1997 (7) TMI 60

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....M. V. Seshachala, learned standing counsel for the Income-tax Department, and Mr. G. Sarangan, learned senior advocate with Mr. S. Parthasarathy, learned counsel for the respondent. In this reference under section 256(2) of the Income-tax Act, 1961 (in short the "Act"), we are required to record our opinion on the following questions of law--- "1. Whether, on the facts and in the circumstanc....

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....15. The assessee is a private limited company carrying on business in insecticides, pest control operations and export of coffee mainly to the USSR. For the assessment years 1978-79 and 1979-80, the assessee had claimed deduction under section 37 of the Act to the tune of Rs. 79,912 and 50,565, respectively, under the head "Business promotion expenses", which were disallowed by the Inspecting A....

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....standing anything contained in sub-section (1), any expenditure incurred by an assessee after the 31st day of March, 1964, on advertisement or on maintenance of any residential accommodation including any accommodation in the nature of a guest-house or in connection with travelling by an employee or any other person (including hotel expenses or allowances paid in connection with such travelling) s....

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....the assessee. But, in the present case, as we found from the order of the Assessing Officer, that he has disallowed the expenses in question by reading merely rule 6B in isolation as if it provides that any expenditure claimed out of the gross business income on account of gift of articles of more than Rs. 50 has to be ipso facto disallowed. Before the Assessing Officer, though a specific contenti....