TaxTMI 
TaxTMI 
2006 (9) TMI 96
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....olding expenses of Rs.1,55,795/- spent on silver vessels, carpets, silver ornaments and other gift items for distribution to the dealers as business expenditure? (ii)Whether on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the disallowance of interest of Rs.2,43,000/- on the ground that there is no direct nexus between the borrowings and interest free advances made to certain parties? (iii) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in directing to consider interest income as forming part of business profits for computing deduction u/s 80HHC? (iv) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in directing t....
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....92-93 and held that expenditure incurred on distribution of gift articles to various dealers was for business consideration as it does promote goodwill among the dealers for the assessee. 5. After hearing the counsel for the parties and also going through the orders passed by the authorities, we are of the view that distribution of gift articles to dealers would certainly fall within the ambit of expenditure for business consideration. The dealers selling the product of a manufacturer are certainly its life line and if some reasonable amount is spent on distribution of some gifts to them that certainly promotes goodwill and enhances business interests, hence, the same cannot, in any way, be termed as entertainment expenditure. In I.T.A.No.....
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....A), the assessee failed. The Tribunal accepted the appeal of the assessee by relying upon its earlier order of the assessment year 1992-93. 8. We have already dealt with an identical issue in the case of Commissioner of Income Tax, Ludhiana v. Abhishek Industries Ltd., Ludhiana, I.T.A. No.110 of 2005, decided on 4.8.2006, wherein it is held that where the assessee is found to have advanced certain sums to sister concerns for non-business purposes and on the other hand is incurring interest liability on various loans raised by it, interest on the loans raised to that extent cannot be held to be for business purposes. Following the reasons recorded therein, we answer the question in favour of the Revenue and against the assessee. Appeal of t....
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....ty per cent of any sum referred to in clause (iiia), (iiib) and (iiic) of section 28 or of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and (2) the profits of any branch, office, warehouse or any other establishment of the assessee situate outside India." 13. As far as question of addition of the amount of interest of the kind received by the assessee for the purpose of computation of business is concerned, in our view, the answer thereto is clearly available in the definition of "profits of the business", contained in clause (baa) of Section 80HHC of the Act, as reproduced above, from where it is evident that "profits of the business" means the p....
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.... would be carried out. This is clear even from what the Tribunal has directed. Accordingly, we do not find any merit in this contention of the Revenue and hold that once the income is assessed as income from business or profession, the same has to be taken as such for the purpose of calculation of profits of the business in terms of clause (baa) of Section 80HHC of the Act after reducing therefrom 90% of the amount, so referred in the clause. Question No. (iv) 15. Regarding question No.(iv), the Assessing Officer found that during the year in question, the assessee had received claim of Rs. 2,57,011/-; written off balance of Rs. 40,098/-; receipt discount of Rs. 33,677/- and other miscellaneous receipts were Rs. 7,24,931/-. Besides this, ....