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2018 (10) TMI 1491 - AT - Income TaxNature of expenditure - legal and professional charges paid to Reach (Registration, Evaluation, authorization and Restrictions of Chemicals) which is the European Regulatory Authority - revenue or capital expenditure - Held that:- In the instant case, the assessee has also incurred similar type of expenses for marketing his product in European Countries after getting the certification from Reach and after making the necessary payment to the said association as well as making the payment to the firm who assisted for the registration in the Reach. Both the expenses are correlated with each other. These expenses are revenue in nature and in this regard. Disallowance of 4/5 professional charges paid to M/s. Avalon Consulting - Held that:- There should not be split of revenue expenses accepted some exceptional cases such as amortization etc. The concept of advertisement expenses is also similar to the study mentioned above for the future purpose mentioned above related to the existing business of the assessee. The Hon’ble Madras High Court in the case of CIT Vs. Brilliant Tutorials Pvt. Ltd. (2007 (1) TMI 147 - MADRAS HIGH COURT) and Cox & Kings (2011 (9) TMI 1175 - ITAT MUMBAI) has allowed the claim of the assessee in similar circumstances. Thus claim of the assessee is not liable to be declined. The expenses is also liable to be allowed in the relevant year in accordance with law. Accordingly, this issue is decided in favour of the assessee. Addition u/s 14A - Held that:- Since, the assessee did not earned the exempt income, therefore, there should not disallowance u/s 14A.
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