TMI Blog1996 (11) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... ame for many decades. Substantial amounts were spent by the assessee on popularising the medicines manufactured by it including the famous Boroline. During the relevant year, as part of the propaganda and publicity programme in respect of Boroline, the assessee engaged a popular artist by name Smt. Sanu Lahiri of Calcutta for the purpose of sculpting a statue for installation of the same at the intersection of the Park Circus and the Eastern Metropolitan Bypass. There is a traffic island at the inter-section in which the statue was to be installed. The necessary permission for installing the statue and making use of the traffic island was obtained from the Calcutta Metropolitan Development Authorities. Accordingly, the statue was made, fitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profit earning process. He, therefore, disallowed the same. 4. On appeal, the disallowance was confirmed on the ground that the expenditure was only for the beautification of Calcutta and publicity and propaganda of Boroline was only a remote possibility. The CIT(A) further held that in any event the expenditure enhanced the goodwill of the company which was an advantage of an enduring nature. 5. In the further appeal it is contended on the basis of the judgment of the Bombay High Court in the case of National Organic Chemical Industries Ltd. v. CIT [1993] 203 ITR 410 that the expenditure was allowable as propaganda and publicity expenses incurred in respect of Boroline. On behalf of the revenue heavy reliance is placed on the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isements facilitate the carrying on of the business. The mere fact that the expenditure also enhanced the beauty of the city is no ground to hold that it did not have any publicity or propaganda value. The decision of the Rajasthan High Court in the case of CIT v. Kamal Co. [1993] 203 ITR 1038 is also in favour of the assessee. There an expenditure in respect of a construction of a fountain in Urban Improvement Trust Circle, Jaipur was claimed as advertisement expenses. The High Court held that the expenditure was incurred for construction of a fountain which resulted in the beautification of a traffic island and at the same time the name of the firm and the line of business carried on by it also got advertised. The High Court, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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