056/1982 decided on 21-1-1984 in ITA No. 946/1983 decided on 11-4-1984 respectively. The decision of the Tribunal for both the years was accepted by the revenue. There is no reason for taking a different view for this year. The first question is therefore answered in the negative, that is, in favour of the assessee and against the revenue.
3. Insofar as the second question is concerned, for the assessment year 1978-79 and for the assessment year 1979-80, 20 per cent of such expenditure pertaining to the employees was allowed by the Tribunal in view of Explanation 2 to section 37(2A) of the Act in ITA No. 4056/1982 decided on 21-1-1984 and ITA No. 946/1983 decided on 11-4-1984 respectively. Both these decisions were accepted by the revenue.
4. We see no reason to take a different view in the matter. Consequently, we allow the expenditure incurred pertaining to the employees and answer the question in the negative to the extent that the assessee will be entitled to 20 per cent of the expenditure incurred.
The reference is disposed of.