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2014 (5) TMI 817 - AT - Income TaxDisallowance u/s 37 of the Act - Sale promotion expenses – Held that:- The assessee has not paid any royalty for availing services of BAIL for promotion of its products and the BAIL being pioneers in Pasta, Macroni and other instant food products` in India and they have rendered services to assessee in marketing assessee’s product - BAIL is in the business since 25 years and comparison of assessee to BAIL is not at all feasible – The lower authorities have not brought any record to establish the falsity of the assessee's claim with regard to the services rendered by the marketing agents in question - the matter has to be looked from businessman's point of view and in the absence of any material brought on record, it is not fair and proper to allege diversion of funds by the assessee or question the engagement of marketing agents by the assessee on grounds of commercial expediency - Payment of sales promotion expenses by the assessee to BAIL cannot be doubted and it is to be allowed in toto – the order of the CIT(A) is set aside and the AO is directed to set aside the disallowance made on account of sales promotion expenses paid by the assessee to BAIL – Decided in favour of Assessee.
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