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Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1998-99 - Where assessee had incurred expenditure of Rs. 4,18,04,467 on advertisement and sales promotion which included a sum of Rs. 90,522 and of Rs. 2,06,29,188 towards distribution of musical instruments and digital diaries as sales promotion, such expenditure was allowable [In favour of assessee] Where the assessee had incurred expenditure of Rs. 4,18,04,467 on advertisement and sales promotion which included a sum of Rs. 90,522 and of Rs. 2,06,29,188 towards distribution of musical instruments and digital diaries as sales promotion, in view of the decision in CIT v.Citi Financial Consumer Fin. Ltd.[2011] 355 ITR 29 (Delhi), such expenditure was allowable as deduction. CASE REVIEW CIT v. Citi Financial Consumer Fin. Ltd.[2011] 335 ITR 29 (Delhi)followed & relied upon. CASES REFERRED TO Calcutta Co. Ltd. v. CIT[1959] 37 ITR 1 (SC), CIT v. Associated Cement Companies Ltd.[1988] 172 ITR 257 (SC), CIT v. Citi Financial Consumer Fin. Ltd.[2011] 335 ITR 29 (Delhi), CIT v. Salora International Ltd.[2009] 308 ITR 199 (Delhi), Empire Jute Co. Ltd. v.CIT[1980] 124 ITR 1 (SC), Madras Industrial Investment Corpn. Ltd. v. CIT[1997] 225 ITR 802 (SC). Ms. Prem Lata Bansal and Deepak Anand for the Appellant. Dr. Rakesh Gupta and Ms. Rani Kiyala for the Respondent. JUDGMENT A. K. Sikri, J. - The respondent-assessee filed the return for the assessment year 1998-99 declaring loss at Rs. 70.21 lakhs. During the assessment proceedings, the Assessing Officer (AO) noticed that the assessee had incurred expenditure of Rs. 4,18,04,467 on advertisement and sales promotion which included a sum of Rs. 90,522 and of Rs. 2,06,29,188 towards distribution of musical instruments and digital diaries as sales promotion. The Assessing Officer observed that in this very year, the assessee had spent an exceptionally high amount which was basically to build up the "Casio" brand in India. Since in the preceding year, the amount of Rs. 2.70 crores was allowed to the assessee, in the present year also the Assessing Officer allowed the same and disallowed the balance amount of Rs.1,48,04,467 to…

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