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2017 (11) TMI 1284 - AT - Income TaxAddition being 2/3rd of the expenditure incurred by the assessee towards advertisement in media/magazine - Held that:- The facts are not in dispute that the assessee has incurred this expenditure mainly on brand promotion during the year including advertising in Media/ Magazine. It is also not disputed by Revenue. Now before us, that this expenditure is not a corporate advertising films, is in respect of ongoing business. Once, this is for the business and expenditure incurred on brand advertisement, the same is to be allowed as Revenue in nature. Respectively, following Hon’ble Bombay High Court in the case of Asian Paints India Limited (2016 (11) TMI 258 - BOMBAY HIGH COURT) we confirm the order of CIT(A) allowing the claim of the assessee and dismiss this issue of Revenue’s appeal. Revenue’s appeal is dismissed. Disallowance of expenses relatable to exempt income invoking the provisions of section 14A read with rule 8D - Held that:- AO despite the fact that all the books of accounts were produced before him, he could not point out any nexus with the exempt income and that of the expenditure relatable to this exempt income. Even the Hon’ble Supreme Court in the case of Godrej & Boyce Mfg. Co. Ltd. (2017 (5) TMI 403 - SUPREME COURT OF INDIA ), has clearly laid down the principle that the satisfaction of the AO must be there for making disallowance under section 14A of the Act read with Rule 8D of the Rules. In the present case, the satisfaction is missing in all the years. Accordingly, we allow the appeals of the assessee on this issue except suo moto disallowance of a sum of ₹ 3,81,528/-in AY 2008-09 be enhanced to as sum of ₹ 6,48,945/- as it has revised the disallowance. The AO will recompute the income accordingly in all these years.
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