TMI Blog2001 (11) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 256(1) of the Income-tax Act, 1961. The Tribunal has referred the following two questions in the petition filed by the Revenue: "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in allowing weighted deduction on miscellaneous expenses of Rs.25,70,195 which included salary and other establishment expenses? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that the expenses on account of commission paid to the agents/marketing organisers amounting to Rs.6,13,578 and Rs.10,33,787 being turnover discount paid to the distributors are not to be taken into account for the purpose of disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that only 20 per cent. of the expenses out of Rs.26,34,060 under the head 'Miscellaneous expenses' can be considered for the purpose of weighted deduction under section 35B? 3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that sum of Rs.60,571 received by the appellant on transfer of assessee's right to import entitlements against export, is a revenue receipt?" Mr. B.S. Gupta, learned counsel for the assessee, has stated at the outset that he does not press questions Nos. 2 and 3 as referred by the Tribunal. Resultantly, he accepts the order passed by the Tribunal. So far as question No. 1 as raised by the Revenue and the assessee, respectively, is concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee pay anything for sales promotion so as to disentitle it to the claim as allowed by the Tribunal? Admittedly, the provisions of section 37(3A) of the Act place an embargo on the expenses incurred on the advertisement, publicity and sales promotion. This would mean that the expenses claimed by an assessee in connection with the advertisement, etc., have to be scrutinised and reduced in accordance with the slab prescribed in section 37(3A) of the Act. However, a discount allowed by an assessee to an agent is not an expense in connection with the publicity or advertisement, etc. It is an amount forgone by the assessee in favour of the dealer for effecting the actual sale. It is not like the fashion show conducted by a garment manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. [1996] 222 ITR 30 (Ker); CIT v. Popular Automobiles Ltd. [1995] 212 ITR 611 (Ker); CIT v. Bata India Ltd. [1993] 201 ITR 884 (Cal); CIT v. The Statesman Ltd. [1992] 198 ITR 582 (Cal); CIT v. Sutlej Cotton Mills Ltd. [1992] 194 ITR 66 (Cal); CIT v. Hindusthan Motors Ltd. [1991] 192 ITR 619 (Cal) and CIT v. Santosh Agencies [1994] 210 ITR 78 (Cal), However, it does not appear to be necessary to examine these cases in detail in view of the factual position as noticed above. Thus, we hold that the claim made by the Revenue cannot be sustained. The second question is accordingly answered against the Revenue and in favour of the assessee. In view of the above, so far as question No. 1 in Income-tax Reference No. 48 of 1986 is concerned, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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