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2014 (6) TMI 844 - ITAT MUMBAIExpenses on advertisement - creation of brand value - capital or revenue in nature - Allowability of expenses u/s 37(1) of the Act - Whether the assessee's case can be said to be covered in its favour by the tribunal's order deciding the assessee's appeal against the revision order u/s. 263 for AY 2006-07 – Held that:- What is to be seen is whether any capital asset stands acquired by the assessee through its concerted advertisement campaign - No evidence in this regard has been brought on record. Though ordinarily, the onus to prove its return, and the claims preferred thereby, is only on the assessee Relying upon CIT v. Calcutta Agency Ltd. [1950 (12) TMI 4 - SUPREME Court] - the assessee to have discharged the initial onus on it; the genuineness of the expenditure, or of it having been incurred for the purpose/s of business, as afore-stated, being not in dispute - no holistic view in its respect has been taken or sought to be adopted by it, enquiring into the details of the exercise undertaken by the assessee, but by viewing only one year at a time, even as the same would, as it appears to us, is in the nature or assumes the nature of a project. Apart from the coming into existence of a brand value, there are issues with regard to its valuation and cost - as a relationship between the expenditure and the asset, assuming its existence, has to be direct for it to be considered as forming part of its cost, and which cannot be said to be so in the instant case - Just because an expenditure is debited in books as toward brand building, which it purportedly is, and a statutory recognition has since been accorded to such intangible assets, as a 'brand', would not by itself imply that an advantage in the capital field, or of enduring value to the business, has arisen to the assessee upon incurring the expenditure - there was no basis to hold that the expenditure incurred in the regular course of its business by the assessee, has translated or manifested in, or resulted in the acquisition of, a capital asset or a in a profit making apparatus by the assessee, or of it being in the nature of capital expenditure, i.e., per se - it has been rightly treated by it as revenue expenditure, admissible u/s.37(1) of the Act. We decide accordingly – Decided against Revenue.
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