TMI Blog2011 (7) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... of depreciation in the order. Therefore, no perversity is found in said order. Advertisement expenses - Capital or revenue expenditure - Held that:- Cost of a signboard cannot be contemplated as a capital expenditure because the benefit accruing to the assessee cannot be said to be in the capital field. It merely facilitates the assessee’s trading operations. Thus rightly held as revenue expenditure See Empire Jute Co. Ltd. vs. CIT [1980 (5) TMI 1 - SUPREME Court] - Decided in favor of the assessee - ITA No. 169 of 2011 - - - Dated:- 7-7-2011 - MR. ADARSH KUMAR GOEL MR. AJAY KUMAR MITTAL JJ. Present: Mr. Tejinder K. Joshi, Standing Counsel for the appellant. AJAY KUMAR MITTAL, J. This is revenue s appeal filed under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed its return on 31.10.2005, declaring loss of Rs.25,28,901/-. The return was processed under Section 143(1) of the Act. Assessment under Section 143(3) was completed vide order dated 26.12.008 at an income of Rs.61,29,390/- whereby the assessing officer made certain additions, i.e. Rs.79,84,438/- on account of difference in Arm s Length Price; Rs. 1,00,000/- on account of disallowance of advertisement and three more amounts of Rs. 4,80,000/-, 52,416/-, and 41,434/- on account of disallowance of Diwali expenses, Refreshment expenses and Printing and Stationery expenses, respectively. 4. The assessee filed appeal before the Commissioner of Income Tax (Appeals) [for short the CIT(A) ]. The CIT(A) partly accepted the appeal vide order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct profits of the assessee, the revenue had relied upon the instances of the following three Companies. The data of the said Companies is reproduced here-in-below: Sr. No. Comparable Companies S To. OP/TC (%) Wages/TC (%) Depr/TC (%) 1. Allsee Technologies Ltd. 57.58 30.49 48.73 8.74 2. Wipro BPO Solutions Ltd. 647.72 27.50 44.36 9.57 3. Cepha Imaging Pvt. Ltd. 10.04 47.70 32.97 13.98 Average 35.26% 9. By relying upon the above, the Revenue had tried to convince the Tribunal that average of 35.26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Average 21.97 11. The findings recorded by the Tribunal in that behalf are as under: We have examined the aforesaid aspect carefully. The selection of three Comparables made by the assessee, in our view, is also skewed because it leaves out the case of Asian Cerc Technologies Limited wherein the turnover is almost near-about the turnover of the assessee-company. Of course, the three cases selected by the assessee do merit consideration as comparable cases. Apart from the three cases adopted by the assessee and the case of Asian Cerc Technologies Limited, the other seven cases enumerated in para 7.4.2 of the T.P.O s order are not strictly comparable having regard to their level of operation and turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicate the second objection raised by the assessee. The assessee had explained before the lower authorities that for the Comparability analysis two adjustments are required to be made to the profit disclosed by the assessee. Such adjustments were on account of two expenses of extra-ordinary nature, namely, Charity Donation, amounting to Rs. 1,09,49,785/- and Depreciation on administrative assets amounting to Rs. 31,82,586/-. It has been explained that such expenses are generally not found incurred in other similarly placed concerns. The TPO has accepted the plea of the assessee regarding charity donation as is evident from the working done in para 9 of his order, and accordingly there is no dispute on this aspect. The dispute survi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in principle the TPO accepted the plea of the assessee as reflected by the discussion in para 8.2 of his order but inexplicably he has not considered it while determining the ALP in para 9 of the order. Notwithstanding the aforesaid, on merits also, we find enough merit in the plea of the assesse for adjustment of such depreciation in order to compare the profit disclosed by the assessee. The assessee has to succeed on this plea. 14. No illegality could be pointed out by the learned counsel for the appellant in the above findings of the Tribunal so as to persuade this Court to warrant inference therewith. Thus, no substantial question of law, as claimed on this issue, arises for consideration by this Court. 15. The last question is, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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