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2012 (6) TMI 256 - HC - Income TaxCapital vs revenue expenditure - nature of the expenditure on account of advertising and marketing incurred by the assessee in different assessment years. The AO was of the view that the expenditure which was incurred on neon signs and glow signs was capital in nature as these signs are semi- permanent fixtures fixed at numerous retail outlets of the assessee and providing enduring benefit. Therefore, out of the total expenditure incurred on advertising and publicity, expenditure which was specifically attributed to the glow signs and neon signs (it was major component of advertising and marketing expenditure) was disallowed as the revenue expenditure – Held that:- In the case of Assam Bengal Cement Co. Ltd. (1954 (11) TMI 2 (SC)) , if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure. If any such asset or advantage for the enduring benefit of the business is thus acquired or brought into existence it would be immaterial whether the source of the payment was the capital or the income of the concern or whether the payment was made once and for all or was made periodically. glow signs boards have a short life, they decay with the effect of weather, and require frequent replacement. These observations may not be entirely correct having regard to the literature qua neo sign board produced by the learned counsel for the Revenue. However, this fact would not alter the ultimate decision as it is still obvious that no asset of permanent nature is brought into existence. by putting the neon signs and glow signs, no asset of permanent nature is created. Simply because self-life of such neon signs is more, may not be of any significance once we keep in mind the important aspect on which the expenditure is incurred i.e. on advertising and marketing. no question of law arises and these appeals are accordingly dismissed
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