1996 (5) TMI 38

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....on maintenance of car was not includible in spite of clear and specific provisions in section 37(3B)(ii) of the Income-tax Act, 1961 ? The brief facts giving rise to this reference are that the assessee-firm declared its total income at Rs. 4,18,030. The business of the assessee was manufacture and sale of spare parts required in steel plants and other industries and also execution of the work of fabrication of steel structures and power equipments. During the course of assessment, the Assessing Officer found that an amount of Rs. 1,41,580 was incurred by the assessee on maintenance of cars. He included this amount while computing the disallowable expenses under section 37(3A) since, according to the provisions of section 37(3B)(ii), exp....

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....ere the aggregate expenditure incurred by an assessee on advertisement, publicity and sales promotion in India exceeds forty thousand rupees, so much of such aggregate expenditure as is equal to an amount calculated as provided hereunder shall not be allowed as a deduction, namely :--- (i) where such aggregate expenditure 10 per cent. of the adjusted does not exceed 1/4 per cent. of the turnover expenditure ; or, as the case may be, gross receipts of the business or profession. (ii) where such aggregate expenditure 12 1/2 per cent. of the adjusted exceeds 1/4 per cent. but does not exceed 1/2 expenditure ; per cent. of the turnover or, as the case may be, gross receipts of the business or profession (iii) where such aggregate....

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....gues or price lists ; (viii) such other items as may be prescribed. Explanation 1. - For the purposes of clause (i), an advertisement in a newspaper shall be deemed to be an advertisement in a small newspaper, if the average circulation of such newspaper in the year in which such advertisement has been published, does not exceed fifteen thousand copies. Explanation 2.--" Average circulation ", in relation to any news paper, shall be taken to be the number arrived at by dividing the aggregate of the number of copies of such newspaper circulated during a year by the total number of days on which such newspaper was published in that year. " Section 37 of the Act provides that any expenditure not being expenditure of the nature desc....