2005 (3) TMI 96

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....bunal, Delhi, has referred the following question of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for the opinion to this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the expenditure of Rs. 1,41,468 in the Delhi set and Rs. 2,80,934 in the Moradabad set which was incurred on ....

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....llowed a sum of 20 per cent. of the amount which was in excess of Rs. 1,00,000 by invoking the provisions of section 37(3A) of the Act. Feeling aggrieved, the respondent preferred an appeal before the Commissioner of Income-tax (Appeals) who had upheld the disallowance. However, in further appeal, the Tribunal had accepted the claim of the respondent and had held that the expenditure incurred by t....

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....ually result in promoting sales. In several cases, this Tribunal has held that expenditure on allowance of a trade discount is not expenditure covered by section 37(3A) read with section 37(3B). In the case before us in some of the bundles of biri, which are sold at 75 paise each, the assessee puts a prize coupon of 25 paise or 50 paise. The result is that if a customer gets a bundle from which 25....

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....he disallowable portion of the expenditure." We have heard Sri A.N. Mahajan, learned standing counsel for the Revenue. Nobody has appeared on behalf of the respondent-assessee. Learned standing counsel submitted that the prize scheme by inserting coupons of 25 paise or 50 paise in some bundles of biri was clearly meant to attract customers and was, thus, a sales promotion scheme. The expendi....