Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of -- Expenditure incurred by assessee on purchase of articles for presentation to customers and employees, where such articles did not even bear logo of assessee-company, was allowable and could not be disallowed under rule 6B [Assessment years 1986-87 to 1988-89] The assessee had made a claim for deduction of certain amounts spent for presentation of the articles to its customers and employees. The Assessing Officer, taking into consideration the language employed in rule 6B of the Rules, rejected the same and in the appeal filed, the Commissioner (Appeals) allowed the assessee's claim on the ground that since no logo of the assessee's company was attached to the articles presented and therefore, advertisement of the company or its products was not involved in the presentation of articles and further, the presentation of the articles so made was for maintaining better relationship with its customers and employees and that the assessing authority was not justified in disallowing the claim made by the assessee. The Tribunal upheld the appellate order. Held that the first appellate authority and the Tribunal as a matter of fact had found that the articles distributed by the assessee-company did not even bear the name or the logo of the company and they did not even have any advertisement value. In view of this finding by both the fact-finding authorities, the assessing authority was not justified in disallowing the expenditure claimed by the assessee on the presentation of articles to its customers and employees. JUDGMENT H.L. Dattu, J.-At the instance of the Revenue, the Tribunal has referred the following questions of law, which according to him, would arise out of the order passed by the Income-tax Appellate Tribunal, Bangalore Bench, Bangalore, in I. T. A. Nos. 594-596 of 1992 and 1048, 1049 and 1050 of 1991, for our consideration and opinion. The parties to these proceedings are common. The assessment years are 1986-87, 1987-88 and 1988-89, respectively. In I.T.R.C. Nos. 280, 281 and 282 of 1998, the question of law referred for our consideration and opinion is: "Whether, on the…

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