TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>High Court Allows Full Deduction for Sales Promotion Expenses, Emphasizes Business Expediency</h1> <h3>Duncans Tea Ltd. Versus Commissioner of Income-tax</h3> Duncans Tea Ltd. Versus Commissioner of Income-tax - [2012] 344 ITR 442 Issues:Disallowance of 50% sales promotion expenses for free distribution of gift articles in assessment years 1990-91 and 1991-92.Analysis:The appellant, engaged in tea business, incurred sales promotion expenses by distributing gift articles like detergent, soaps, and ball pens to customers. The Assessing Officer disallowed 50% of the claimed deduction for the cost of gift articles, but the Commissioner of Income-tax (Appeals) allowed the entire amount after finding the expenditure genuine. The Tribunal, however, reversed the decision, leading to the appeal. Dr. Pal argued that the appellant had proven the purchase and utilization of gift articles for business promotion, emphasizing the business expediency of the expenses. He highlighted that the Revenue authorities should not judge commercial expediency, citing Supreme Court decisions. The High Court noted that commercial expediency was understood by the authorities, and the deduction was allowed partially based on business expediency.The Tribunal erred in upholding the Assessing Officer's decision without considering the evidence presented by the appellant. Dr. Pal pointed out that in the earlier assessment year, evidence of purchase and utilization of gift articles was lacking, unlike the current year where such evidence was established. The High Court agreed that the facts differed between the years, and the appellant had provided sufficient proof of purchase and utilization of gift articles for business purposes. The Tribunal's decision was deemed unsustainable, and the Commissioner of Income-tax (Appeals) order was restored, allowing the full deduction for the gift articles.In conclusion, the High Court set aside the Tribunal's decision, restoring the Commissioner of Income-tax (Appeals) order without imposing costs on either party. The judgment emphasized the importance of proving business expediency and the utilization of expenses for business growth, ensuring that commercial decisions are understood from a businessman's perspective rather than solely from a tax authority's viewpoint.
TaxTMI 