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TMI Blog2014 (1) TMI 1634X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case in deleting the addition of Rs. 13,79,421/- made by the AO on account of disallowance of advertising and publicity expenses." 2. Ld. DR relied on the order of assessing officer. 3. Apropos the revenue's ground about T.P. adjustment, ld. Counsel for the assessee contends that the assessee is a hundred percent subsidiary of Scholastic Inc., a US based multinational company, primarily engaged in publishing of books. The assessee, in India, is a publisher and distributor of books mainly catering to the market of school going children. The assesse followed TNMM method to determine the ALP with its AE transactions and in its return itself offered to tax an amount of Rs. 3,31,652/- calculated at 4.88% qua the bulk sale of books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of commercial reality which cannot be brushed aside. As the discounts are verifiable and quantifiable without any doubt the adjustments based on such reliable facts are certainly reasonably accurate adjustments as envisaged by Rule 10B(3)(ii). Even though the appellant has segregated these investments in terms of credit risk, big volume sales and saving on account of inventory obsolescence, these adjustments are part and parcel of "volume discount" in the common parlance. The volume discount is given basically to clear off the stock (saving on account of inventory obsolescence), to realize the money at one go (avoid credit risk), higher turnover (big volume sale). Therefore, the AO was not correct in disallowing the claim or volume discoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture, treating the same to be attributable to build up the brand name without citing any cogent reason. Assessee relied on Hon'ble Supreme Court judgment in the case of Empire Jute Co. 124 ITR 4 that the advertisement is qua the profit generating apparatus and various other judgments. Assessing officer, however, disallowed the expenditure. 3.4. In first appeal the ld. CIT(A) deleted the addition by following observations: "The law has settled on the issue of advertisement and publicity expenses. There are various judgments including that of Core Health Ltd. (supra) of the Gujarat High Court. The very fact that the appellant is incurring the advertisement expenses every year shows that the impact of the advertisement is lost soon after su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facilitate the assessee's trading operations. No fixed capital was created by this expenditure. We may also add here that in the Income-tax laws, there is no concept of deferred revenue expenditure. Once the assessee claims the deduction for whole amount of such expenditure, even in the year in which it is incurred, and the expenditure fulfills the test laid down under Section 37 of the Act, it has to be allowed. Only in exceptional cases, the nature mentioned in Madras Industrial Corporation (supra), the expenditure can be allowed to be spread over, that too, when the assessee chooses to do so." 4. We have heard rival contentions and perused the material available on record. Apropos T.P. adjustments, there is merit in the argument of ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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