TMI Blog2005 (7) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... be deferred revenue expenses of the P L Account if the expenses allowable u/s 37(1) of the Income-tax Act. For the purpose of Income-tax Act, we have to examine the nature of the expenses. If the nature of the expenses are allowable as incurred for business purposes, it should be allowed in toto irrespective of the fact that it was claimed to be deferred revenue expenditure for the purpose of the Companies Act or to show higher book profit to its shareholders. Since the Assessing Officer has applied his mind while dealing with the issues and duly considered the explanations of the assessee, we do not agree with the findings of the CIT that the assessment order is erroneous and prejudicial to the interests of the revenue. We, therefore, hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer should not be enhanced or modified being erroneous and prejudicial to the interests of the revenue. In response to the show-cause notice, the assessee submitted the details of payments made for deferred revenue expenses in chart and the copies of bills of the deferred revenue expenses. The CIT examined the explanations of the assessee, but, was not convinced with it and he set aside the assessment order with a direction to finalize the assessment de novo as per law, after making enquiry and investigation. 4. Now the assessee has preferred an appeal before the Tribunal with the submissions that during the course of the assessment proceedings, assessee has furnished the detailed explanations with regard to the deferred revenue expenses an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee also filed details of expenses along with letter dated 22nd December, 1998. All these evidences were examined by the Assessing Officer before allowing the claim of the assessee. The learned counsel for the assessee has further invited our attention to the order of the CIT(A) in which he has deleted the additions made by the Assessing Officer while passing a consequential order. The copy of the order of the CIT(A) is also placed on record. The learned counsel for the assessee has contended that the assessee has deferred the revenue expenses to show its book profits, but, in fact he has incurred all these expenses during the year and as such the same are allowable under section 37 of the Act. In support of his plea that once the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, the same cannot be treated to be erroneous by the CIT simply because the order should have been written more elaborately. In support of this contention, the learned counsel for the assessee has relied upon the decision in the case of CIT v. Gabriel India Ltd. [1993] 203 ITR 108 2 and Patel Cotton Co. Ltd. v. Asstt. CIT [1993] 64 ITD 273 (Mum.). It was further contended on behalf of the assessee that there are two views possible in a case, than, mere fact that the Assessing Officer has taken one view, which is not acceptable to the CIT, the CIT cannot hold the assessment order as erroneous and prejudicial to the interests of the revenue. In support of this contention, the learned counsel for the assessee has relied upon the following ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer. The Assessing Officer has examined the same and after being convinced with it, he allowed the claim of the assessee, after having noticed that all these expenses which were claimed by the assessees are allowable expenses under section 37(1) of the Income-tax Act. It is also noticed from the order of the CIT that he has observed that incentives and discounts were claimed in advance without effecting the sale. Whereas the facts are otherwise, as the incentives and discounts were claimed after the sales was effected. The details of incentive and discounts were furnished before the Assessing Officer. Other expenses were also explained to the Assessing Officer during the course of the assessment proceedings. We have also carefully examine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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