TMI Blog2010 (8) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the addition of ₹ 26,44,983/- out of ₹ 33,56,229/- claimed as product registration expenses without appreciating that the entire claimed expenditure did not pertain to the year under consideration. 2) The learned CIT(A) further erred in law and on the facts and in the circumstances of the case in allowing the expenses to the extent of ₹ 2,05,880/- out of disallowed ₹ 2,55,880/- without appreciating the fact that the disallowance was made because the assessee had failed to prove that the expenditure was incurred for the purpose of business and not because the membership was in the name of the director as observed by him. 2. In regard to ground No.1, the finding of the Assessing Officer is that the expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Expenditure is essentially an accounting concept denoting expenditure, for which a payment has been made or a liability incurred, which is revenue in nature but which, for various reasons and on the presumption that the same will result in benefits over a period, is spread over a period of time. Thus, though the nature of expenditure may be revenue, keeping in view the fact that the benefits arising there from are expected to be derived over a period of time, stretching sometimes over several accounting periods, the expense is treated as a Deferred Revenue Expenditure and consequently amortized over the expected time period over which the benefits are likely to accrue there from. Accordingly, only a proportion of the same is amortized in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Silicon Graphics Systems India (P) Ltd. Vs. JCIT (103 TTJ 220). On these facts and considering the above judicial view, this ground is decided in favour of the appellant who gets a relief of ₹ 35,94,570/-. 2.2 The learned DR relied on the order of the Assessing Officer. On the other hand, the case of the learned counsel for the assessee is twofold namely, -(i) the revenue did not file appeal against the appellate order for assessment years 2003-04 and 2004-05 before the Tribunal and, therefore, on the basis of rule of consistency, the appeal should be dismissed and (ii) the deferred revenue expenditure is essentially an accounting concept and not a legal one and, therefore, the expenditure, being revenue in nature, should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the expenditure disallowed on the ground that it has not been proved that the expenditure relates to the business of the assessee. 3.1 The learned CIT(A) mentioned that club prevee at Intercontinental Hotel can be accessed only by the club members. Therefore, it was in the interest of business to provide membership to the directors for utilizing the facilities of the club for the purpose of business. The Assessing Officer has not given a finding that the expenditure is bogus or of personal nature. Therefore, it has been held that the absence of the name of the company cannot lead to disallowance of the whole of the expenditure. He estimated the disallowance at ₹ 50,000/- and allowed the balance expenditure of ₹ 2,05,000/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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