9911796707
TMI Blog1985 (4) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... there was evidence on record regarding the weight of each glass to be 114 gms. and the fact that the alleged purchase bills of the glasses were produced only before the AAC and the ITO was not afforded any opportunity to examine these bills, as also the fact that a sum of Rs. 25,074 had already been allowed by the ITO by way of advertisement expenses, the Income-tax Appellate Tribunal was justified in holding that the sum of Rs. 98,701 claimed as sales promotion expenses was an admissible expenditure in the computation of the assessee's total income for the assessment year 1973-74 ? " The assessee-respondent is a firm. The assessment year in question is 1973-74. The assessee-respondent derives income from sales of voiles as agent of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding recorded by the Tribunal in its order is a finding of fact and so no question of law would arise out of its order. This has led to the filing of the application under s. 256(2) of the Act. We have heard Mr. J. L. Daga, learned counsel for the Revenue, in support of the application under, s. 256(2) of the Act. It may be stated here that Mr. B. R. Arora, who has filed power on behalf of the assessee on October 25, 1979, pleaded no instructions and did not participate during the hearing of the reference application. The only question before us at this stage is whether the order of the Tribunal rejecting the reference application under s. 256(1) of the Act by its order dated December 29, 1978, is correct on the ground that no questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) where such aggregate expenditure 10 per cent. of the adjusted does not exceed 1/4 per cent. of the turnover expenditure ; or, as the case may be, gross receipts of the business or profession. (ii) where such aggregate expenditure 12 1/2 per cent of the adjusted exceeds 1/4 per cent. but does not exceed expenditure ; 1/2 per cent. of the turnover or, as the case may be, gross receipts of the business or profession (iii) where such aggregate expenditure 15 per cent. of the adjusted exceeds 1/2 per cent. of the turnover or, expenditure." as the case may be, gross receipts of the business or profession According to s. 37(3) of the Act, expenditure on advertisement incurred wholly and exclusively for the purpose of the business is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such assessee or such director, partner or member, has a substantial interest in the business or profession of that person." The ITO, as is apparent from his order dated March 11, 1976, disallowed the expenditure of Rs. 98,701 on the ground that a sum of Rs. 25,704 has already been allowed to the assessee as advertisement expenditure. After applying the tests, he was of the opinion that the value of each glass of 114 gms. which was distributed among the customers of the assessee exceeded Rs. 50, which is not permissible under the Rules. He was further of the opinion that the business of the assessee never necessitated such heavy expenditure of Rs. 98,701. On appeal, the AAC reversed the aforesaid findings after considering the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture of Rs. 98,701 in question was incurred wholly and exclusively for the purpose of the business and it was rightly allowed by the AAC. The finding recorded by the AAC which have been confirmed by the Tribunal as is clear from the excerpted portion of the order of the Tribunal, in our opinion, are findings of fact and nothing was pointed out by the learned counsel for the Revenue to show that these findings, though of fact, stand vitiated on account of the reason that there is no material on record to support the findings or that they are perverse or that they are based on irrelevant and extraneous considerations. The question that has been suggested by the Commissioner in his application under s. 256 (2) of the Act, except that whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng bestowed our best consideration to the submissions made by the learned counsel for the Revenue, we are of the considered opinion that no question of law arises out of the Tribunal's order dated June 15, 1978, and that the Tribunal was right in rejecting the application under s. 256(1) of the Act. The decision rendered on the application under s. 256(1) of the Act cannot be said to be incorrect.
As no question of law arises out of the order dated June 15, 1978, passed by the Tribunal, we decline to give any direction to the Tribunal to refer the question of law proposed by the Commissioner of Income-tax in para. 5 of the application.
The application under s. 256(2) of the Act is dismissed. There will be no order as to costs. X X X X Extracts X X X X X X X X Extracts X X X X
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