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2016 (11) TMI 258 - BOMBAY HIGH COURTAddition on account of guarantee commission chargeable to its Associate Enterprises - Held that:- Tribunal by the impugned order held that the external comparable of HSBC Bank and Allahabad Bank to determine 3% as the ALP of the commission is not appropriate. This for the reason that the financial year to which the data obtained from HSBC Bank and Allahabad Bank are not indicated. Moreover, the circumstances in which the guarantee was given coupled with the terms and conditions of charging 3% commission by the two Banks not known. Besides, internal comparable available at almost the same rate of commission was not even examined. The impugned order further records that identical issue which arose for consideration before the Tribunal in the earlier Assessment Years and similar addition made by the Assessing Officer on account of commission was deleted. These orders of the Tribunal were accepted by the Revenue as no question of law on this issue was raised by the Revenue alluding to the fact that no appeal to the High Court was filed by the Revenue on this issue. Expenditure on advertisement on television - Held that:- The expenditure on corporate advertisement films is in respect of ongoing business. The expenditure for advertisement of a brand or corporate name of an existing ongoing business is in the nature of maintaining the brand and/or corporate image and it is not for creation of a brand. Further, the test of enduring benefit urged by the Revenue was considered by the Apex Court in Empire Jute Co. Ltd. vs. CIT [1980 (5) TMI 1 - SUPREME Court ] to hold that it is not a conclusive test in all cases so that such expenditure is always on capital account. The Court observed that what is to be examined is the nature of advantage obtained in the commercial sense by incurring the expenditure. If the expenditure consists of merely facilitating the assessee to carry on business more profitably leaving the fixed capital untouched, it would be on revenue account. The entire expenditure, the Court observed, has to be looked at from a businessman's point of view. In the present facts, the expenditure on account of corporate advertisement is to essentially maintain the corporate image and not create a corporate image. Further, the impugned order holds on facts that the corporate advertisement expenditure facilitates the business having a direct impact on sales and profitability of the Respondent-Assessee. Thus the view taken by the impugned order that corporate advertisement enhances the business of the Assessee resulting in increased sales of its product in Revenue field, is a possible view, on the present facts.
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