TMI Blog2014 (9) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... expense is a day to day expense incurred for running the business and improving sales - every year, the assessee has been incurring substantial expenditure on advertisements - Keeping in view the nature and character of the assessee’s business, every year expenditure has to be incurred to make and keep public informed, aware and remain in limelight - This requires continuous and repeated publicity and advertisements to remain in public eye, to do business by attracting customers - It is an expenditure of trading nature – thus, the order of the Tribunal is upheld – Decided against revenue. - ITA No. 597/2014 - - - Dated:- 19-9-2014 - Sanjiv Khanna And V. Kameswar Rao,JJ. For the Appellant : Ms. Suruchi Aggarwal, Sr. Standing Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge the factum of incurring the expenditure of sales promotion schemes advertisement of its products in newspapers, electronic media, neon signs and banners etc. have not been dated. In these facts it is an admitted position that the expenses are incurred wholly and exclusively for the business of the assessee and is not a capital expenditure nor a personal expense. No reasoning or basis has been given by the A.D. to disallow 25% of the expenses claimed as if the expenditure is capital in nature then depreciation should have been allowed and if the expense is being treated as deferred revenue expenditure then it is contrary to the settled legal position. In the facts as they stand the expenses incurred for brand building exercise of Spice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to a bunch of appeals with the lead case being ITA 1820/2010 entitled CIT vs. City Finance Consumers Finance Ltd. 335 ITR 29 Delhi had held that expenditure on advertising and sales promotion is to be treated as business expenditure u/s 37 of the Act. The Jurisdictional High Court therein considering the appeal of the Revenue in regard to the claim of the assessee before the A. O. pertaining to an expenditure of ₹ 4.18 lakhs for advertising and sales promotion wherein the A. O. had relied upon the judgement of Apex Court in Madras industrial Investment Corporation Vs. CIT 225 ITR 802 (SC) upheld the order of the Tribunal which had confirmed the order of the CIT(A) who had held that there is no concept for deferred revenue expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961 ( Act in short) on account of the said addition. 4. The Tribunal has rightly noticed and referred to the decision of the Delhi High Court in Commissioner of Income Tax Vs. Pepsico India Cold Drink Ltd. in ITA No. 319/2010, decided on 30.03.2011 wherein, the judgment of the Supreme Court in Madras Industrial Investment Corporation Vs. Commissioner of Income Tax, 225 ITR 802 (SC) was examined and it was observed that the assessee is entitled to claim deferred revenue expenditure but the Assessing Officer cannot treat the revenue expenditure as deferred revenue expenditure. The reason is that the Act itself does not have any concept of deferred revenue expenditure. Even otherwise, there are a number of decisions that the adve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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