TaxTMI 
TaxTMI 
2013 (7) TMI 166
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....c. 35D of the Income-tax Act. The learned CIT(A) ought to have accepted the plea of the appellant that the said expenses represent the amounts allowable in accordance with the provisions of sec. 35D and are eligible for deduction under the said section. 3. After hearing both the parties, we are of the opinion that similar issue came for consideration before this Tribunal in assessee's own case in ITA Nos. 1844/Hyd/2011, 1845/Hyd/2011 and 1847/Hyd/2011. The Tribunal vide order dated 29.4.2013 held as follows: "14. We have heard both the parties and perused the material on record. Admittedly, the assessee's claim u/s. 35D was in the A.Y. 2006-07. In the A.Y. 2006-07 the CIT(A) allowed the claim of the assessee by observing as follows: "5.2....
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....e visibility of their products and thereby increase their top-line. Such expenditure invariably represents either outlays on a major advertising campaign undertaken in different media with a view to enhance the visibility or modify the image of a product; holding of contests to expand the reach and promote sales, celebrity endorsements, one-time sponsorship of mega events, dealership incentives and other such significant sales promotion initiatives which go to increase and expand the brand recall of the products of a particular company [Sanjeeva Narayan; The Chartered Accountant, May 2006, 1626] Although the nature of such expenditure is entirely revenue, keeping in view the fact that the benefits arising therefrom are expected to be deriv....
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....te to the context. Thus while, for the purpose of the issue under consideration, the test of the enduring benefit fails at the initial stage itself, and even if the said test were to be explicitly applied it cannot be said that the said expenditure is of a capital nature. Further, no capital assets come into being as a result of the same and consequently the same cannot be classified as a capital expenditure. The expenditure is essentially revenue in nature and the decision to treat the same as deferred revenue only represents a management decision taken in view of the magnitude of the expenditure involved. For the purpose of allowability of any expenditure under the Income-tax Act 1961, what is material is the classification between the c....
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....over past editorial contest for a consideration of Rs. 9.80 Crore. There is no doubt about the fact that the brand as well as the past editorial contest will have benefits pertaining to the appellant for more than one financial year. 5.3 In view of the aforementioned judgements of the various courts, it would not be proper to debit the entire amount in one year as it would violate the matching principle. On the other hand, it is clear that the benefits of the expense will accrue to the appellant over many financial years. But. it cannot be quantified accurately as to how much would be the benefit in a particular financial year. unlike in bonds, where quantifications are simple and accurate, in this case, it is ultimately the judgement of t....
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.... follows: "6. We have considered the rival submissions and perused the materials available on record. As per sec.35D of the Income tax Act, 1961 (the Act), expenditure can be allowed for amortization in the case of issue of shares for public subscription. As per those provisions, such expenses should also be in the nature of underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus, etc. In case of any issue of share capital after the commencement of business, the purpose of raising such share capital should be for expansion of the undertaking. As per the notification issued by the SEBI dated 26-8-2009, the public offer has been defined "as an offer of specified securities by a listed....
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....with the setting up of a new unit in case the shares were issued after the commencement of the business. It is an undisputed fact that the share capital in question, was issued by the assessee in the instant case after the commencement of business, and it is meant for complying with the SEBI guidelines with regard to proportion of promoters' holding as against total capital base. As such, it cannot be said that the issue of share capital in the instant case is for expansion of the undertaking. In any event, the assessee could not bring anything on record to show that the assessee has extended its undertaking by going in for the share issue in question. We find from the Director's Report filed in the paper book that as against Rs. 51 crores ....