Commission paid to sales agents treated as selling cost, leaving no referable question of law on section 37(3A) disallowance.

Commission paid to sales agents was treated as selling cost rather than advertisement, publicity, or other sales promotion expenditure, so it fell outside the disallowance under section 37(3A) of the Income-tax Act, 1961. The Tribunal's view rested on a factual finding that the payments were not unproductive expenditure and were part of ordinary selling expenses. Because the proposed reference turned essentially on that factual determination, no referable question of law arose and the request for reference was declined.

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Issues: Whether a referable question of law arose from the Tribunal's finding that commission on sales paid by the assessee was not sales promotion expenditure and was outside the disallowance under section 37(3A) of the Income-tax Act, 1961.

Analysis: The Tribunal had upheld deletion of the disallowance on the basis that the commission paid to agents was not advertisement or publicity expenditure, was not in the nature of unproductive expenditure, and formed part of the selling cost. The question sought to be referred depended essentially on that factual finding. As the conclusion reached was one of fact, no referable question of law arose for reference.

Conclusion: No referable question of law arose and the request for reference was declined.

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