Gift to foreign customer treated as presentation, so Rule 6B disallowance for advertisement was inapplicable.

Expenditure on a carpet gifted to a foreign customer was treated on the facts as a presentation to a buyer, not as advertisement expenditure. Rule 6B of the Income-tax Rules, 1962 applies only to advertisement-related expenditure, so it was held inapplicable on the facts found. The assessee was therefore entitled to claim the expenditure.

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Issues: Whether expenditure on a carpet gifted to a foreign buyer was hit by Rule 6B of the Income-tax Rules, 1962.

Analysis: The gift of a carpet worth Rs. 3,000 to a foreign customer was found on the facts to be a presentation to a customer and not expenditure incurred on advertisement. Rule 6B applies to advertisement-related expenditure and was therefore inapplicable on the facts found.

Conclusion: The expenditure was not hit by Rule 6B and the assessee was entitled to claim it.

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