JUDGMENT : R.R. Misra, J. M/s. Phool Chand Gajanand, a registered firm, carried on wholesale cloth business at Kanpur. During the assessment year 1974-75 it claimed a deduction of Rs. 7190/- in regarding to the messing expenses of its customers. The Income Tax Officer disallowed the claim u/s 37(2B) of the Income Tax Act 1961 (hereinafter referred to as the Act). On appeal, the Appellate Assistant Commissioner of Income Tax, however, accepted the plea of the Assessee and accordingly allowed the appeal. Aggrieved, the Income Tax Officer concerned filed a second appeal before the Income Tax Tribunal. The Tribunal took the view that with regard to the provisions of Section 37(2B) of the Act the expenses in question fell within the category of "in the nature of entertainment expenditure" and, therefore, deserves to be disallowed. In doing so, it also followed a decision of this Court in Brij Raman Dass and Sons Vs. Commissioner of Income Tax, (1976) 104 ITR 541 . The result was that the order passed by the Appellate Assistant Commissioner was set aside and the order passed by the Income Tax Officer disallowing the claim of the Assessee was restored. Thereafter at the instance of the Assessee, the following question was referred for opinion of this Court u/s 256(1) of the Act: Whether on the facts and in the circumstances of the case, the expenditure of Rs. 7,190/- could be disallowed u/s 37(2B) of the Act. 2. When the matter came up for hearing before a Division Bench of this Court it found that there is a divergence of judicial opinion on this question and the leading case which takes a contrary view was the case of Commissioner of Income Tax, Gujarat II Vs. Patel Brothers and Co. Ltd., (1977) 106 ITR 424. It accordingly felt that while deciding Brij Raman Das's case (supra), this Conrt had interpreted the word "entertainment" in a literal sense but as the amount was spent in providing food to the customers it was nothing more than extension of common Courtesy to a visitor who comes across the Assessee in connection with his business. It accordingly felt that while deciding Brij Raman Das's case (supra), this Conrt had interpreted the word "entertainment" in a literal sense but as the amount was spent in providing food to the customers it was nothing more than extension of common Courtesy to a visitor who comes across the Assessee in connection with his business. It also felt that the various High Courts which took the view and agreed with the view of this Court in the case of Brij Raman Das (supra) have to be tested in the light of the concept of entertainment generally held in the society to which the enactment relates. Therefore; the said Bench was of the opinion that the said decision of Brij Raman Das (supra) required reconsideration and accordingly the matter has been referred to us for our opinion. 3. We have heard learned Counsel for the parties. 4. Learned Counsel for the Assessee contended that the expenditure so incurred by the Assessee is not liable to be disallowed u/s 37 (2A) and (2B) of the Act as the expenditure was not on lavish or extravagant scale. In support of his submission learned Counsel has relied upon the decision 'in the case of Commissioner of Income Tax, Gujarat II Vs. Patel Brothers and Co. Ltd., (1977) 106 ITR 424 followed by various other High Courts in the cases of Commissioner of Income Tax, Karnataka Vs. Corporation Bank Ltd., (1979) 117 ITR 271 , Addl. Commissioner of Income Tax Vs. Maddi Venkataratnam and Co. Ltd., (1979) 119 ITR 514, Commissioner of Income Tax Vs. Karuppuswamy Nadar and Sons, (1979) 120 ITR 140, C.I.T. v. Ukshmichand Muchhal (1982) 134 ITR 234 and Devichand Bastimal and Bhanwarlal Manakchand Vs. Commissioner of Income Tax, (1985) 49 CTR 43. 5. Sri. Bharatji Agrawal, learned Senior Standing Counsel appearing for the Revenue, however, on the other hand, contended that having regard to the phraseology used in Sub-clauses (2A) and (2B) of Section 37 of the Act and the wide ambit of the words "any expenditure in the nature of entertainment expenditure", the expenses in question are liable to be disallowed as has been held by the Income Tax Tribunal irrespective of the fact whether the expenditure were incurred on lavish or extravagant scale or not. In support of this contention, learned Standing Counsel has placed reliance on various decisions of this Court beginning from the leading case of Brij Raman Dass and Sons Vs. Commissioner of Income Tax, (1976) 104 ITR 541 and the cases of other High Courts which have taken the same view in C.I.T. v. Ghoru Lal Bal Chand (1978) 111 ITR 134, Commissioner of Income Tax Vs. Khem Chand Bahadur Chand, (1981) 131 ITR 336 , Mysodet (Pvt.) Ltd. Vs. Commissioner of Income Tax, (1987) 60 CTR 49 : (1987) 163 ITR 848 and Commissioner of Income Tax Vs. Veeriah Reddiar, (1977) 1 ILR (Ker) 1 : (1977) 106 ITR 610. He also submits that so far as the Allahabad High Court is concerned this Court has over a period of 12 years consistently taken the view, as was held in the case of Brij Raman Das and Sons v. C.I.T. (supra) and has relied on the subsequent cases decided by this Court in the cases of Commissioner of Income Tax Vs. Manoo Ram Ram Karan Dass, (1979) 116 ITR 606 , Commissioner of Income Tax Vs. Kunji Lal Dhanpat Rai, (1979) 116 ITR 608 and Commissioner of Income Tax Vs. Modi Spinning and Manufacturing Mills Co. Ltd., (1980) 125 ITR 361 : (1980) 3 TAXMAN 153 . 