MODI RUBBER LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this petition under S. 256(2) of the INCOME TAX ACT, 1961 (hereinafter called, "the Act"), relevant to the asst. year 1987 -88, the assessee seeks to refer the following question for the opinion of this Court :

(2.) THE assessee filed a return of income for the assessment year under consideration declaring a total income of Rs. 1,31,55,490. The assessee in his return of income claimed a deduction of Rs. 2,83,792, alleged to have been incurred by it in putting up a stall at the exhibition organised in connection with the Congress Centenary Celebration at Jaipur claiming the same to be a business expenditure. The case of the assessee before the AO was that the aforesaid expenditure was not incurred on the publication of any advertisement and that the same was incurred on putting up a pavilion in the exhibition so as to promote the image and goodwill of the assessee. The Asstt. CIT, Central Circle, New Delhi, took up the assessment proceeding of the assessee for the assessment year under reference and passed the order of assessment in respect of the income amongst others, holding that the expenditure incurred by the assessee to the tune of Rs. 2,83,792 was indirectly a contribution to a political party and disallowed the same in view of the provision of S. 37(2B) of the Act.

(3.) MR . S. K. Aggarwal, appearing for the assessee, took us through the impugned order of the Tribunal out of which the aforesaid question proposed as question of law is said to have arisen and submitted before us that the provision of S. 37(2B) of the Act is not at all applicable and the said amount of Rs. 22,83,392 was in fact an allowable deduction as the business expenditure of the assessee.