Judgment :- C.N. Ramachandran Nair, J. Of the several questions on which notice is ordered in the appeal filed by the Revenue, the issue covered by first three questions is decided in favour of the assessee by judgment of this court in COMMISSIONER OF INCOME TAX V. NEDUNGADI BANK LTD. (2003) 264 ITR 545. Similarly, question Nos.4 to 7 stand decided in favour of the assessee in assessees own case for earlier years vide judgment in I.T.A. No.73/3001. Following these judgments we answer questions 1 to 7 in favour of the assessee and against the Revenue. 2. The last question raised in the appeal filed by the Revenue is whether the Tribunal was justified in allowing deduction of Rs.1,51,576/- representing value of gifts and souvenirs given by the assessee to the shareholders who participated in the annual general body meeting. Senior Standing counsel appearing for the department contended that the finding of the Tribunal that expenditure is incurred in the course of business does not justify deduction under Section 37(1). According to him, items of expenditure incurred for the purpose of business only are deductions allowable under the Act. Complements given to shareholders who participate in the general body meeting is not a business purpose is the argument of the counsel. However, Senior counsel Sri. P. Balachandran appearing for the assessee contended that complements are given as an incentive to the shareholders to participate in the general body meeting and annual general body meeting is a statutory meeting which the company is bound to hold to carry on business. We are in agreement with this contention because annual general body meeting is a statutory meeting which the assessee is bound to hold to get approval of the accounts of the company. The scheme of functioning of public limited company is democratic and shareholders participation in the annual general body meeting is something to be ensured by the company. It is a well known fact that most of the shareholders do not attend annual general body meeting, defeating the very purpose of such meeting provided under the Companies Act. However, if souvenirs or complements are offered to shareholders, the same may certainly be an incentive for them to attend every meeting. Moreover, we find that the total expenditure incurred is Rs.1,51,576/- which is quite insignificant compared to the turnover and profit of the company. However, if souvenirs or complements are offered to shareholders, the same may certainly be an incentive for them to attend every meeting. Moreover, we find that the total expenditure incurred is Rs.1,51,576/- which is quite insignificant compared to the turnover and profit of the company. We are of the view that value of small gifts given to shareholders to attend annual general body meeting is an allowable deduction because such gifts are given only to attract shareholders to attend meetings of the company. We, therefore, uphold the order of the Tribunal and dismiss the departments appeal.