6. The mooted question, therefore, that falls for consideration before us is as to whether the amount in question spent by the Assessee would come within the expression "expenditure in the nature of entertainment expenditure" occurring in Section 37 (2A) and (2B) of the Act. To consider and answer his question, therefore, it is imperative to go into the legislative history of Section 37 of the Act and the object underlying the introduction of Section 37(2B) of the Act. 7. Under the Indian Income Tax Act, 1922, any amount spent by the Assessee for the entertainment of its business constituents and customers was allowable expenditure under the bead "Profits or gains of any business, profession or vocation carried by an Assessee" by virtue of Section 10(2)(xv) of the said Act on the ground that such hospitality and entertainment is extended wholly for the purposes of promotion of the business of the Assessee. It appears that this proviso was being misused by Assessee as there had been a growing tendency on the part of the companies and their directors and executives to entertain on a lavish scale at the expense of the company and thereafter claim the same as entertainment expenditure. Obviously this abuse was to be curbed by the Legislature. Therefore, to check the said abuse, it was found expedient to put ceiling on such expenditure and a proviso was inserted in Section 10(2)(xv) of the income Tax Act, 1922 to the effect to provide deduction on slab basis and put a ceiling on such expenditure depending on profits and gains of the business. After the repeal of the Indian Income Tax Act, 1922 the provisions of the said proviso were substantially retained in the form of Section 37(2) of the Act. As we have already indicated above that till this stage the provision was intended to exercise a check on the lavish expenditure by companies but very soon it was discovered that the Assessees other than companies were also misusing the said provision. Therefore by the Taxation Laws Amendment Act 1967, Sub-section (2A) was introduced in Section 37 of the Act whereby in the case of Assessees, other than companies, a ceiling on such expenditure was fixed. By Section 4 of the Taxation Laws Amendment Act, 1967 Sub-section (2A) was introduced in Section 37 of the Act whereunder ceiling limit of allowances of entertainment expenditure was made applicable to all categories ot Assessees. Finance Act 1968 added an explanation to Sub-section (2A)'of Section 37 thereby expanding the scope of restrictions imposed by the Sub-section so as to take in any expenditure incurred by an Assessee not only in granting an entertainment allowance to employees or other person with effect from 29th February 1968 but also any amount of such expenditure as is "in the nature of entertainment expenditure" incurred by an employee or other person for the purposes of business or profession of the Assessee. Lateron by the Finance Act of 1970 Sub-section (2B) was inserted in Section 37 of the Act which read as follows: (2B) Not with standing anything contained in this Section, no allowance shall be made in respect of expenditure in the nature of entertainment 'expenditure incurred within India by any Assessee after the 28th day of February 1970. 8. Lateron by the Finance Act of 1970 Sub-section (2B) was inserted in Section 37 of the Act which read as follows: (2B) Not with standing anything contained in this Section, no allowance shall be made in respect of expenditure in the nature of entertainment 'expenditure incurred within India by any Assessee after the 28th day of February 1970. 8. Since the year in dispute involved is the assessment year 1974-75, the restrictive provisions of this newly added Sub-section (2B) of the Act as added above in the year 1970 apply with full force. 9. It may be that entertainment given to a elongated and lavish extent has come to be an integral part in the competative business world. There is no escape from the reality of the situation that even large respectable business houses as also relatively smaller entrepreneur, because of business compulsions, have to resort to entertainment of their clients in the interest of their business. In business morality this has come to be accepted as its normal social mores. But while construing the provisions of Section 37 Sub-section (2A) and (2B) it is relevant to find out as to what led the Parliament to introduce the said Sub-sections and what is the designed and considered use of the express phraseology by Parliament. The words used are not "entertainment expenditure" simpliciter but the phrase deliberately employed is "in the nature of entertainment expenditure. 