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Section 37(3A) of the Income-tax Act, 1961 - Advertisement/Sales promotion expenses [In favour of assessee] [A/Y : 1985-86] CIT v. Onkar Nath Aggarwal [2008] 307 ITR 346 (Punj. & Har.) Commission and the export markets development allowance are not to be taken into account for the purpose of disallowance under section 37(3A). Dr. N. L. Sharda for the Applicant. Sanjay Bansal for the Respondent. JUDGMENT The following question of law has been referred for the opinion of this court by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, arising out of its order dated May 20, 1993 in I.T.A. No. 62(ASR)/1989, for the assessment year 1985-86 : "Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal is right in law in holding that the expenses on account of commission amounting to Rs. 1,04,650 and the export markets development allowance amounting to Rs. 1,48,713 are not to be taken into account for the purpose of disallowance under sections 37(3A) of the Income-tax Act, 1961 ?" 2. The assessee claimed deduction towards the commission and the export markets development allowance. The Assessing Officer disallowed the same under section 37(3A) of the Income-tax Act, 1961 (for short, "the Act"). The Commissioner of Income-tax (Appeals) allowed the claim of the assessee, which has been upheld by the Tribunal. 3. We have heard learned counsel for the parties and perused the findings recorded. 4. Learned counsel for the assessee, in support of the view taken by the Tribunal, relies upon the judgment of this court in CIT v. Indo Asian Switchgears (P.) Ltd. [2002]257 ITR 645, wherein it was observed (page 648) : "Admittedly, the provisions of section 37(3A) of the Act place an embargo on the expenses incurred on the advertisement, publicity and sales promotion. This would mean that the expenses claimed by an…

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