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2019 (6) TMI 288 - AT - Income TaxAddition on account of pre-operative expenses - allowable business expenses - CIT-A deleted the addition - HELD THAT:- If the stated chronology of events is considered in the light of the remand report of the Assessing Officer, there remains no doubt that the assessee has commenced its business in earlier assessment year. Therefore, expenses considered as pre-operative expenses by the Assessing Officer have to be treated as legitimate business expenditure for the year under consideration. The findings of the ld. CIT(A) cannot be faulted with. Ground No. 1 according dismissed. Nature of advertisement expenditure - alleged that assessee is building a brand image of the parent company - revenue or capital in nature - - CIT-A deleted the addition - HELD THAT:- During the course of assessment proceedings, the case was referred to the TPO and the TPO framed order u/s 92CA(3) of the Act on 09.01.2014 and no adverse inference was drawn in respect of I.T. notification by the assessee during the year under consideration. This shows that the TPO was satisfied with the AMP expenses incurred by the assessee and did not make any adverse comment in so far as the issue of brand building is concerned. Thus public memory is very short and, therefore, the companies have to incur advertisement expenditure year after year to keep products fresh in the minds of the public. In our considered opinion, such expenditure cannot partake the character of giving any enduring benefit. In our considered opinion, the Assessing Officer has grossly erred in treating such expenditure as intangible asset and on facts of the case, the findings of the ld. CIT(A) needs no interference. Ground No. 2 stands dismissed.
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