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TMI Blog1997 (9) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer as per provisions of section 37(3A)/37(3B) and confirmed by the Commissioner of Income-tax (Appeals) could not be disallowed simply because the expenses were incurred on publicity, propaganda and vehicle maintenance on directives of the State Government? (2) Whether, on the facts of the case, the Tribunal was justified in law to hold that simply because the expenditures were incurred as per directives of the State Government, they did not partake of the character of sales promotion in so far as the assessee is concerned?" The assessee is the M. P. State Handloom Weavers' Co-operative Society, Jabalpur. The assessee incurred expenses of Rs. 6,78,177 towards propaganda, publicity and van expenses. The Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty and propaganda. The contention of the Revenue is that since this amount was in the nature of publicity and propaganda, it is taxable in terms of section 37(3A) and section 37(3B) of the Income-tax Act and accordingly an amount of tax to the extent of Rs. 1,15,625 was levied. Learned counsel for the Revenue submits that since publicity was undertaken by the society, therefore, it is liable to be assessed in terms of section 37(3A) and section 37(3B) of the Income-tax Act. As against this, learned counsel for the assessee submitted that so far as the income of the society is concerned, it is totally exempted under section 80P of the Income-tax Act, and whatever expenditure for publicity, etc., had been incurred was in pursuance of the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (i) in case of a committee, proceed against such committee in accordance with the provisions of section 53; and (ii) in case of a person, if the person is a member of committee of the society or an employee of the society, proceed against such person in accordance with the provisions of section 53B or the rules framed under sub-section (1) of section 55 as the case may be." As per the provisions of section 49C of the M. P. Co-operative Societies Act, a co-operative society is bound to comply with the directions given by the State Government and in case the said directions are not complied with, then action can be initiated against it by the Registrar of Co-operative Societies, even to the extent of supersession of the committee of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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