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2014 (1) TMI 16 - AT - Income TaxExpenditure on corporate brand image - Held that:- Following assessee's own case for A.Y. 2006-07 - The brand building of the corporate in advertisement is inherent and it cannot be inferred that such an advertisement goes to create a fixed capital - Even if there is some enduring benefit on account of brand building through advertisement then also, it cannot be held that it is on capital field - Advertisement creates on impression of the brand and product in the mind of the consumer and if there is no frequent advertisement of brand or the product, it is very difficult to push sales in the market - The advertisement on the TV, whether be it for the brand or the product, only goes to enhance the sales and profitability of the assessee company and, hence, the same is to be held as revenue in nature - Decided against Revenue. Transfer pricing adjustment - Held that:- Following assessee's own case for A.Y. 2006-07 - Charging of guarantee commission depends upon the transaction to transaction and mutual understanding between the bank and the parties - There could be instances, where on the evaluation of various parameters, of financial credibility and stakes of the client, the bank may not charge any guarantee commission which completely depends upon its evaluation, of a particular client - This is also evident from the fact that, in some of the years, in assessee‟s own case, no charges have been paid on account of guarantee commission - when there was an internal CUP in the form of bank guarantee charges, charged by the bank from the assessee, the same ought to have been first analysed and examined wherein the guarantee commission charged ranged between 0.25% to 0.35% - In the earlier years, the Tribunal has deleted the similar addition and no question of law on this score has been raised by the Department - No upward adjustment in the ALP in relation to charging of guarantee commission over and above 0.20% can be made - Decided against Revenue. Weighted deduction u/s 35(2AB) - Held that:- Following ACIT vs Torrent Pharmaceuticals Ltd. [2009 (11) TMI 819 - ITAT AHMEDABAD] - The relevant provisions of the Act did not contain any specific condition that the deduction u/s 35(2AB) and accordingly the claim of the assessee for deduction u/s 35(2AB) will be restricted to the amount of R & D expenditure as contained in the certificate - Even the expenditure is not included in the said certificate was eligible for deduction u/s 35(2AB) in respect of the said expenditure - The claim of the assessee of having incurred the expenditure has not been examined either by the AO or by the ld. CIT(A) - The issue was restored for fresh adjudication.
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