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2012 (10) TMI 238 - AT - Income TaxExpenditure on advertisement and sale promotion - revenue or capital in nature - The assessee contended that as the expenses have been incurred for creating awareness about branded jewellery in India and to make potential buyers aware about availability of such branded jewellery. Therefore, the expenses incurred are for sales promotion only which is wholly and exclusively for the purpose of business and have not brought into existence any asset of enduring nature. Therefore the expenditure cannot be treated under Capital Expenses head. - held that:- As decided in case of [Commissioner of Income Tax vs. Salora International Limited2008 (8) TMI 138 - DELHI HIGH COURT] Advertisement expenditure for launching of products – As there was a direct nexus between the advertising expenditure and the business of the assessee and that unless the assessee made its products known to the market. - Held that:- The entire expenditure of Rs. 3,89,62,423/- incurred by the assessee on sales promotion is on revenue account and is an allowable as an expenditure incurred wholly and exclusively for the purpose of business and is not capital in nature – in favour of assessee.
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