Pinky Agencies vs Commissioner of Income Tax

The assessee has filed this application u/s 256(2) of the Income Tax Act, 1961, for calling for the statement of case from the Income Tax Appellate Tribunal on the following two questions for opinion of this court :

"(i) Whether, the Tribunal erred in law in maintaining the disallowance of advertisement expenses without appreciating the facts and circumstances of the case and by ignoring the decision of the Supreme Court and jurisdictional High Court relied upon by the applicant ?

(ii) Whether, on the facts and in the circumstances of the case, the advertisement expenses incurred by the assessee for the purposes of its business were rightly disallowed by the Tribunal ?"

It appears that the assessee was an agent/dealer engaged in the sale of "bidis". He said to have incurred some advertisement expenditure which was disallowed on the ground that he was not required to do so being the sub-agent/dealer. After his plea was turned down by the forums including the Tribunal, he applied for seeking reference u/s 256(1) which was also rejected. That is how he filed this application u/s 256(2) contending that once it was accepted by the Revenue that he had incurred the requisite expenditure on advertisement, it was not for the Revenue to proceed further and examine whether he had rightly or wrongly done so. It is also submitted that the issue was covered by some Supreme Court judgment and despite that his application for reference was rejected.

It appears that the questions stated deserve examination. The Tribunal is accordingly required to submit the statement of this case for opinion by this court.