TMI Blog1988 (2) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... . 50 each 1,20,921 3. Glasses purchased from Black Diamond Glass 2,132 doz. at the rate of Rs. 23/20.10 per doz. 50,658 ----------------- 1,74,853 ----------------- (There is an item of Rs. 80,000 which was originally included under this head, but it was agreed eventually that this sum of Rs. 80,000 was covered by section 37(3) of the Act.) The assessee claimed deduction of the aforesaid sum in its entirety while computing its income for the assessment year under consideration. The Income-tax Officer held that the expenditure being an expenditure on advertisement, publicity and sales promotion, it is liable to be governed by the limits specified in section 37(3) of the Act read with rule 6B of the Rules. The Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal and accordingly sought a reference to this court of the following question of law: " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the advertisement expenditure falling under section 37(3) of the Income-tax Act read with rule 6B of the Income-tax Rules does not come within the ambit of the words 'aggregate expenditure' or 'adjusted expenditure' within the meaning of section 37(3A) of the Income-tax Act, 1961? " We have heard standing counsel for the Revenue and Sri A. Satyanarayana, learned counsel for the assessee. Having carefully looked into the provisions, we feel that the stand taken by the Income-tax Commissioner and the Income-tax Officer is correct an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggregate expenditure does 10% of the adjusted not exceed 1/4 per cent. of the turnover or, as the expenditure; case may be, gross receipts of the business or profession (ii) where such aggregate expenditure exceeds 12-1/2% of the adjusted 1/4 per cent. but does not exceed 1/2 per cent. of expenditure; the turnover or, as the case may be, gross receipts of the business or profession (iii) where such aggregate expenditure exceeds 15% of the adjusted 1/2 per cent. of the turnover or, as the case may be, expenditure. gross receipts of the business or profession Explanation.-For the purposes of this sub-section, (a) 'adjusted expenditure' means the aggregate expenditure incurred by the assessee on advertisement, publicity and sales prom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tyanarayana, learned counsel for the assessee, is that as far as the expenditure quantified under section 37(3) read with rule 6B is concerned, it is not subject to any further limitation under section 37(3A), as is evident from the use of the expression in section 37(3A) to the effect that it is without prejudice to the provisions contained in section 37(3). Mr. Satyanarayana, therefore, contends that the entire extent of expenditure which is allowable under section 37(3) read with rule 6B should be allowed and it should not be subject to the further limitation specified in section 37(3A) of the Act. We are unable to agree. The further limitation specified in section 37(3A) are without prejudice to the provisions contained in section 37(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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