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TMI Blog2005 (3) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 out of the aforesaid appellate order: "1. Whether the Tribunal erred in law in maintaining disallowance on account of advertisement and sale promotion expenses without appreciating the facts and circumstances of the case and by ignoring the decision of the Supreme Court and jurisdictional High Court relied on by the appellant? 2. Whether on the facts and in the circumstances of the case, the advertisement and sales promotion expenses incurred by the appellant for the purpose of business were rightly disallowed by the Tribunal ignoring past practice?" Heard Shri S.C. Bagadia, learned senior counsel wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in its disallowance against the assessee. Having heard learned counsel for the parties and having perused the record of the case, we are of the opinion that the questions referred to this court have to be answered in favour of the assessee and against the Revenue. Section 37(1) of the Act permits the assessee to claim any expenditure by way of deduction in computing the income chargeable under the head "Profits and gains of business or profession". Section 37 reads as under: "37. General.- (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filled the criteria laid down in section 37(1) for claiming deduction. In other words, the expenditure incurred by the assessee is essentially and/or exclusively relates to their business. Any expenditure incurred for advertisement of bidi and/or for promoting its sale, then in such case, it has to be so regarded as an expenditure incurred for business carried on by the assessee. It being an admitted fact that the assessee is engaged in the business of purchase and sale of bidi and secondly, the amount in question having been actually spent i.e., incurred by the assessee for their bidi business, they are entitled to claim deduction of the amount so spent/incurred in the relevant assessment years. In our opinion, once the aforementioned con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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