TMI Blog2011 (3) TMI 1560X X X X Extracts X X X X X X X X Extracts X X X X ..... ories by the people of India, which are being printed and published by the appellant and yield revenue to it. ii) Without prejudice to the above, in not allowing the entire expenditure of ₹ 1,48,15,150/- incurred thereon instead of ₹ 37,03,783/- claimed as 1/4th of the expenditure and rest being treated as deferred revenue expenditure or alternatively treating the entire expenditure as capital expenditure and allowing entire expenditure as capital expenditure and allowing depreciation @ 25% thereon being intangible assets. iii) in not allowing the decisions of various Income Tax Tribunals and Gujarat High Court on the issue under consideration. The appellant craves leave to add, alter, substitute or delete any of the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges segment of telephone directory business and it was submitted that as per note to account No.5.2, under Miscellaneous expenditure , the auditor has clearly mentioned that their total advertisement and brand building expenses are of ₹ 4,47,34,823/- out of which expenses of ₹ 1,48,15,150/- was attributed towards brand building expenses incurred for building brand GETIT and from such note it is clear that it is not an expenditure incurred by the company for acquiring the brand GETIT and such expenditure was incurred for popularizing the usage of Yellow Page Directory by people of India. The management of the company under prudent accounting policy has put such expenditure under Miscellaneous expenditure and has charged it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is not allowable on such expenditure. The assessee is aggrieved, hence, in appeal. 3. Learned AR of the assessee has reiterated the submissions made by the assessee before the Assessing Officer and CIT (A). Learned AR has also relied upon the decision of ITAT Delhi Bench in the case of ITO vs. Spice Communications Ltd. [2010] 35 SOT 78 (Del) wherein the expenditures on brand building were held to be revenue in nature. Learned AR also relied upon various judicial pronouncements which were relied upon before learned CIT (A). Copy of written submissions of learned AR are placed at pages 29-33 of the paper book. Thus, it was submitted by him that the claim of the assessee has wrongly been disallowed. He also submitted that in subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11,363 has been carried as miscellaneous expenditure to be charged over a period of next three years. 7. As it can be seen from the above note, the total expenses of the assessee on advertisement and brand building were incurred at ₹ 4,47,34,823/- and out of the said total amount, a sum of ₹ 1,48,15,150/- was segregated by the assessee on account of expenses incurred for brand building. The nature of these expenditure as was seen from the details was almost like advertisement expenditures. The other expenditures have been treated by the Assessing Officer on advertisement as no disallowance has been made in this regard. It has not been brought on record as to how these expenditures can be said to be giving enduring benefit to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that 10 per cent of expenses have been incurred towards brand building. The Assessing Officer has not been able to justify as to how the 10 per cent of the total advertisement and sales promotion expenses can be allocated towards capital expenditure when the assessee has not acquired any brand from any outside party. The expenditure on advertisement and sales promotion constituted expenditure incurred on press advertisement, hoardings, neon signs, brochures, etc. The press advertisements could not be considered as capital asset acquired by the assessee. Similarly, putting hoardings and neon signs could not also be considered on capital field. The expenditures do not lead to create any capital asset to the assessee. Even there is no benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
