Judgment ( 1. ) IN Income Tax Reference No. 44/99 the Income Tax Appellate Tribunal, Jabalpur Bench, Jabalpur (in short the Tribunal) has referred the following question for opinion of this Court: "whether on the facts and circumstances of the case, the Tribunal was justified in upholding the disallowance of Rs. 1,24,918/-incurred by the assessee for Inami Yojna Scheme following its own order for A. Y. 1989-90 ?" ( 2. ) IN Income Tax Reference No. 46/99 this Court in exercise of powers conferred under Section 256 (2) in ITR No. 156/97 has called for statement of case in respect of the following question : "whether the Tribunal was right in invoking the provisions of Section 37 (3) of the I. T. Act, 1961 read with Rule 6-B of I. T. Rule, 1962 to disallow the sale promotion expenses incurred by the assessee at Rs. 2,17,029/- holding them to be advertisement expenses ?" ( 3. ) IT is relevant to state here that in both the references the assessee is the same. We will refer to the facts in I. T. R. No. 46/99. The assessee is a partnership firm which derives income from trading of tendu leaves and also act as a Selling Agent for sale of Bidi of its sister concern, namely, Mohd. Gulam (Modern Bidi Factory), Katni. For the assessment year 1989-90 the assessee claimed an expenditure of Rs. 1,48,817/- towards advertisement and Rs. 2,17,029/towards prize scheme expenses. The Assessing Officer allowed the advertisement expenses but disallowed the Prize Scheme Expenses. While making a disallowance ho relied on Clause 10 of the Agency Agreement according to which on the request of the agent the expenses was to be borne by the Principal. On an appeal being preferred the Commissioner of Income Tax (Appeal) uphold the disallowance. The assessee being aggrieved preferred an appeal before the Tribunal. The Tribunal while dealing with the aforesaid facet referred to Clause 10 of the agreement which reads as under: "it is for improvement and rearing up the sales of Bidis any special inami scheme is introduced by the agent, the agent shall request the principal to bear the expenses for the said scheme and such request being made the principal shall bear its expenses. " ( 4. ) AFTER referring to the said Clause in the agreement in Paragraph 16 the Tribunal expressed the view as under: "16. " ( 4. ) AFTER referring to the said Clause in the agreement in Paragraph 16 the Tribunal expressed the view as under: "16. We have considered the submissions of the learned Counsel as well as the learned D. R. It is seen that there is no any business necessity for the assessee-firm to spend any sum on presentation. Clause 10 of the agreement between the principal and the assessee-firm clearly states that the firm will take up routine advertisement expenditure. In case of any special inami scheme, the principal will reimburse the cost. It is also seen from record that there is a specific debit for advertisement already made. As such, the expenditure on prize scheme can not be clubbed together, as an advertisement expenditure as claimed by the assessee. We are unable to accept that the inami prize scheme is a routine advertising affair. In the special case the assessee could not produce any material on record to indicate that the presentation scheme was necessary to maintain the existing business or to obtain new avenues of business. As we have discussed earlier, even if the firm had spent some money on this account, the same should have been reimbursed by the principal in accordance with Clause 10 of the Agreement. We are, therefore, of the opinion that there is no infirmity in the order of the learned CIT (A) and we confirm the same. " ( 5. ) AS has been indicated earlier, the assessee being aggrieved moved this Court in I. T. R. No. 156/97 and this Court had called for statement of the case. It is submitted by Mr. G. N. Purohit, learned Counsel for the applicant/assessee that the controversy is no more res Integra in view of the decision rendered in the case of Commissioner of Income Tax v. Mohd. Ishaq Gulam, (1998) 232 ITR 869. Mr. Rohit Arya, learned Senior Counsel for the Revenue, per contra, has submitted that in the aforesaid case there was no agreement with the Principal or Sister concern and hence, the law laid down therein is distinguishable. Ishaq Gulam, (1998) 232 ITR 869. Mr. Rohit Arya, learned Senior Counsel for the Revenue, per contra, has submitted that in the aforesaid case there was no agreement with the Principal or Sister concern and hence, the law laid down therein is distinguishable. In the aforesaid case the Division Bench of this Court referred to the decision rendered by the High Court of Calcutta in the case of Commissioner of Income Tax v. Hindustan Motors Ltd. , (1991) 192 ITR 619 and further referred to the Circular No. 24, dated 17-5-1978 and thereafter came to hold as under: "a perusal of the circular shows that the terms "publicity" and "sales promotion" have been further clarified. It has been observed that both these expressions have a wide amplitude and the expenditure incurred by the tax- payers on fashion shows, beauty shows, beauty contests, consumer contests, consumer gifts offers and free samples or gifts fall within the ambit of new Section 37 (3-A) of the Act. But the brokerage paid to the commission agent, does not fall in any of the categories enumerated above by the circular. If in the interpretation, payment of brokerage to the commission agent is to be included, then there is no reason why this could not have been included as one of the categories of sales promotion but that was not done deliberately so as not to give a very extended meaning to the expression "sales promotion". Therefore, in our opinion, brokerage and commission paid for selling the goods would not come within the mischief of the phrase "advertisement, publicity and sales promotion". The view taken by the Tribunal with reference to the decision of the Calcutta High Court in the case of Hindustan Motors Ltd. , (1991) 192 ITR 619 , appears to be justified. . . . . . . " ( 6. ) AT this stage we may profitably refer to the order dated 18-8-99 in I. T. R. No. 109/99 wherein this Court relied on the case of Mohd. Ishaque Gulam (supra) and answered the question in favour of the assessee and against the revenue. It is relevant lo state here that in I. T. R. No. 109/99 this Court was dealing with the sister concern of Mohd. Ishaque Gulam who was the assessee in the case of C. I. T. v. Mohd. Ishaque Gulam (supra ). Ishaque Gulam (supra) and answered the question in favour of the assessee and against the revenue. It is relevant lo state here that in I. T. R. No. 109/99 this Court was dealing with the sister concern of Mohd. Ishaque Gulam who was the assessee in the case of C. I. T. v. Mohd. Ishaque Gulam (supra ). In view of the aforesaid, we are of the considered view that the "inami yojna scheme" was a sales promotion expenditure and should not have been disallowed by the Tribunal by treating it otherwise. ( 7. ) CONSEQUENTLY, we answer the question in negative against the Department and in favour of the assessee.