TMI Blog1990 (12) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Rs. 11,97,629 Asst. yr. 1985-86 . (1) Sales discount Rs. 1,16,756 (2) Sales commission Rs. 12,085,517 2. Subsequently, invoking the powers vested in him by and under s. 263 of the ITA, 1961, the CIT, Madurai called for and examined the assessment records of the assessee. On such an examination he found that the provisions of s. 37(3A) were applicable to the said payments; that the Assessing Officer failed to apply the provisions of the said section to such payments; and that consequently the assessment orders were erroneous in that they were prejudicial to the interests of the Revenue. He accordingly called upon the assessee to state their objections in this regard. 3. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs. First ITO (1990) 33 ITD 209 (Bom) and (ii) Hindustan Times Ltd. vs. (1990) 33 ITD 427 (Del) and contended that the assessee are entitled to succeed. 8. On his part, Shri K.V. Ananthachari, the learned Departmental Representative, strongly supported the impugned orders of the CIT. Drawing our attention to the submissions made by the assessee in their letters dt. 11th Dec., 1987 and 3rd Feb., 1988 addressed to the Commissioner, Shri K. V. Ananthachari contended that the very onerous nature of the duties performed by the agents would indicate that this was a clear case of sales promotion. Similarly, the allowing of sales discount also promotes sales. Consequently, both the items of expenditure are square hit by the provisions of s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the product whose sales is sought to be promoted. Even so, the focus of such promotional activities is the market as a whole, and not an individual buyer or an individual item of sale. 12. Sales discount/sales commission, on the contrary, are paid when sales actually take place. Here the focus is on a particular sale, a particular buyer. For a fact, the aggregate quantum of discount allowed or commission paid may indeed be a direct measure of the success of the sales promotion drive undertaken earlier. It should, therefore, follow that sales discount/sales commission cannot be brought under the blanket head of sales promotion. 13. In view of the foregoing, therefore, we hold that the CIT was not justified in passing the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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