This appeal by Department is directed against order of CIT(A), dt. 17th Oct., 2006 for asst. yr. 2003-04. case was fixed for hearing on 1st April, 2008. Shri S. Sridhar, learned Authorised Representative made request for adjournment. It was noticed from order sheet that case had to be adjourned on request of learned Authorised Representative on several occasions on 31st Dec., 2007, 4th Jan., 2008, 31st Jan., 2008, 28th Feb., 2008 and 1st April, 2008. Therefore, after hearing both parties, request for adjournment was rejected. Ground Nos. 1 to 4 order of learned CIT(A) is contrary to law and facts of case. CIT(A) is not justified in deleting addition of Rs. 16,71,092 being charity collections. CIT(A) has failed to appreciate fact that if assessee is given deduction of 100 per cent of collection of charity, provisions of s. 80G can be rendered redundant. decision of Honourable Supreme Court [CIT vs. Bijli Cotton Mills (P) Ltd. (1979) 8 CTR (SC) 1: (1979) 116 ITR 60 (SC)] never intended such benefit which may render provisions of s. 80G as redundant and hence ratio of apex Court s decision in case of CIT vs. Bijli Cotton Mills (P) Ltd. (supra) is not squarely applicable to facts of case. Therefore charity collected by assessee is definitely part of its sales and deduction under s. 80G at 50 per cent thereon was allowed by AO. assessee was engaged in business of manufacturing mono-block pumps, in name of its proprietary concern, M/s Suguna Industries. Its associate concerns manufacture jet/submersible pumps, 3 phase mono-block pumps, etc. These products are sold through distributors and dealers. During assessment proceeding, it was noticed by AO that Rs. 16,71,092 was shown s charity collected from distributors/dealers, at 1 per cent on sale consideration. This amount was excluded from sale consideration and was paid t o Suguna Charitable Trust. AO has noted in his order that Suguna Charitable Trust was trust managed by members of assessee group. In assessment order passed under s. 143(3) on 28th March, 2006, AO treated this amount as part of sale consideration and included it in total income assessed at Rs. 1,96,98,759. CIT(A) relied on decision of Supreme Court in case of CIT vs. Bijli Cotton Mills (P) Ltd. (1979) 8 CTR (SC) 1: (1979) 116 ITR 60 (SC), and allowed assessee s claim. reasons given by CIT(A) in para 5.3 of his order are as under: "I have carefully considered facts of case and applied by mind to rival contentions. It is fact that appellant has collected charity during course of business. However, Suguna Charitable Trust is separate entity to which such collections have been handed over. This fact has not been disputed b y AO. Therefore limited issue before me is whether or not charity collections constitute trading receipts includible in hands of appellant in spite of fact that there is separate charitable trust. On given facts it is clear that collections for charity are made in course of business and kept in separate account which were handed to Suguna Charitable Trust. case therefore is squarely covered by decision of Hon ble Supreme Court in case of CIT vs. Bijli Cotton Mills (P) Ltd. (1979) 8 CTR (SC) 1: (1979) 116 ITR 60 (SC). In view of this and in circumstances of case it is held that AO was not justified in making impugned addition of Rs. 16,71,092. same is therefore deleted. Consequently, deduction of Rs. 8,35,546 under s. 80G allowed by AO is also withdrawn. This ground of appeal is allowed." We have considered rival submissions in light of material on record and precedent cited. short question for our consideration, in present appeal, is whether decision of Supreme Court in case of Bijli Cotton Mills (P) Ltd. (supra) is applicable to facts of present case. In case of Bijli Cotton Mills (P) Ltd. (supra) assessee company carrying on business of manufacturing and selling yarn realised certain amounts on account of "Dharmada" from its customers on sales of yarn and cotton, @ 1 anna per bundle of 10 lbs. of yarn and 2 annas per bale of cotton. In t h e bills issued to customers these amounts were shown in separate column headed "Dharmada". respondent did not credit amounts so realised by it in its trading account, but maintained separate account known as "Dharmada account", in which realisations on account of Dharmada were credited and payments made thereout were debited. Tribunal held that amounts could not be regarded as having been received or held by assessee under trust for charitable purposes, trust being void for vagueness and uncertainty and that realisations partook of character of trading receipts. High Court, on reference, held that amounts in question were not assessee s income liable to tax, as amounts were paid by its customers specifically on account of Dharmada, amounts were never treated by it as trading receipts or surcharge on sale price, and that "Dharmada" was customary levy prevailing in certain parts of country and where it was paid by customers to trading concern amount was not paid as price for commodity sold to customer, and that assessee was merely acting as conduit pipe or clearing house for passing on amounts to objects of charity. Supreme Court, on appeal, held as under: Held, (i) that when customers or brokers paid amounts to respondent earmarking them for "Dharmada", those payments were validly earmarked for charity; in other words, right from inception those amounts were received and held by respondent under obligation to spend them for charitable purposes only, with result that those amounts were not its trading receipts; (ii) that "Dharmada" amounts could not be regarded as part of price or surcharge on price of goods purchased