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TMI Blog2014 (1) TMI 1431X X X X Extracts X X X X X X X X Extracts X X X X ..... erage and commission of Rs.18,80,782/-, disregarding the fact that the expenditure in question, which is incurred for an enduring benefit has not been debited to P&L account. 2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment order dated 15/03/1999 determining a total income of Rs.39,01,170/- was passed. Against this, assessee went in appeal before the CIT(A). The order was set aside to the Assessing Officer(AO) by the ld.CIT(A) and subsequently an order u/s.143(3) r.w.s. 250 of the IT Act (hereinafter referred to as 'the Act') was passed on 12/03/2003. Against this, the assessee filed an appeal before the ld.CIT(A), who after considering the submissions, deleted the disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided this issue in favour of assessee in paragraph No.14 of the order by observing as under:- "14. To conclude, the position emerging from the above discussion can be summed up as follows:- - the nature of the expenditure treated as a "deferred revenue expenditure" in the books needs to be properly analysed before taking a view on its allowability or otherwise under the provisions of the Act; - where such expenditure results in the creation of any capital assert (tangible or intangible), a case can be made out to treat the same as a capital expenditure with corresponding allowability of depreciation in accordance with law; - in cases where the nature of the revenue expenditure is such that the same can be clearly and unambiguously iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60 ITR 52 (SC), while deciding the nature of the amount spent towards stamps, registration fees, lawyer's fees, etc. for obtaining loan, the Supreme Court observed as follows: 'A loan may be intended to be used for the purchase of raw material when it is negotiated, but the company may, after raising the loan, change its mind and spend it on securing capital assets. Is the purpose at the time the loan is negotiated to be taken into consideration or the purpose for which it is actually used?... the purpose for which the new loan was required was irrelevant to the consideration of the question whether the expenditure for obtaining the loan was revenue expenditure or capital expenditure. To summarise this part of the case, we are of the opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isement at the cost of the exchequer. The assessee had incurred the expenditure on advertisements for collecting fixed deposits and the advertisements were statutory advertisements and, therefore, the provisions of section 37(3A) read with section 37(3B) were not applicable to the said expenditure'. Considering the ratio laid down in the abovesaid decisions, we are of the view that when the Tribunal has recorded a finding that the expenses relating to obtaining fixed deposits are closely linked with the business requirement of the assessee, such expenses are allowable expenses. We, therefore, hold that the Tribunal was right in holding that the expenses for obtaining fixed deposits from the public is revenue in nature. Accordingly, we answ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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