Law:

Section:

Income-tax---Reference---Question of fact---Business expenditure---Expenditure on presentation of gifts of watches to dealers who attended "sales conference" ¬Expenditure incurred on repairs and maintenance of car ---I.T.O. disallowing claim of deduction of expenditure---Tribunal deleting disallowance made by I.T.O. on ground that watches not given for advertisement but distributed among dealers for maintaining good relations---Whether a gift item carries advertisement value is a finding of fact---Tribunal also refusing to refer question as tax effect less than Rs.30,000 as per circular of C.B.D.T.---No referable question of law arises---Indian Income Tax Act, 1961, Ss.37(3-A) & 256(2)---Indian Income Tax Rules, 1962, R.6-B(3). The assessee claimed deduction of expenditure amounting to Rs.1,48,388 under the head "Sales conference" which included expenditure of Rs.37,820 relating to presentation of watches costing more than Rs.50 each to the dealers who attended the conference. The assessee also claimed an amount of Rs.6,451 being 20 per cent. of the total expenditure of Rs.32,256 spent on the repairs and maintenance of the car. The Income-tax Officer disallowed the amount of Rs.37,820 spent on the presentation of the gifts under Rule 6-B(3) of the Income-tax Rules, 1962, as well as the amount of Rs.6,451 under section 37(3-A) of the Income Tax Act, 1961. The Commissioner (Appeals) dismissed the appeal filed by the assessee. The Tribunal held that since the watches were not proved to have been given for the purpose of advertisement but had been distributed among the existing dealers and stockists for maintaining good relations, the expenditure on them could not be disallowed under Rule 6-B(3) of the Income Tax Rules. The Tribunal also deleted the addition of Rs.6,451 in respect of the amount spent on the repairs and maintenance of the car. The Tribunal rejected the application of the Revenue under section 256(1) of the Act to refer questions of law on the ground that its finding was a finding of fact as also on the ground that the tax effect in the case was less than Rs.30,000 and, therefore, under the circular issued by the Central Board of Direct Taxes the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492