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TMI Blog2011 (8) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... ,27,01,919/-. In the revised return, the assessee had amortized expenditure amounting to Rs. 1,15,16,377/- incurred on advertisements, ad films and website expenses over a period of 5 years. The department initiated scrutiny assessment proceedings and issued notice under Section 143(2) of the Income Tax Act, 1961 ("the Act" for short) on 16th September, 2008. The Assessing Officer (AO) proceeded to compute the assessment under Section 143(2) of the Act on a total income of Rs. 8,56,87,742/-. The AO noted that the expenditure on advertisement, ad films and website expenses were in the nature of capital expenses since they resulted in the earnings to the assessee for a number of years. Consequently, he computed income as per the original retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to depreciation @ 60% on computer peripherals, we rely upon the judgment of this Court in Commissioner of Income Tax v Citicorp Maruti Finance Ltd. (ITA 1712/2010 and ITA 1714/2010 decided on 9 th November 2010) and held that the computer peripherals are entitled to depreciation @ 60%. 3. Vide the said order dated 11th July, 2011, notice was issued to the respondent only to the limited question as to whether the expenditure incurred on ad film is to be treated as capital or revenue in nature. 4. We have heard the counsel for the parties on this issue. The assessee has placed reliance on the case of CIT v Geoffrey Manners & Co. Ltd. 315 ITR 134 (2009); Patel International Films Ltd. 102 ITR 219 and CIT v Patel International Films Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure. After considering the facts a learned Bench of this Court noted as under: "In other words, the asset that was acquired by the assessee company was a capital asset to be used for the purpose of advertisement of the business that the assessee company was going to carry on in future and, therefore, the expenditure will have to be regarded as a capital expenditure and not revenue expenditure." It would, thus be clear that the machinery purchased was not in respect of an ongoing business of the assessee, but in respect of the business which was going to be carried out in the future. In the instant case as the facts bear out, the advertisement was in respect of an ongoing business of the assessee herein. 4. A similar issue had com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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