COMMISSIONER OF INCOME TAX Vs. KAMAL AND COMPANY

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has referred the following two questions of law arising out of its order dated June 17, 1979, in respect of the assessment year 1975-76 :

(2.) WHETHER, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 9,619 made by the Income-tax Officer on account of interest on debit balance in the accounts of the partners ?"

(3.) AGAINST this order, the second appeal was preferred to the Income-tax Appellate Tribunal, Bombay Bench 'D' Camp, Jaipur. The Tribunal came to the conclusion that the expenditure has resulted in beautification of the traffic island and the assessee had incurred this expenditure in order to advertise the name of the firm and the products of the business which was carried on. The firm had incurred this expenditure in the course of carrying on its business and it was not in the nature of a personal expenditure incurred by the firm or its partners. It was found that there are many subtle ways in which advertisement and publicity is carried on in these days and the present case is one of the ways in which a businessman advertises his business and tries to improve its public image so as to result in better outturn in his business. It was found that a plaque in the traffic island was put up which showed that the same was constructed with the co-operation of the assessee-firm. The expenditure was held to be business expenditure and the addition was deleted.