TaxTMI 
TaxTMI 
2008 (4) TMI 765
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.... right in law and on facts in holding that the CIT(A) should have entertained the additional ground with regard to expenditure of ₹ 4,14,955 on account of payments made to the suppliers of skimmed milk, when the assessee had claimed the said amount for asst. yr. 1986-87?" 2. The assessment year is 1985-86 and the relevant accounting period is the year ended on 30th June, 1984. In the assessment framed under section 143(3) of the Act, the AO adopted the figure of ₹ 17,36,625 for applying the provisions of section 37(3A) of the Act as being gross expenditure towards the advertisement, publicity and sales promotion. The plea of the assessee that the only amount which could be considered for the purposes of working out the lim....
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....allowed in computing the income chargeable under the head profits and gains from business. What can be allowed as deduction is an amount what is claimed as deduction. If the assessee does not claim the expenditure anywhere either in the return or in a letter same cannot be allowed or disallowed as a deduction. The assessee has claimed an expenditure of ₹ 46,473 only. Therefore, the disallowance if any, has to be considered from this amount only." 5. In relation to the second issue, after setting out the relevant data in para No. 4 of the order, the Tribunal has recorded following findings: "We have given the full details of the dates which are relevant to the issue in question. There is no dispute that the expenditure has....
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....ted an error in referring to and relying upon the provisions of section 37(1) of the Act. According to the learned counsel, once the conditions prescribed in section 37(3B) of the Act were fulfilled, the AO had only to work out and apply the limit and the prescribed percentage laid down in section 37(3A) of the Act without looking at any other provisions of the Act. It was, therefore. urged that the finding of the Tribunal on this count is required to be reversed. 7. In relation to the second issue, Mr. Naik has submitted that the appellate authority was vested with a discretion, whether to admit the additional ground of appeal or not; the appellate authority had exercised such a discretion, and the Tribunal ought not to have interfered wi....
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.... expenditure; (2) not in the nature of personal expenses of the assessee and; (3) laid out or expended wholly and exclusively for the purposes of the business or profession. Therefore, the first question that would arise is as to what is the nature of the claim made by the assessee in the present case. Whether the expenditure under the head of "Advertisement and sales promotion account" is an expenditure qualified for such a deduction? The question of partial disallowance by applying the limit prescribed under section 37(3A) of the Act comes into the play only thereafter. 12. Therefore, the first thing is to determine what is the expenditure claimed by the assessee; is it the gross amount debited to the "Advertisement and sa....
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....no expenditure, there could be no question of making any claim for deduction. In absence of any claim there can be no question, whether the amount is allowable or otherwise. In other words, there cannot be any disallowance of an amount which is not claimed as a deduction. The Tribunal has recorded a finding that the assessee has claimed an expenditure of ₹ 46,473 only; that would be the only amount which would come up for consideration as being allowable or otherwise under section 37(1) of the Act. The scheme of the Act itself envisages that only after amount is determined under section 37(1) of the Act as being allowable and the same falls within any of the specified categories of section 37(3B) of the Act, can the question of partia....