DUNCANS TEA LTD. Vs. CIT

JUDGEMENT

(1.) This appeal was admitted by an order dated 8-10-2001, on the' following substantial question of law:

(2.) The short fact is that the appellant has been and still is carrying on purchasing and selling and/or otherwise dealing in tea and tea products. While carrying on such business the appellant adopts various methods of promotion of sale of their products. In doing so, the appellant had adopted a policy to augment the sale and for the growth of their business to woo the customers distributing the gift articles. As such these gift articles, viz., detergent, soaps, ball pens and other gift items were purchased and the cost of such purchase of this gift items are shown in their return as the business expenditure.

(3.) The Assessing Officer considering the materials placed before him and also having examined the same, had disallowed 50 per cent, of the amount claimed for deduction of the cost of such gift articles as business expenditure and 50 per cent, was allowed. The appellant being aggrieved by the said decision of the Assessing Officer took this matter to the Commissioner of Income-tax (Appeals). The appellate authority, who examining the judgment and order of the Assessing Officer and going through the evidence, found that the claim for deduction of business expenditure on account of purchase of gift articles was genuine and the entire cost was allowed. Therefore, the first appellate authority deleted the 50 per cent, disallowance of the cost of the gift articles.