by customers; amount to "Dharmada" was undoubtedly payment which customer was required to pay i n addition to price of goods which he purchased from respondent, but purchase of goods by customer would be occasion and not consideration for "Dharmada" amount taken from customer. We find that facts in case of Bijli Cotton Mills (P) Ltd. (supra) are distinguishable and therefore decision of Supreme Court in that case is not applicable to present case. assessee in present case was selling its products through distributors/dealers. AO has clearly noted in his order that distributors/dealers were not collecting any amount on account of charity from actual buyers of pumps, manufactured by assessee, as seen from sale bills that he examined. There is nothing on record to show that customers, who were buying pumps manufactured by assessee, were making any separate payment in respect of charity, over and above price of pumps that they were buying. It is here that distinction lies between facts of case of Bijli Cotton Mills (P) Ltd. (supra), and that of present case. In case of Bijli Cotton Mills (P) Ltd. (supra), certain amounts on account of "Dharmada" were collected from customers, on sales of yarn and cotton, and in bills issued to customers these amounts were shown in separate column headed "Dharmada". But in present case, there is nothing on record to show that customers made any separate payment on account of charity , over and above price of product that they were buying. In sale bills/cash memos, issued by distributors/dealers to customers, what was shown as payment made by customers towards price of product, represented sale consideration liable to tax. If from out of t h e sale consideration collected by distributors/dealers from customers/buyers, on behalf of assessee, certain amount was earmarked s charity , it was nothing but application of income . Smt. Kala Mohanraj, learned Authorised Representative could not bring any material on record to contravene factual position recorded by AO as above. CIT(A), while allowing assessee s claim, made vague observation in para 5.3 of his order, saying that, "it is true that appellant had collected charity during course of business". reasons on which decision was given by Supreme Court in case of Bijli Cotton Mills (P) Ltd. (supra), were misconceived by him. Therefore, we have no doubt in mind that decision of Supreme Court in case of Bijli Cotton Mills (P) Ltd. (supra) has no application to facts of this case. In view of facts and circumstances discussed above, we are of considered opinion that order of CIT(A) cannot be sustained. We, accordingly, reverse his order and uphold that of AO. grounds Nos. 1 to 4 are allowed. Ground No. 5 CIT(A) is not justified in deleting sales promotion expenses of Rs. 5,40,000. CIT(A) has failed to appreciate fact that on verification of facts assessee has not incurred expenses of Rs. 5,40,000 during asst. yr. 2003-04. It is seen, provision has been reversed on 1st April, 2003, if it is so, assessee was aware of fact that excess claim of Rs. 5,40,000 was made for asst. yr. 2003-04 even before filing of return of income and it could have offered same in return of income. Therefore, on facts, there is no case to allow claim of expenditure which was correctly added by AO. assessee had claimed Rs. 5,40,000 under head "Sales promotion expenses" which was disallowed by AO. He noted in his order that assessee had not incurred these expenses during year, that entry of provision had been reversed on 1st April, 2003, that assessee was aware of fact that excess claim of Rs. 5,40,000 was made for asst. yr. 2003-04 even before filing return of income, that on facts there was no case to allow this claim of expenditure for year under consideration. He, however, observed that in case assessee had reduced its expenses under this head b y Rs. 5,40,000 for asst. yr. 2004-05, he would be free to revise return of income. It was submitted, on behalf of assessee, before CIT(A) that gold coin scheme was announced to boost sales during Deepavali, that it was for one year from November 2002 to October, 2003, that scheme was based on proportionate turnover made upto March, 2003, that provision was made in accounts, that scheme was not successful as many dealers did not achieve target, that assessee, therefore, allowed additional turnover discount for few dealers who had achieved target, that provision made was reversed in next accounting year (2003-04), that assessee had been following mercantile system of accounting and accordingly made provision of Rs. 5,40,000 for sales promotion , that just because it was reversed in next financial year for reason that scheme was not successful, claim of expenditure cannot be denied in assessment year under appeal. We considered rival submissions on basis of material on record. CIT(A) deleted addition on ground that assessee was following mercantile system of accounting, and that assessee had correctly made t h e provision keeping in view business exigencies, that there was no justification for AO to make impugned disallowance of Rs. 5,40,000. We find it difficult to agree with conclusions reached by CIT(A). There is no material on record to show that liability of Rs. 5,40,000 had, in fact, accrued during year in question. explanation given on behalf of assessee, before CIT(A) and before us, is too vague and general in nature and has no merit. It is not known as to how alleged liability was worked out at Rs. 5,40,000. order of CIT(A) is reversed and that of AO is restored. ground No. 5 is allowed. In result appeal filed by Department is allowed. *** DEPUTY COMMISSIONER OF INCOME TAX v. G. RAMASWAMY