COMMISSIONER OF INCOME TAX Vs. SANTOSH AGENCIES

JUDGEMENT

(1.) In this reference made at the instance of the Revenue, the following question has been referred by the Tribunal for the opinion of this court under Section 256(1) of the Income-tax Act, 1961 :

(2.) The assessee is engaged in carrying on the business of dealers of Beltek T. Vs. This reference relates to the income-tax assessment of the assessee for the assessment year 1984-85. In the course of the assessment proceedings, the Assessing Officer found that the assessee incurred an expenditure of Rs. 2,16,025 debited under the head "Special discount" and another sum of Rs. 1,65,236 debited under the head "Foreign tour expenses". The Assessing Officer noticed that the assessee in terms of its Circular No. 26 of 1983 dated January 10, 1983, introduced a new sales promotion scheme under which special discount was allowed to its dealers for black and white T. V. sets lifted by them during the period January 1, 1983, to March 31, 1983, in the following manner : <FRM>JUDGEMENT_78_ITR210_1994Html1.htm</FRM>

(3.) The aforesaid scheme was extended by the assessee for another three months, namely, April 1, 1983, to June 30, 1983, in terms of its circular No. 27 of 1983 dated April 1, 1983. The special discount so allowed during the relevant previous year to its dealers came to Rs. 2,16,025.