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2019 (9) TMI 922 - HC - Income TaxTP Adjustment - rate of interest on loans given to Associated Enterprises -Tribunal restricting the rate @ LIBOR + 2% instead of 17.22% proposed by the Transfer Pricing Officer - HELD THAT:- It is an agreed position between the parties that the issue raised herein stand concluded against the Revenue and in favour of the Respondent – Assessee. This by the decision of this Court in the case of the same Respondent viz. Principal Commissioner of Income Tax v/s. Manugraph [ 2018 (11) TMI 1693 - BOMBAY HIGH COURT] as following M/S. EVEREST KENTO CYLINDERS LTD. [2015 (5) TMI 395 - BOMBAY HIGH COURT] Nature of expenditure - expenses incurred for DRUPA Exhibition – Germany - revenue or capital expenditure - HELD THAT:- Apex Court in Taparia Tools vs. JCTI [2015 (3) TMI 853 - SUPREME COURT] has held that there is no concept of deferred expenditure unless it falls in specified Sections. It held that ordinarily, if the Assessee claims the expenditure in a particular year, it has to be allowed. We note that the expenditure incurred on DRUPA Exhibition is in the nature of marketing and selling expenses. This expense is incurred with the hope of resultant increased sales. In fact this Court has in CIT V/s. Asian Paints (India) Ltd. [2016 (11) TMI 258 - BOMBAY HIGH COURT] while following its earlier decision in CIT v/s. Geoffrey Manners & Co. Ltd. [2009 (2) TMI 13 - BOMBAY HIGH COURT] held that expenditure incurred in making advertisement films resulting in building the firm’s brand image, is an expenditure in respect of an ongoing business and would be in the revenue field. There is no provision in the Act to disallow revenue expenditure under Section 37 of the Act in its entirety, in the year in which the expenditure is incurred, on the basis that it has to be allowed only to the extent benefit is received. No substantial question of law. TDS u/s 195 - Disallowance of reimbursement of expenses incurred by subsidiary of the Appellant - HELD THAT:- Tribunal found that there was no income embedded in the reimbursement of expenses made, therefore following the decision of the Apex Court in the case of GE India Technology Cen. (P) Ltd. v/s. Commissioner of Income-tax [2010 (9) TMI 7 - SUPREME COURT] it allowed the Respondent’s appeal as held that requirement of deducting tax at source under Section 195 of the Act would only arise, if the payment is shown to have embedded income, taxable in India. In this case it is found that the payment which has been made is in the nature of reimbursement and therefore no obligation to deduct tax at source arises. Consequently, no occasion to disallow expenditure under section 40(a)(i) of the Act can arise. Appeal admitted on the substantial question of law at (b) and (c).
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