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3. On his part, the CIT(A) allowed the assessee's claim. In this regard he found that the discount in the form of gold medallions ranging in weight from 2 gms. to 4 gms. each were given by the assessee to its clients as and by way of trade discount; and that the aggregate value of the gold medallions purchased was Rs. 2,00,435.65, the rest of the expenses aggregating Rs. 60,000 and odd being attributable to (a) bank discounting charges, and (b) cash discount allowed by the assessee to its clients. The CIT(A) further found that the discount given in kind had a direct bearing on the quantity of a particular item of pesticide, namely Cymbush, sold by the assessee. What was more, other distributors of the pesticides manufactured by IEL Ltd. were following the same procedure for giving trade discounts. Again, whereas in the immediately preceding year of account IEL Ltd. had given commission of 15%, in the relevant previous year the said manufacturer had given the assessee an additional discount of 8%.

4. Shri Vinay Mohan, the learned Departmental Representative, strongly contended that the CIT(A) was not justified in allowing the assessee's claim. Going on the basis of the grounds of appeal, he contended first that the assessee had not led any proof of purchase of gold medallions in question. Secondly, in any event, the aggregate expenditure of Rs. 2,00,435 incurred by the assessee in purchasing the gold medallions should be treated as sales promotion expenses and on that basis brought under the pale of the provisions of Section 37(3A) of the Act.

6. We have looked into the facts of the case. We have considered the rival submissions.

7. At the outset we may point out that we are not impressed by the argument of the learned Departmental Representative to the effect that the assessee had not proved the genuineness of the purchase of gold medallions. As we see it, this argument is very much in the nature of second thoughts. It is clear from the assessment order that the assessee had, at the instance of the Assessing Officer, filed details of the expenditure incurred under the head 'Discount and allowances'. It was with reference to these details that the Assessing Officer found that the assessee had given gold medallions as and by way of trade discount. Nothing prevented him from making necessary inquiries into the genuineness of the purchases. He went on the footing that trade discount could only be in cash and not in kind.

8. In support of the assessee's claim for revenue deduction, one of the arguments advanced by the assessee's representative before the CIT(A) was that the purchase of gold medallions was paid for through cheques. The CIT (Appeals) accepted this argument, obviously because he was satisfied with the genuineness of the purchases. He then went on to hold that trade discount could be given in kind; that the outlay on the distribution of gold medallions was reasonable; and that, therefore, the assessee was entitled to revenue deduction in respect of the sum of Rs. 2,00,435.65. We do not find any reason to interfere with the line adopted by the CIT (Appeals).