TaxTMI 
TaxTMI 
2002 (2) TMI 97
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....er, the Tribunal was justified in law in allowing the claim of Rs.36.77 lakhs under section 32AB and Rs.1,28,960 under section 80HHC of the Income-tax Act, 1961? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs.35.11 lakhs, made to the value of closing stock and whether the findings leading to the conclusion are otherwise unreasonable and perverse?" So far as the first question is concerned, the facts found by the Tribunal are that in regard to two new brand products of the assessee, viz., New Luxor and Rangoli, the assessee incurred advertisement expenditure for the accounting year in question for the aggregate sum of Rs.8,29,723. This expenditure, needless to sa....
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....ng market is short and advertisement is needed from year to year and cannot be made once for all in any single particular year. As regards the second question we have to point out that it is really two questions in one. The first part of the second question deals with section 32AB and is concerned with allowance of the assessee's claim of Rs.36.77 lakhs under it. Under the said section, as per sub-section (1)(ii), a sum equal to 20 per cent. of the profits of the assessee's business can be claimed "as computed in the accounts of the assessee audited in accordance with subsection (5)". The said sub-section (5) reads as follows: "The deduction under sub-section (1) shall not be admissible unless the accounts of the business or profes....
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....on of the case of CIT v. Hardeodas Agarwalla Trust, a Division Bench judgment of our High Court, reported at [1992] 198 ITR 511. The court was there concerned with the auditor's certificate necessary for claiming of benefits by a trust. The language employed in another part of the Income-tax Act (see sections 11 and 12) also states like in sub-section (5) above that the assessee must furnish the auditor's report along with his return. The court held that notwithstanding the apparently mandatory words of such requirement, the requirement is in actuality a directory requirement only. The purpose of the statute is to verify the unimpeachable authenticity of a particular accounting position; that purpose is sufficiently served if the audi....
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....d. This was done because a proper and correct manufacturing account, trading account, profit and loss account and balance-sheet were not filed by the assessee even after giving of sufficient opportunity to it. In our opinion that case cannot help the Revenue in this matter. Moreover, in considering the language of section 139 and specially the part of it appearing in sub-section (9) and the Explanation thereto, the following points emerge as relevant and important. In the Explanation to sub-section (9), unless the conditions specified therein are fulfilled, the return of income is to be regarded as "defective". In sub-section (9) itseff, when the defect is not rectified by the assessee even after giving of time, the assessee's return ....
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....he deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section." The language employed here is similar to the language of sub-section (5) of section 32AB. The word 'shall' is used here also; and the same phrase, i.e., furnishing along with the return of income, is also employed here. We do not see any particular reason to take a different view in regard to this sub-section than the view we have already taken in regard to sub-section (5) of section 32AB. We ....