Hemraj Nebhomal vs Union of India (UOI)

A.M. Sapre, J.—This is an appeal filed by the assessee u/s 260A of the Income Tax Act against an order, dated 7-3-2003, passed by the ITAT (for short hereinafter referred to as ''Tribunal'') in ITA No. 15 /IND/97. This appeal was admitted for final hearing on 8-9-2003 on the following substantial questions of law:

Whether the Tribunal erred in law in maintaining disallowance on account of advertisement and sale promotion expenses without appreciating the facts and circumstances of the case and by ignoring the decisions of the Supreme Court and jurisdictional High Court relied on by the appellant ?

Whether on the facts and in the circumstances of the case, the advertisement and safes promotion expenses incurred by the appellant for the purpose of business were rightly disallowed by the Tribunal ignoring past practice and overlooking the trade practice and commercial expediency?

Heard Shri S.C. Bagadia, learned senior counsel with Shri D. Chhabra for assessee/appellant and Shri R.L. Jain learned Sr. Counsel with Ku. V. Mandlik for the revenue/respondent.

At the out set learned Counsel appearing for both the parties have brought to our notice a decision rendered by this Court in the case of this very assessee in Hemraj Nebhomal Sons Vs. Commissioner of Income Tax, wherein the very question involved in this appeal was answered against the revenue and in favour of the assessee. In other words the only difference in this appeal and the one which this Court decided in the case reported supra is that the assessment years involved in both these appeals are different. This appeal arises out of assessment year 1991-92 whereas the other appeal arises out of assessment years 1989-90 and 1990-91.

Accordingly and in view of aforesaid we need not burden our judgment by narrating the entire facts in detail because the reasoning contained in our judgment rendered in the earlier one which is in Hemraj Nebhomal Sons ''case (supra) will equally apply so far as disposal of this appeal is concerned.

Accordingly and in view of aforesaid discussion, the appeal succeeds and is hereby allowed. The questions framed are answered in favour of the assessee and against the revenue. The reasoning contained in our order dated 7-3-2005 passed in the case of this very assessee Hemraj Nebhomal Sons ''case (supra) shall equally apply and will govern the disposal of this appeal also. No order as to cost.