:1: bgp bgp bgp IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION INCOME INCOME INCOME TAX APPEAL NO.1331 OF 2000 TAX APPEAL NO.1331 OF 2000 TAX APPEAL NO.1331 OF 2000 The Commissioner of Income Tax, ..Appellant Vs. M/s.Blow Plast Ltd. ..Respondent Mr.P.S.Sahadevan for the Appellant. Mr.R.D.Dhanuka i/b. Aanita Dhanuka for the Respondent. CORAM CORAM CORAM :- DR.S.RADHAKRISHNAN & :- DR.S.RADHAKRISHNAN & :- DR.S.RADHAKRISHNAN & S.J.KATHAWALLA, S.J.KATHAWALLA, S.J.KATHAWALLA, JJ. JJ. JJ. DATE DATE DATE : 21ST AUGUST, 2008 : 21ST AUGUST, 2008 : 21ST AUGUST, 2008 P.C. P.C. P.C. 1. Heard the learned Counsel for the parties. The above Appeal was admitted on the following substantial question of law on 18th February,2002. Whether on the facts and in the circumstances of the case and in law, the learned ITAT was justified in holding that the expenditure incurred on the foreign tour of some of the assessee’s dealers would not fall within the ambit of the provisions of Section 37(2A) of the Income Tax Act,1961? 2. The above Appeal pertains to A.Y.1990-91. We have perused the judgment and order dated 8th May,2000 passed by the Income Tax Appellate Tribunal. In paragraph No.5, the Tribunal has clearly recorded that for the A.Y.1986-87 there was a similar disallowance of Rs.3,91,797/- under Section 37(2A) of the Income Tax Act and for the A.Y.1987-88 also there was a similar disallowance of Rs.5,00,823/- under Section :2: 37(2A) of the Income Tax Act. Aggrieved by the aforesaid disallowance, the Assessee had preferred an Appeal before the Income Tax Appellate Tribunal. The Tribunal had decided the Assessee’s Appeal for the aforesaid two Assessment Years by a common decision dated 1st July,1988, wherein, the Tribunal in paragraph No.18 of the said order had observed as under; 18. "We have given our careful consideration to the rival contentions. In our considered view the expenditure of this nature does not fall within the ambit of section 37(2A). The assessee had introduced a scheme for promotion of sales and the expenditure of Rs.3,91,797/- has been incurred for fulfilling the obligations under the said scheme. The hospitality provided to the dealers/customers is not with a view to extending the hospitality to them but in order to fulfil the obligations under the sales promotion schemes and expenditure incurred would not, in our view, fall within the ambit of entertainment expenses under Section 37(2A). We are therefore of the considered view that the disallowance made by the CIT(A) is not justified. The addition is accordingly deleted." 3. For the same reasons disallowance of the subsequent A.Y.1987-88 was also deleted. It appears that the Revenue had preferred Reference Application against the aforesaid decision of the Tribunal before this Court which was rejected by this Court on 8th February,1999. While rejecting the same, this Court had observed that the Assessee had introduced a scheme for promotion of sales and it had incurred the expenditure for fulfilling the said obligation under the said Scheme. :3: 4. Mr.Sahadevan could not dispute that the facts and circumstances of the present Assessment Year are also identical. Under these circumstances, for the same reasons as given by this Court in Income Tax Income Tax Income Tax Reference Reference Reference Application Application Application decided on 8th February,1999 decided on 8th February,1999 decided on 8th February,1999, we dismiss the present Appeal also, however with no order as to costs. (S.J.KATHAWALLA,J.) (S.J.KATHAWALLA,J.) (S.J.KATHAWALLA,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.)