2001 (11) TMI 32

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....dated April 12, 1985. Both sides were still not satisfied. They approached the Tribunal with petitions under section 256(1) of the Income-tax Act, 1961. The Tribunal has referred the following two questions in the petition filed by the Revenue: "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in allowing weighted deduction on miscellaneous expenses of Rs.25,70,195 which included salary and other establishment expenses? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that the expenses on account of commission paid to the agents/marketing organisers amounting to Rs.6,13,578 and Rs.10,33,787 being ....

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....;                       1,23,875      (ii) Wooden cases                                     88,422     2,12,297 (c) Interest on export promotion                                      2,74,877 (d) Bank charges for bid board and ....

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.... raised by the Revenue and the assessee, respectively, is concerned, counsel for the parties are agreed that in view of the rule enunciated by their Lord ships of the Supreme Court in CIT v. Stepwell Industries Ltd. [1997] 228 ITR 171 and CIT v. Hero Cycles Pvt. Ltd. [1997] 228 ITR 463, the order of the Tribunal has to be set aside and the case has to be remanded for a fresh decision. In view of the two decisions of their Lordships as noticed above, counsel appear to be right. Accordingly, the Tribunal's order dated April 12, 1985, in so far as the claim for deductions under section 35B of the Income-tax Act, 1961, is concerned is set aside. The case is remanded to the Tribunal for a fresh decision so as to enable the assessee to prove t....

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....e. It is not like the fashion show conducted by a garment manufacturer, but a commission allowed to a dealer. Trade discount cannot be treated as a wasteful expenditure incurred by an assessee in connection with the sales' promotion. It is not a gift as given on a festival or a free sample as distributed by a pharmaceutical company to the doctors but an actual commission allowed or paid to a dealer. It does not fall within the mischief of section 37(3A) of the Act. Mr. Sawhney contends that an amount of Rs.10,33,787 has been paid by the assessee as a "turnover discount" to the distributor. He contends that the discount was given by the assessee to promote sales and thus it should fall within the provision of section 37(3A) of the Act. ....