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2017 (7) TMI 421 - ITAT DELHIExpenses incurred on market research - revenue expenses - whether expenses not to be amortized u/s 35D(2)(a)(iii) as held by AO? - expenses incurred in connection with extension of its undertaking - Held that:- Bare perusal of the provisions contained u/s 35D invoked by the AO to amortize expenses incurred on market research goes to prove that the expenses must be incurred before commencement of the business or after commencement of the business but where there is an extension of undertaking or setting up of a new unit. In the instant case, AO has not made out any case if the assessee has incurred the expenses after the commencement of business in connection with the extension of his undertaking or in connection with its setting up a new unit. Moreover, marketing survey are conducted by the company on ad hoc basis / on day-to-day basis to achieve the target/to enhance sale and no enduring benefit in any manner used to be there. Moreover, to invoke the provisions contained u/s 35D, such expenses are required to be incurred before the commencement of the business or after the commencement of the business in connection with extension of undertaking or in connection with its setting up of a new unit, both these conditions are not fulfilled. So, the expenses cannot be amortized by invoking the provisions contained u/s 35D and ld. CIT (A) has rightly deleted the addition - Decided in favour of assessee.
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