1996 (2) TMI 51

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.... : " Whether, on the facts and in the circumstances of the case and on an interpretation of section 37(3A) of the Income-tax Act, 1961, the commission paid on export sales is to be reckoned for purpose of disallowance under section 37(3A) as forming part of sales promotion expenses ? " The Tribunal has declined by rejecting the application of the Revenue by the order dated December 6, 1993, hold....

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....s promotional expenditure and had to be excluded from the purview of the provisions of section 37(3A) of the Income-tax Act. The Revenue got the same result from the Income-tax Appellate Tribunal. Reading section 37 of the Act it would be seen that it relates to the process of computation of income chargeable under the head " Profits and gains of business or profession ". One of such items of ex....

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....g amount of sales and although the intention is to enhance and improve the business and consequently sales of the assessee, properly understood the same could not be a sales promotion activity. To appreciate this aspect a bare reading of the provisions of sub-section (3B) would be of assistance in the process. The word " sales promotion " as is used will be seen to have been used in conjunction wi....