TaxTMI 
TaxTMI 
1994 (4) TMI 119
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....urchased "gold dollars" (gold medallions carrying the likeness of Gods and Goddesses) and distributed them to its clients as and by way of trade discount. He disallowed the assessee's claim for revenue deduction in respect of the said sum observing : "There is no provisions in the Act the payment of discount in the form of gold dollars could to be allowable and therefore the claim is disallowed". 3. On his part, the CIT(A) allowed the assessee's claim. In this regard he found that the discount in the form of gold medallions ranging in weight from 2 gms. to 4 gms. each were given by the assessee to its clients as and by way of trade discount; and that the aggregate value of the gold medallions purchased was Rs. 2,00,435.65, the rest of the ....
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....egate expenditure of Rs. 2,00,435 incurred by the assessee in purchasing the gold medallions should be treated as sales promotion expenses and on that basis brought under the pale of the provisions of section 37(3A) of the Act. 5. On his part, Shri V.S. Jayakumar, the learned counsel for the assessee, strongly supported the impugned order of the CIT(A). He drew our attention to the fact that the excerpts from the commentary of Chaturvedi & Pithisaria are to be found in page 1490 (last para) of the 4th Edition of the said Commentary. It has been clearly stated therein that a business expenditure can also be in kind. Further, as has been rightly held by the CIT(A), the quantum of the expenditure incurred by the assessee in distributing the g....
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....5. We do not find any reason to interfere with the line adopted by the CIT (Appeals). 9. This brings us on to the contention of the learned Departmental Representative that the outlay in question must be treated as sales promotion expenses, and as such brought under the pale of the provisions of section 37(3A) of the Act. We are unable to agree. First, the CIT (Appeals) has recorded a finding that in the case before us the assessee had given trade discount in kind. He also found that the quantum of the outlay on such trade discount in kind was reasonable, if regard be had to the fact particularly that the assessee in its turn had received larger quantum of discount from the manufacturer of the pesticides. But as we see it, cash discount, t....