10. In the "Notes on Clauses", Clause 10 of the Finance Bill-See (1970) 73 ITR (Statutes Section) at page 73 is as follows: Clause 10 seeks to amend Section 37 of the Income Tax Act. Sub-Clause (b) seeks to insert a new Sub-section (2B) in Section 37 of the Income Tax Act and Sub-clause (a) seeks to make a consequential amendment in the Explanation to Sub-section (2A) of the Section. Under the proposed amendments, expenditure in the nature of entertainment expenditure incurred by any Assessee within India after the 28th February 1970, will be disallowed in its entirety in computing his income from business or profession. (Emphasis supplied) While introducing the Finance Bill, 1978 the Finance Minister meaning fully observed at 25 as under: The only significant change is that all entertainment expenditure incurred in India in business and the professions will now be disallowed in computing profits. (Emphasis supplied) While introducing the Finance Bill, 1978 the Finance Minister meaning fully observed at 25 as under: The only significant change is that all entertainment expenditure incurred in India in business and the professions will now be disallowed in computing profits. Similarly expenditure on guest houses, other than holiday homes for the benefit of employees on leave, will be disallowed. Those who enjoy the hospitality of their business friends should now no longer find their sense of gratitude diminished by the thought that a part of the hospitality is really paid for by the Exchequer. Explaining the provisions of the Finance Bill 1970, the relevant part at page 91 para 27 of (1970) 75 ITR (Statutes Section) in the memorandum reads as follows: 27. With a view to curbing lavish expenditure on entertainment, it is proposed to make a provision for the disallowance of entertainment expenditure incurred in India after 28-2-1970 altogether in computing the profits and gains of business or profession. Entertainment expenditure incurred outside India will continue to be admissible as a deduction subject to the limits already provided in the law (Emphasis supplied) 11. Therefore, we find that the object in inserting a new Sub-section (2B) to Section 37 of the Act was to curb the tendency for ostentatious entertainment by the Assesses thereby providing that all expenditure in the nature of entertainment expenditure incurred within India after 28th day of February 1970 was liable to be disallowed. Undisputedly in the assessment year 1974-75, with which we are concerned with, the said proviso so inserted by the Finance Act 1970 was imposed. It is a different matter that with effect from 1-4-1977 Sub-section (2B) of Section 37 was omitted but the legislature in its wisdom reintroduced the same to a limit extended by the Taxation Laws Amendment Act 1978 thereby providing a curb on expenditure incurred by an Assessee on advertisement in any souvenir, brochure, tract pamphlet or the like published by a political party. However, this amendment of the year 1978 is not concerned with "entertainment expenditure" at all. 12. Now let us advert to the divergent views on the question of allowing entertainment expenditure. 13. The earliest case in point is a decision of the Allahabad High Court in the case of Brij Raman Dass and Sons Vs. Commissioner of Income Tax, (1976) 104 ITR 541 . 12. Now let us advert to the divergent views on the question of allowing entertainment expenditure. 13. The earliest case in point is a decision of the Allahabad High Court in the case of Brij Raman Dass and Sons Vs. Commissioner of Income Tax, (1976) 104 ITR 541 . In this case the Bench repelled the contention of the Assessee that the word "entertainment" does not include the provision of refreshment, but is confined to amusement and "gratification of some sort other than food, meat and drink". Reliance for the purposes was placed upon the meaning of the word "entertainment" given in various dictionaries. The Court found that the word "entertainment" has not been defined in the Income Tax Act and, therefore, will have to be given its general meaning. It was held as under: An 'entertainment expenditure' would, in our opinion, include all expenditures Incurred in connection with business on the entertainment of customer and constituents. The entertainment may consist of providing refreshment as in this case or it may consist of providing some other sort of entertainment. Therefore, ultimately the Bench took the view that the Assessee is not entitled to the deductions claimed by it. 14. The Gujarat High Court in the leading case of Commissioner of Income Tax, Gujarat II Vs. Patel Brothers and Co. Ltd., (1977) 106 ITR 424, did not agree with the aforesaid view expressed in the case of Brij Raman Das and Sons (supra). It. on a consideration of the dictionary meaning of the word "entertainment", held that the word "entertainment" in the context of Section 37 (2A) and (2B) of the Act on Its true construction and meaning would include the acts or practice of receiving and entertaining strangers and friends in a friendly, generous and liberal