Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 914 - AT - Income TaxExpenditure on FCCB and debenture issue - CIT(A) allowing expenditure under section 35D considering the expenditure as public issue - Held that:- Qualified Institutional Buyers (QIBs) are a class of investors as a part of the large investor community and the companies sought for QIB issues because the funds can be raised within a short span. This is an extremely important investment for larger investors and since the buyers are only a class of investors, the issue of shares to QIB have been considered as public issue. The expenses in connection with public issue of shares or debentures of the company are allowable. Reliance is placed on CIT v. Shree Synthetics Ltd. [1985 (11) TMI 45 - MADHYA PRADESH High Court]. Hence on the merits of the issue, the QIB expenditure can be treated as revenue expenditure and eligible for deduction under section 35D of the Income-tax Act is confirmed. - Decided against revenue. Expenditure on account of the editorial content and brand right expenditure - revenue v/s capital expenditure - CIT(A) allowed assessee claim - Held that:- Assessing Officer disallowed the expenditure on the grounds that the expenditure has not been claimed under section 35A. It is pertinent to note are ephemeral and transitory in nature in as much as they are a part of a continuous process and need to be expended in order to generate and increase the brand recall and sustain it in the minds of customer. The Supreme Court in the case of Alembic Chemical Works Co. Ltd. v. CIT [1989 (3) TMI 5 - SUPREME Court] has itself observed that the idea of 'once for all' payment and 'enduring benefit' are not to be treated as something akin to statutory conditions ; nor are the notions of 'capital' or 'revenue' a judicial fetish. What is capital expenditure and what is revenue are not eternal verities but must needs to be flexible so as to respond to the changing economic realities of business. The expression 'asset or advantage of an enduring nature', was evolved to emphasise the element of a sufficient degree of durability appropriate to the context. The expenditure is essentially revenue in nature and the decision to treat the same as deferred revenue only represents a management decision taken in view of the magnitude of the expenditure involved. The expense in question is to be treated a deferred revenue expenditure and allowed as claimed by the appellant. With respect to Asian age brand rights and editorial contends rights, we find that the Commissioner of Income-tax (Appeals) has allowed the Asian age brand rights and editorial contents rights in the assessment year 2006-07 and the department did not file appeal accepting the order of Commissioner of Income-tax (Appeals)and hence is estopped from filing appeal on the same issue in this year (being subsequent year). - Decided against revenue.
|