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TMI Blog2006 (7) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... elf convert the said gift articles as having any advertisement value in terms of the law governing tax in such matters. - authorities are not correct in disallowing this claim. - we deem it proper to answer this question in favour of the assessee. - - - - - Dated:- 21-7-2006 - Judge(s) : R. GURURAJAN., JAWAD RAHIM. JUDGMENT The judgment of the court was delivered by R. Gururajan J.- Motor Industries Company Limited (for short "MICO"), is before this court seeking an answer to the following question of law on the following facts: "Whether, on the facts and in the circumstances of the case, the value of presentation articles bearing the name of the appellant company, despite not being intended for distribution, for promoting or boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in the case on hand. Heard Sri Dastur, learned senior counsel appearing for the appellant-company. He referred to us section 37 of the Income-tax Act and also rule 6B of the Rules in support of his submissions. He says that the material facts would show that the expenses incurred by the company cannot said to be for advertisement as held by the authorities. It was not the intention of the company to advertise by way of such presentation by way of request to its business associates. He therefore, wants the question of law to be decided in his favour. Per contra, Sri Seshachala, learned counsel supports the order by contending that necessary details were not provided with reference to the articles presented by the appellant-company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel, we have seen section 37(3) of the Income-tax Act. Section 37(3) as it stood then would read as under: "Notwithstanding anything contained in sub-section (1), any expenditure incurred by an assessee after the 31st day of March, 1964, on advertisement or on maintenance of any residential accommodation including any accommodation in the nature of a guest-house or in connection with travelling by an employee or any other person (including hotel expenses or allowances paid in connection with such travelling) shall be allowed only to the extent, and subject to such conditions, if any, as may be prescribed." Rule 6B reads as under: "Expenditure on advertisement.- The allowance in respect of expenditure on advertisement shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and also it involves several factors including the person to whom it is presented, how it is presented and when it is presented. For instance, if a company manufactures a particular consumable article, if it starts presenting the same with its emblem and name in a large gathering to a large people, then it may amount to an advertisement in a real sense. Presentation of an article with the name of the company to a dignitary or a V.I.P. would not by itself amount to an advertisement as held by the authority. Unless sufficient accepted materials are forthcoming with regard to the details of advertising nature a gift made to a dignitary or a V.I.P. cannot be categorised as advertisement as sought to be held by the authority. Moreover, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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