TaxTMI 
TaxTMI 
1996 (10) TMI 58
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....he learned Tribunal was right in law in deleting the addition of Rs. 58,405 made on account of gifts and presents made to foreign collaborators by relying on the decision of the Gujarat High Court in the case of CIT v. S. L. M. Maneklal Industries Ltd. [1977] 107 ITR 133 ? 2. Whether, on the facts and in the circumstances of the case, the learned Tribunal was right in law in directing the Assessing Officer to reduce from the value of presented articles a sum of Rs. 50 from the value of each item by overlooking the provisions of rule 6B ? 3. Whether, on the facts and in the circumstances of the case, the learned Tribunal was right in law in directing the Assessing Officer to allow depreciation, additional depreciation and investment allowa....
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....egates and the collaborators. The assessee went in further appeal before the Tribunal and explained that gifts costing Rs. 58,405 were given to the foreign collaborators and items costing Rs. 14,930 to others so as to maintain good business relations with the foreign suppliers and collaborators. The assessee was a manufacturer of carburettors, spokes, nipples, clutches, etc., in technical collaboration with foreign parties. Expenditure incurred on gifts was, therefore, claimed to be an expenditure allowable under section 37(1) of the Act as it was incurred wholly and exclusively for the purposes of the business. The Tribunal agreed with the assessee and took the view that the gifts had been given not by way of any advertisement or publicit....
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.... question, sought to be made, may ultimately be decided in favour of the assessee. In CIT v. Greaves Cotton and Co. Ltd. [1968] 68 ITR 200, the Supreme Court was again examining a question about the scope and power of the High Court in a matter of tax reference and it was observed that the question, whether an expenditure was laid out wholly and exclusively for the purposes of business, was a mixed question of law and fact. In Bengal Enamel Works Ltd. v. CIT [1970] 77 ITR 119, the Supreme Court was examining a matter relating to certain remuneration given to the employees. The Assessing Officer had disallowed part of the remuneration on the ground that it was paid on extra-commercial considerations. It was observed that the taxing authori....
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....rking relationship. There is nothing on record to indicate that the items had been given as gifts for any reason, which could be treated to be personal. There is no denying the fact that the suppliers and collaborators had visited the place of business of the assessee and the assessee had business interest in them. Therefore, the finding of fact given by the Tribunal does not give rise to any question of law. Expenditure on the gift items has been rightly allowed, treating it to be an expenditure wholly and exclusively for the purposes of business under section 37(1) of the Act. As regards the expenditure of Rs. 14,930, the Assessing Officer has to look into this expenditure so as to verify that the expenditure on each item could be allowed....