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2016 (10) TMI 402 - HC - Income TaxExpenditure on free distribution of exercise note books - whether was in the nature of advertisement, publicity and sales promotion within the meaning of subsection (3A) read with subsection (3B) of section 37? - Held that:- The issue stands concluded against the applicant assessee by the decision of Andhra Pradesh High Court in Commissioner of Income Tax Vs. Ampro Food Products [ 1995 (2) TMI 54 - ANDHRA PRADESH High Court ]on identical facts, namely, distribution of note books, the Andhra Pradesh High Court held that the same was in the nature of sales promotion / advertisement. - Decided against assessee. Invoking the provisions of Sec.37(3A) r.w.s. 37(3B) in respect of the expenditure on account of advertisement, particularly in view of the fact that the said expenditure was never claimed by way of deduction - Held that:- Gujarat High Court in Vadilal Industries Ltd. (2008 (4) TMI 765 - GUJARAT HIGH COURT) has held that only the net amount of expenditure on advertisement / sales promotion i.e. gross expenditure less amount recovered by the applicant / assessee from its dealer can be considered for disallowance under Section 37(3A) of the Act. It also observed that where no claim for expenditure under Section 37 of the Act is made then no disallowance under sub-Section (3A) of Section 37 of the Act can be made. The question as posed for our opinion itself records as a fact, that no expenditure was claimed by the applicant assessee in respect of the advertisement expenses sought to be disallowed under Section 37(3A) of the Act.- Decided against revenue
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