Judgment :- K. A. THANIKKACHALAM J. At the instance of the Department, the Tribunal referred the following question of law for the opinion of this court under section 256(1) of the Income-tax Act, 1961. "Whether the Tribunal's finding that the sum of Rs. 23, 350 being the expenditure incurred towards supply of soft drinks to the customers cannot be treated as entertainment expenditure and disallowed under section 37(2A) of the Income-tax Act, 1961, is sustainable in law ?" * The assessee had claimed a sum of Rs. 23, 350 as entertainment expenditure to customers. On the assessee's appeal, the Commissioner of Income-tax (Appeals) held that these expenses being incurred in supplying soft drinks, etc., to the customers, should be allowed in view of this court's decision in CIT v. Karuppuswamy Nadar and Sons 1979 (120) ITR 140, 1979 (2) TAXMAN 577 Aggrieved, the Department filed an appeal before the Tribunal. The Tribunal agreed with the view taken by the Commissioner of Income-tax (Appeals). According to the Tribunal, the expenditure was incurred for supply of soft drinks to customers, who were visiting the branches and that such expenditure was not of lavish nature and could not be described as entertainment expenditure Before us, learned standing counsel appearing for the Department relied upon the amendment introduced by the Finance Act, 1983 1995 AIR(SC) 1829, 1995 (215) ITR 165, 1995 (5) JT 364 , 1995 (3) Scale 650 , 1995 (4) SCC 485 , 1995 (126) CTR 132, 1995 (81) TAXMAN 156, 1995 UPTC 1149, 1995 (126) CTR(SC) 132. However, learned counsel for the assessee submitted that in view of the amendment the matter may be remitted back to the Tribunal so as to enable the assessee to get deduction with regard to the entertainment expenditure incurred to its employees. According to learned counsel, when the soft drinks were served to the customers at branches the employees of the company were also entertained and, therefore, a portion of the expenditure is relatable to the entertainment expenditure, incurred to its employees, which is not lavish in nature. But, according to the facts arising in this case, the assessee claimed a sum of Rs. 23, 350 being the expenditure incurred towards the supply of soft drinks to the customers. Therefore, in the absence of facts on record, it is not possible to issue the direction as requested by learned counsel for the assessee. But, according to the facts arising in this case, the assessee claimed a sum of Rs. 23, 350 being the expenditure incurred towards the supply of soft drinks to the customers. Therefore, in the absence of facts on record, it is not possible to issue the direction as requested by learned counsel for the assessee. Accordingly, we hold that the Tribunal was not correct in coming to the conclusion that the expenditure incurred towards the supply of soft drinks to the customers cannot be treated as entertainment expenditure and disallowed under section 37(2A) of the Act. Accordingly, we answer the question referred to us in the negative and in favour of the Department. No costs.