way. If the act of entertainment is lavish and on grand-scale involving wasteful expenditure it would amount to entertainment. On the other band, if the acts or practice of being hospitable in the sense of providing meals, drinks or other wants of persons entertained, is an express and implied condition they would not amount to acts of entertainment. If the act of entertainment is lavish and on grand-scale involving wasteful expenditure it would amount to entertainment. On the other band, if the acts or practice of being hospitable in the sense of providing meals, drinks or other wants of persons entertained, is an express and implied condition they would not amount to acts of entertainment. Ultimately it held that hospitality shown on account of obligation of business arising an a result of an express or implied contract or arising on account of the long standing custom of a trade, business or profession, cannot amount to entertainment, and acts done in discharge of such obligation cannot be included and covered in the term "entertainment". So far as the case of Brij Raman Das and Sons was concerned, the Gujarat High Court at page 441 bas taken the view that in the said decision of the Allahabad High Court there is an over simplification of the problem and this Court had proceeded on the simple meaning of the word "entertainment" without considering the aspect in detail. It further held that messing expenses are only hospitality and does not amount to entertainment. 15. A Full Bench of the Kerala High Court, however in the case of Commissioner of Income Tax Vs. Veeriah Reddiar, (1977) 1 ILR (Ker) 1 : (1977) 106 ITR 610 dissented from the view taken by the Gujarat High Court in the aforesaid case of C.I.T. v. Patel Brothers and Co. Ltd. (supra). After considering the legislative intent and the necessity of checking the abuse of this provision by the Assessees and pointing out as to bow gradually such restrictions were imposed on the allow ability of such entertainment Expenditure, the Kerala High Court held at pages 616 and 617 as under: It is important to note that, instead of merely using the expression "entertainment expenditure", the words actually used by Parliament in Sub-sections (2A) and (2B) are 'expenditure in the nature of entertainment expenditure'. The latter expression is much wider in its content inasmuch as it would take within its scope not merely what can strictly be regarded as entertainment expenditure proper but also expenditure of allied nature partaking of some, though not all, of the characteristic of entertainment expenditure. The latter expression is much wider in its content inasmuch as it would take within its scope not merely what can strictly be regarded as entertainment expenditure proper but also expenditure of allied nature partaking of some, though not all, of the characteristic of entertainment expenditure. It appears to us to be beyond doubt that the intention of Parliament in employing the additional words "expenditure in the nature of" was to cast the net sufficiently wide as to bring within the scope of the two Sub-sections all types of expenditure in respect of which there can be said to be certain elements which invest them with the nature of entertainment expenditure. It differed with the view of the Gujarat High Court on the basis of legislative history as traced above in an earlier part of this judgment and the significant use of the expression "expenditure in the nature of entertainment expenditure" in both Sub-section (2A) and Sub-section (2B) of Section 37 of the Act. It ultimately held that the intention of Parliament was to bring within the scope of this Section all expenditures incurred by an Assessee on hospitality of any kind extended to the clients, customers or constituents directly in connection with the business or profession of the Assessee. 15. A Full Bench of the Punjab and Haryana High Court in the case of Commissioner of Income Tax Vs. Khem Chand Bahadur Chand, (1981) 131 ITR 336 also agreed with the aforesaid view of the Kerala High Court and held that the words "expenditure in the nature of entertainment expenditure" is a much wider connotation. The Punjab and Haryana High Court in this case also dissented with this view of the Gujarat High Court in the case of C.I.T. v. Patel Brothers and Co. (Supra). In arriving at its conclusion it also referred and followed its earlier decision in the case of C.I.T. v. Ghoru Lal Bal Chand (1970) 111 ITR 134, and the aforesaid decision of the Allahabad High Court in the case of Brij Raman Das and Sons (Supra). 16. Similarly, on the same ratio the Karnataka High Court in the case of Mysodet (Pvt.) Ltd. Vs. 16. Similarly, on the same ratio the Karnataka High Court in the case of Mysodet (Pvt.) Ltd. Vs. Commissioner of Income Tax, (1987) 60 CTR 49 : (1987) 163 ITR 848 and the Patna High Court in the case of Chandmull Rajaria v. C.I.T. (1987) 167 ITR 433 agreed with the aforesaid view of the Full Bench of the Kerala High Court in the case of C.I.T. v. Veeriah Reddiar(Supra) and also agreed with the decision of the Allahabad High Court in the case of Brij Raman Das and Sons v. C.I.T.