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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 ..... 's sales but for extending general courtesy to business associates has any advertisement value so as to suffer consequence of provision of rule 6B of the Income-tax Rules, 1962?" The appellant-MICO is covered by the income-tax laws. The appellant incurred expenditure in procuring presentation articles for the year ending March 31, 1990, relevant to the assessment year 1990-91. The said articles do not have any advertisement value. It was intended for presentation to business associates for extending general courtesy. It was not considered to be amounting to advertisement for suffering partial disallowance under rule 6B of the Income-tax Rules, 1962. The Department treated such articles also as falling within the scope of rule 6B of the rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is a manufacturer and any reference to the appellant's name in the presentation of the articles would certainly have an advertisement value and that therefore the authorities are justified in the case on hand. After hearing, we have carefully perused the material placed on record. From the material on record, it is seen that the Deputy Commissioner of Income-tax (Asst.) has noticed the tax audit report and the note made thereunder. Thereafter, the Assessing Officer has noticed that the details had to be called statutorily. Ultimately, he disallowed the claim of Rs. 1,69,883 in terms of rule 6B of the Rules. When the same was challenged before the appellate authority, the appellate authority has noticed in para. 10 of the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed- (a) in respect of articles intended for presentation,- (i) where the amount of such expenditure does not exceed Rs. 1,000 on each such article, the whole of such amount; (ii) in any other case, Rs. 1,000 on each such article as increased by a sum equal to 50 per cent, of the expenditure in excess of Rs. 1,000 on such article; (b) in respect of any advertisement outside India involving payment in foreign currency, the amount covered by foreign exchange granted to, or permitted to be acquired by, the assessee for this purpose under the law relating to the foreign exchange for the time being in force. (2)(i) Where the Assessing Officer is of opinion that any expenditure on advertisement of the nature described in clause (ii) is exces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... large company spending lakhs of rupees for advertising expenses. The sum involved is hardly Rs. 1,60,000 and that amount is claimed to be an expense towards gift. Such gift expenses cannot be termed as advertising expenses by the authority in the given circumstances. As a matter of fact, at the time of arguments, Sri Dastur, learned counsel places before us the details of complimentary articles. A reading of the details would show that leather articles, nylon bags, umbrella, glass jugs, etc., were provided as gift articles to the dignitaries. A mere name in the articles does not by itself convert the said gift articles as having any advertisement value in terms of the law governing tax in such matters. On the facts of this case and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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