TMI Blog2014 (1) TMI 1634X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable. The CIT(A)’s order being based on sound reasoning and proper appreciation of facts, needs no interference, which is upheld. - Apropos advertisement also assessing officer has not given any rational basis or cogent reasons to come to a conclusion that 15% ad hoc of the total expenditure on publicity & advertisement was attributable to brand building. CIT(A) has rightly held that the expenditure has been incurred on profit generating apparatus of the assessee. - Respectfully following Hon’ble Supreme Court judgment in the case of Emporium Jute Co. Ltd. [1980 (5) TMI 1 - SUPREME Court] And Citi Finance (2011 (3) TMI 622 - Delhi High Court) we uphold his order - Decided against Revenue. - ITA No. 917/Del/2012 - - - Dated:- 30-1-2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.58% and to the non A.Es 28.46%. The difference of 4.88% as mentioned above was thus offered to tax as T.P. adjustment. Assessing officer, however, did not accept the assessee s contentions and made an adjustment of ₹ 10,91,121/- over and above the offer which was challenged by the assessee in appeal. 3.1. In first appeal, the CIT(A) deleted the addition by following observations: 3.5. During the course of the hearing, the appellant has also produced a copy of the agreements between the appellant and Prakash Books India Pvt. Ltd., which is an unrelated entity to prove that Volume Discounts or Bulk Discounts are offered to distributors or bulk buyers. In this particular case, the appellant offers 45% discount on the selling pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it is clear from the documents filed before me that the appellant gives volume discounts at rate of 45 /c) even at the local market goes to justify the claim of 11.88% as a volume discount in international transaction. The adjustment proposed by the assessee is reasonably accurate and also corresponds to commercial reality. Therefore, the addition made on this account should be deleted. The AO is directed to delete the addition. This ground of appeal is allowed . 3.2. ld. Counsel pleads that offering of voluminous discount is a well known market practice in book publication as such bulk sales is a well recognized commercial expediency inasmuch as they increase turn over, reduce the risk of obsoletion and further reduce the bad debt ris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, the AO has not given any justification to treat some part of the expenses, on an ad hoc basis as giving enduring benefit and to hold that it goes to build the brand. Therefore, the AO is directed to delete the addition made in this regard. 3.5. Ld. Counsel contends that in book publication business huge amount on publicity and advertisement is to be incurred to promote various titles, the contents of books are to be advertised and sent to various schools, curriculum boards and affiliation bodies. Thus the overall advertisement is for the purpose of promotion of assessee s income generating apparatus and thus the judgment of Hon ble Supreme Court in the case of Empire Jute Mills (supra) is squarely applicable to assessee s case on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered while making T.P. adjustments. In view thereof CIT(A) has rightly appreciated the issue and held that the suo motu offer of adjustment by assessee at 4.88% as net profit margin adjustment was reasonable. The CIT(A) s order being based on sound reasoning and proper appreciation of facts, needs no interference, which is upheld. This ground of the revenue is dismissed. 4.1. Apropos advertisement also assessing officer has not given any rational basis or cogent reasons to come to a conclusion that 15% ad hoc of the total expenditure on publicity advertisement was attributable to brand building. Ld. CIT(A) has rightly held that the expenditure has been incurred on profit generating apparatus of the assessee. Respectfully followin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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