(Supra). 17. Having given our anxious consideration to the vexed question referred to us, we find that Parliament had an obvious purpose behind the use of the word " in the nature of entertainment expenditure ". The expression is much wider in its connotation as it would take within its sweep not merely what is regarded as entertainment expenditure proper or simpliciter but also all other kinds of expenditure of allied nature partaking of some, if not all, of the characteristics of entertainment expenditure. The said phrase, therefore, has a wide amplitude and its use is a pointer to the Intention of the legislature that it intended to cast the net sufficiently wide so as to bring within its fold all types of hospitality, even though it is modest or frugal also. Sub-sections (2A) and (2B) of Section 37 of the Act begin with a non obstante clause, viz. " not with standing anything contained in Sub-section (1) " and take within their sweep all expenditure which are in the nature of entertainment expenditure incurred by an Assessee. Therefore, whatever the amount of business entertainment expenses may be, the same is subject to the stringent rule laid down in the aforesaid two Sub-sections (2) and (2A). The statute in this connection has left no exception as to whether the expenditure is of high level or moderate or it is a plausible leash. If the provision is construed otherwise, that will defeat the very purpose of the legislature in enacting the aforesaid Sub-sections and defeating the larger legislative intent of curbing entertainment expenditure at the cost of public exchequer. 18. If the provision is construed otherwise, that will defeat the very purpose of the legislature in enacting the aforesaid Sub-sections and defeating the larger legislative intent of curbing entertainment expenditure at the cost of public exchequer. 18. Therefore, after considering the reasoning adopted in the divergent views of the various High Courts in the leading case of Brij Raman Das and Sons taking the view that such an expenditure is not allowable one and the contrary view taken by the Gujarat High Court in the case of C.I.T. v. Patel Brothers and Co. Ltd.(supra) holding that it is only lavish expenditure which is not allowable as business expenditure, we are of the definite opinion that the correct approach to the problem is to take into consideration the legislative history, the intention of Parliament and the significance which the legislature has attached by putting in the words "in the nature of entertainment expenditure" u/s 37(2B) of the Act. In our opinion, these words are of wide import and embrace in their ambit an expenditure which may be similar to entertainment expenditure for the obvious reason that the Legislature intended to curb the expenditure of providing hospitality of any kind at the cost of public exchequer. Further, by the use of the aforesaid words "expenditure in the nature of entertainment expenditure", the Legislature is not presumed to have employed some superfluous words. On the other hand, in our opinion the Legislature bas significantly and expressly used the aforesaid words so as to debar an Assessee from claiming deduction id respect of messing expenses also. We are further of the view that when a matter is covered by an express statutory provision, it is not open to the Court to devise any other rule or method or rely on social attitudes or customs so as to defeat the clear intention of the Legislature. We have not the slightest doubt that any expenditure incurred by an Assessee for messing of its customers falls within the purview of the words "expenditure in the nature of entertainment expenditure" within the meaning of Section 37 (2A) and (2B) of the Act and the Assessee is, therefore, not entitled to claim the same as a deduction. 19. The upshot of the above discussion is that in our considered opinion the case of Commissioner of Income Tax, Gujarat II Vs. Bachubhai Nagindas Shah, (1976) 104 ITR 551. 19. The upshot of the above discussion is that in our considered opinion the case of Commissioner of Income Tax, Gujarat II Vs. Bachubhai Nagindas Shah, (1976) 104 ITR 551. bas been rightly decided and with great respect to the learned Judges of the Gujarat High Court and the High Courts which agree with the said view, we are of the definite opinion that the view taken by that Court in Commissioner of Income Tax, Gujarat II Vs. Patel Brothers and Co. Ltd., (1977) 106 ITR 424. is incorrect in law. 20. Since the operative portion of the Referring Order reads as follows: Let the papers be laid before Hon'ble the Chief Justice for constituting a larger Bench to consider the question as to what meaning is to be given to the words' entertainment expenditure' for the purpose of Section 37 (2A) and (2B) of the Income Tax Act, 1961. Let the papers be now sent back to the Division Bench with our opinion indicated above for decision of the Reference in accordance with law.