TMI Blog2005 (3) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... promotion for the purpose of business are allowable deductions under section 37 - - - - - Dated:- 7-3-2005 - Judge(s) : A. M. SAPRE., ASHOK KUMAR TIWARI. JUDGMENT The judgment of the court was delivered by A.M. Sapre J.- The decision rendered in this reference shall also govern the disposal of reference being I.T.R. No. 7 of 2000, as both the references involve identical points. This is an income-tax reference made under section 256(1) of the Income-tax Act at the instance of the assessee by the Tribunal (the ITAT) in R.A. No. 135/136/Ind/97, dated March 13, 2000, which in turn arise out of an appellate order dated September 1, 1997, passed in I.T.A. No. 917/918/ Ind/93 to answer the following two questions of law said to arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the Tribunal to refer to the aforementioned two questions at the instance of the assessee. The assessee is a firm. It is engaged in the business of purchase and sale of bidi in Indore. The assessee claimed in two assessment years the aforementioned sum by way of expenditure incurred in advertisement and sales promotion. In the opinion of the Assessing Officer, it was not incurred for the legitimate need of business of the firm and hence, the Assessing Officer disallowed the expenditure. This view was reversed by the Commissioner of Income-tax (Appeals) but it was again restored by the Tribunal resulting in its disallowance against the assessee. Having heard learned counsel for the parties and having perused the record of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed in computing the income chargeable under the head "Profits and gains of business or profession". In other words, to be an allowable expenditure within these provisions, the money paid out or away must be (a) paid out wholly and exclusively for the purpose of the business or profession and further (b) must not be (i) capital expenditure, (ii) personal expense, or (iii) an allowance of the character described in sections 30 to 36 (for the assessment years 1976-77 to 1985-86) and section 80VV. When we apply the aforesaid requirement of section 37(1) to the case of the assessee in hand, we notice that they have fulfilled the criteria laid down in section 37(1) for claiming deduction. In other words, the expenditure incurred by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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