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2008] 306 ITR 40 [2007] 164 TAXMAN 326 (MP) HIGH COURT OF MADHYA PRADESH, INDORE BENCH Hemraj Nebhomal* v. Union of India A.M. SAPRE AND ASHOK KUMAR TIWARI, JJ. IT APPEAL NO. 62 OF 2003 FEBRUARY 16, 2006 Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1991-92 - Whether in view of decision of Madhya Pradesh High Court in Hemraj Nebhomal Sons v. CIT [2005] 278 ITR 345/ 146 Taxman 345 , expenditure incurred by assessee towards advertisement and sales promotion of its product would be allowable as deduction under section 37(1) - Held, yes CASE REFERRED TO Hemraj Nebhomal Sons v. CIT [2005] 278 ITR 345 / 146 Taxman 345 (MP) [Para 3]. S.C. Bagadia for the Appellant. R.L. Jain and Ku. V. Mandlik for the Respondent. ORDER A.M. Sapre, J. - This is an appeal filed by the assessee under section 260A of the Income-tax Act against an order, dated 7-3-2003, passed by the ITAT (for short hereinafter referred to as 'Tribunal') in ITA No. 15/IND/97. This appeal was admitted for final hearing on 8-9-2003 on the following substantial questions of law:- "1. Whether the Tribunal erred in law in maintaining disallowance on account of advertisement and sale promotion expenses without appreciating the facts and circumstances of the case and by ignoring the decisions of the Supreme Court and jurisdictional High Court relied on by the appellant ? 2. Whether on the facts and in the circumstances of the case, the advertisement and sales promotion expenses incurred by the appellant for the purpose of business were rightly disallowed by the Tribunal ignoring past practice and overlooking the trade practice and commercial expediency?" 2. Heard Shri S.C. Bagadia, learned senior counsel with Shri D. Chhabra for assessee/appellant and Shri R.L. Jain learned Sr. counsel with Ku. V. Mandlik for the revenue/respondent. 3. At the out set learned counsel appearing for both the parties have brought to our notice a decision rendered by this Court in the case of this very assessee in Hemraj Nebhomal Sons v.CIT [2005] 278 ITR 345 1 wherein the very question involved in this appeal was answered against the revenue and in favour of the assessee. In…

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