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2016 (7) TMI 59 - AT - Income TaxProduct Development Expenses(PDE) - revenue or capital expenditure - Held that:- We find that while deciding the appeal for AY. 2007-08 [2015 (5) TMI 643 - ITAT MUMBAI ] the Tribunal had decided the issue in favour of the assessee held that the expenditure regularly incurred for sustaining the market and to push up the sales was not in the capital field but was essential and incurred in the ordinary course of business for promoting existing brands - Decided in favour of assessee Calculation of profit of Silvassa unit eligible for deduction u/s. 80 IB - allocation of various expenses debited to the advertisement and sales promotion - Held that:- The method adopted by the assessee for allocating the expenditure was more justifiable than the method adopted by the AO and confirmed by the FAA. So, we hold that there was no justification to recalculate the advertisement expenditure with regard sale of NABB products namely Frooty and Appy. Thus allocation in respect of Head Office corporate expenses and advertisement expenses made by the assessee are required to be accepted. - Decided in favour of assessee Treatment to the reusable artwork expenses - revenue or capital - Held that:- The Tribunal, while deciding the appeals for the AY. s. 1998-99, 2007-08 and 2008-09 had decided the issue in favour of the assessee held that as considering the average life span of such artwork, which was only less than six months, it could not be inferred that any capital apparatus had come into existence which could be the source of income generation for the assessee. The “artworks” was not capital expenditure - Decided in favour of assessee Disallowance of foreign travel expenditure - Held that:- Departmental authorities have not doubted genuineness of the incurring of expenditure. They have not brought anything to prove that the expenditure had element of personal use. It is the prerogative of an assessee to incur or not to incur an expenditure and to decide its business needs. Therefore, reversing the order of the FAA and following order of the Tribunal for the earlier AY. , we decide the third ground of appeal in favour of the assessee.
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