The Commissioner Of Income Tax v. M/S.blow Plast Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1331 OF 2000 The Commissioner of Income Tax,Vs. M/s.Blow Plast Ltd. ..Appellant ..Respondent Mr.P.S.Sahadevan for the Appellant.Mr.R.D.Dhanuka i/b. Aanita Dhanuka for the Respondent. CORAM :- DR.S.RADHAKRISHNAN &S.J.KATHAWALLA, JJ. DATE : 21ST AUGUST, 2008 P.C. 1.Heard the learned Counsel for the parties. The above Appeal was admitted on the following substantial question of law on 18th February,2002. 37(2A) of the Income Tax Act. Aggrieved by theaforesaid disallowance, the Assessee had preferred anAppeal before the Income Tax Appellate Tribunal. TheTribunal had decided the Assessee’s Appeal for theaforesaid two Assessment Years by a common decisiondated 1st July,1988, wherein, the Tribunal in paragraph No.18 of the said order had observed as under; 18. "We have given our careful considerationto the rival contentions. In our consideredview the expenditure of this nature does notfall within the ambit of section 37(2A). Theassessee had introduced a scheme for promotionof sales and the expenditure of Rs.3,91,797/-has been incurred for fulfilling theobligations under the said scheme. Thehospitality provided to the dealers/customersis not with a view to extending thehospitality to them but in order to fulfil theobligations under the sales promotion schemesand expenditure incurred would not, in ourview, fall within the ambit of entertainmentexpenses under Section 37(2A). We aretherefore of the considered view that thedisallowance made by the CIT(A) is notjustified. The addition is accordinglydeleted." 3. For the same reasons disallowance of the subsequent A.Y.1987-88 was also deleted. It appearsthat the Revenue had preferred Reference Applicationagainst the aforesaid decision of the Tribunal beforethis Court which was rejected by this Court on 8thFebruary,1999. While rejecting the same, this Courthad observed that the Assessee had introduced a schemefor promotion of sales and it had incurred the expenditure for fulfilling the said obligation under the said Scheme. 4.Mr.Sahadevan could not dispute that the facts dismiss the present Appeal also, however with no order as to costs. (S.J.KATHAWALLA,J.)(DR.S.RADHAKRISHNAN,J.)