TMI Blog1997 (10) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... not fall within the expression 'advertisement, publicity and sales promotion' which appear in s. 37(3A) of the IT Act, 1961? (2) Whether the Tribunal was right in law to hold that the expenditure even if of the nature of sales promotion, were not of the nature of advertisement and publicity and hence, could not be said to be expenditure to which provision of s. 37(3A) and 37(3B) of the Act could be applied? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the order under s. 263 dt. 25th March, 1988?" 2. The brief facts giving rise to this reference are that the assessee is a manufacturer of bidies. The assessment order dt. 4th April, 1986 for the asst. yr. 1984-85 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dt. 19th Jan., 1993 allowed the appeal of the assessee. The Tribunal, after considering the matter under s. 37 (3A) of the Act by a reference to the decision of the Calcutta High Court in CIT vs. Hindustan Motors Ltd. (1991) 192 ITR 619 (Cal) : TC 16R.1195, held that the expression 'sales promotion' must be construed ejusdem generis with the earlier expression 'advertisement and publicity' and also held that the CIT(A) was in error in holding that the AO should have in the original assessment considered the amount of Rs. 18,20,682 for disallowance under s. 37(3A) of the Act. The order of the CIT(A) was also cancelled and accordingly, dismissed the appeal as infructuous because the Tribunal has set aside the order of the CIT(A) passed by und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e general words and then the general words normally take its colour and contents from the particular words. Applying this principle, the High Court, Calcutta held that the payment made by the assessee to the commission agents will not fall either in the category of advertisement and publicity. However, a Circular No. 240 dt. 17th May, 1978, which has been reproduced in the case of Hindustan Motors Limited (supra), reads as under: "Circular No. 240, dt. 17th May, 1978. Subject: The Finance Act, 1978- Explanatory notes on the provisions relating to direct taxes...... 12.1 Disallowance of a part of expenditure on advertisement, publicity and sales promotion : Sec. 37(3A) to (3D).-In order to place a curb on extravagant and socially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any newspaper for recruitment of personnel; (iii) the publication in any newspaper of any notice required to be published by or under any law; (iv) the maintenance of any office for the purpose of advertisement, publicity or sales promotion; (v) the payment of salary [as defined in cl. (1) of s. 17] to any employee engaged in advertisement, publicity or sales promotion; (vi) the holding of, or the participation in any press conference, sales conference, trade convention, trade fair or exhibition; (vii) publication and distribution of journals, catalogues or price lists; (viii) such other items as may be prescribed by rules framed by the CBDT...... 12.4 As the terms 'publicity' and sales promotion have a wide amplitude, e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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