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TMI Blog1997 (8) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is engaged in the manufacturing of drugs and medicines, on literature and related matters constitutes advertisement expenditure. 2. The assessee is a private limited company and engaged in the manufacture of drugs and medicines. During the course of assessment proceedings, the AO noted that the assessee had incurred an expenditure of Rs. 1,57,149 on literature which was distributed to doctor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Hon'ble Karnataka High Court in the case of Smith Kline & French (India) Ltd. vs. CIT (1991) 97 CTR (Kar) 47 : (1992) 193 ITR 582 (Kar) he held that these expenses were incurred towards advertisement/publicity and sales promotion and consequently, the restrictive clause of s. 37(3A) was held applicable. He, accordingly, disallowed the amount of Rs. 1,57,149. 3. On appeal, the CIT(A) delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted free of cost and there was no other motive but to promote the sales of the products of the company. He submitted that the case of the assessee was squarely covered by the ratio of the Karnataka High Court in the case of Smith Kline & French (India) Ltd. 4.1 Shri S.N. Soparkar, the learned counsel for the assessee supported the order of the learned CIT(A). He produced before us some of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd. (1997) 140 CTR (AP) 577 : (1996) 222 ITR 11 (AP). 5. We have considered the rival submissions and perused the facts on record. One of the essential characteristics of advertisement or for that matter sales promotion will be to make available information about the product to maximum number of persons or public at large. The act of advertising means any device for obtaining public favour or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.1 As regards the Revenue's reliance on the judgment of the Hon'ble Karnataka High Court in the case of Smith Kline & French (India) Ltd., the same is not applicable to the case of the assessee as, in our view, the facts in that case were distinguishable from the facts of the case before us. In that case, the expenditure was incurred on physicians samples; whereas in the case before us the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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