9911796707
TMI Blog2010 (4) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... advertisement must not exceed the pecuniary limit specified. - an article for presentation meant for sale promotion would not attract the application of Rule 6B and cannot on that count qualify for disallowance. - 15 of 2002 - - - Dated:- 26-4-2010 - CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Ms. Urvashi Dhugga, Advocate for the appellant-Revenue. Mr. Pankaj Jain, Advocate, for the respondent-assessee. M.M. Kumar, J. The Revenue has approached this Court by invoking Section 260A of the Income Tax Act, 1961 (for brevity 'the Act') challenging the order dated 19.04.2001 passed by the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for brevity 'the Tribunal) in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee-respondent has claimed expenditure of Rs. 1,05,306/- on account of export promotion, publicity expenses and advertisement outside India. Another sum of Rs. 37,933 was also claimed for article presented or intended for presentation where expenditure on each article had exceeded Rs. 50/-. The Assessing Officer held that expenses on these articles cannot be held fully exclusively for business purposes as the logo or name of the company was not inscribed on all the items. The Assessing Officer in his order dated 23.03.1990 has expressed following view on the aforesaid issue: "The expenses on these article cannot be held fully exclusively for business purpose as the logo or name of the company was not inscribed on all the items. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that the expenditure incurred on the gift items could not have been disallowed under Rule 6-B. In that regard reliance has been placed on a judgment of the Tribunal in the case of Himachal Pradesh Agro Industries Corp. Ltd., Khalini Shimla vs. IAC (Assessment) rendered in ITA No. 638 and 709 in respect of assessment year 1984-85. The CIT(A) directed that the expenditure incurred on gift items, which did not contain any logo or reference to company's name were to be allowed in full. On further appeal to the Tribunal, order of the CIT(A) has been upheld on the ground that issue was covered in favour of assessee vide order dated 15.03.1994 passed by the Tribunal in assessee's own case for the assessment year 1981-82 rendered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to the legitimate business needs of the assessee and the benefit derived by or accruing to him therefrom, that portion of the expenditure which is so considered by him to be excessive or unreasonable shall not be allowed as a deduction in computing the total income; (ii) the expenditure referred to in clause (i) is that incurred on advertisement involving payment- (A) to a person (including in the case of a company, firm, an association of persons or a Hindu undivided family, a director, partner or member, as the case may be, of such company, firm, association or family) who has a substantial interest in the business of the assessee, or to a relative of such person; or (B) to a person who carries on the business of, or professio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was so made. Explanation: For the purpose of this rule,- (i) "relative" shall have the meaning assigned to it in clause (41) of section 2; (ii) a person shall be deemed to have a substantial interest in a business or profession, if- (a) in a case where a business or profession is carried on by a company, such person is the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits, carrying not less than twenty per cent of the voting power; and (b) in any other case, such person is beneficially entitled to not less than twenty per cent of the profits of such business or profession. A close scrutiny of the Rule would show that the it str ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
