TMI Blog2015 (6) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... st year of operation of the Company the advertisement expenditure would render enduring benefit to the company. Moreover, the AO has failed to define the period over which such benefit is expected to be incurred. Thus, placing reliance on the judicial precedents specifically the decision jurisdictional Delhi High Court in case of Salora International (2008 (8) TMI 138 - DELHI HIGH COURT ) and Brilliant Tutorials P Ltd (2007 (1) TMI 147 - MADRAS High Court ) which is on similar fact pattern, the claim of advertisement expenditure made by the appellant is correct and the addition made by the AO is deleted - Decided in favour of assessee. Disallowance of filing fee - Held that:- CIT(A) has allowed the relief on the basis of submissions of the assessee that these expense were inadvertently reported in audit report and actually these related to financial year 2008-09. We do not find any infirmity in his findings - Decided against revenue. Depreciation on accessories and peripherals of computer - Held that:- The accessories and peripherals of computer provide input processing, storage and various output devices. The output devices such as printers, scanner etc. are computer periph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as on merits in deleting the addition on account of advertisement expenditure amounting to ₹ 29,06,982/-. 2. On the facts and in the circumstances of the case, the Id. CIT(A) has erred in law as well as on merits in deleting the addition on account of depreciation on printers and other peripherals of ₹ 60,4101-. 1.3 I.T.A.No. 4443/Del/2013: 1. On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of ₹ 25,47,682/- on account of advertisement expenses being capital in nature. 2. On the facts and circumstances of the case, the Id. CIT(A) has erred in deleting the addition of ₹ 43,672/- on account of excess depreciation on printer and other peripherals. 2. At the time of hearing, Ld. D.R. first took up I.T.A. No. 5661/Del/2011. At the outset, he argued that the assessee had debited an amount of ₹ 1,34,35,168/- as management fee which was based on an agreement dated 27.03.2008 and the bills for management fee were all dated 31.03.2008. It was submitted that in this period of 4 days, what management service were rendered to the assessee, is not clear as even the bills raised by respective parties do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies i.e. payer and payee are Indian domestic companies and expenses incurred by one company had become income of another company. Our attention was invited to paper book page 133 where a part of copy of balance sheet relating to payee company was placed and our specific attention was invited to the fact that income received by this company on account of management fee has been reduced from its expense and thereby the payee company had declared more profit to this extent and, therefore, it was submitted that there was no tax advantage to the group as a whole. In view of the above, it was submitted that Ld. CIT(A) after going through the whole facts and circumstances has arrived at the correct decision. 3. As regards the 2nd issue of advertisement expenses, the Ld. A.R. submitted that the assessee had incurred expenditure for its own business and our attention was invited to paper book page 176-177 to highlight the copy of advertisement material. It was further submitted that no benefit of enduring nature was being created by the assessee as once the student gets admission, he is not concerned with the assessee and therefore there is no brand building on account of advertisement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on record and judicial precedents relied upon by the appellant. During the course of the appellate proceedings the appellant has rebutted the allegations made by the AO as follows: a) Appellant duly submitted details of the expenses comprising of the management expense along with documentary evidence to support the incurrence of such expenditure by SOIPL. b) Appellant submitted a detailed note to substantiate the necessity of cross charge of expenditure incurred by SOIPL to the appellant and duly demonstrated that the management fee has been incurred wholly and exclusively for the purpose of its business. In this regard, the appellant has appropriately placed reliance on various judicial precedents which support genuineness of the expenditure. c) Further the appellant has also appropriately clarified that the quantum of commission income earned by the appellant since the two components are computed based on different variables VIZ. number of students counseled during the year vs. number of students who took admission. d) The appellant has appropriately supported its claim of expenditure with judicial precedents which have held that reasonableness of the expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 5.4 Ground No.3 has been decided by Ld. CIT(A) by holding as under: During the course of the assessment proceedings, the AO observed that as per clause 17(a) of the Tax Audit Report pertaining to A.Y. 2008-09 the appellant had deposited filing fee of ₹ 1,22,500 with the Registrar of Companies for increase in authorized share capital of the Company. Since the same is in the nature of a capital expenditure, hence, the AO disallowed the same U/s 37 of the Act. In this regard, the appellant submitted that the filing fees paid by the appellant pertained to increase in the authorized share capital of the Company in the Financial Year 2008-09 which was inadvertently reported in the Tax Audit Report pertaining to Financial Year 2007- 08. Further, the appellant also confirmed that the filing fee paid by the appellant was duly disallowed in the computation of taxable income for the assessment year relevant to Financial Year 2008-09. To support the above contention, the appellant submitted the following documents: a. Form 5 filed with the Registrar of Companies b. Challan tiled with Ministry of Corporate Affairs evidencing that the filing fee was paid on 14.05.2008. c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s sister concern in my order dated 23.9.11 vide Appeal 0.118/2010- l l for the A.Y.2008-09. Hence, these grounds of the appeal are allowed. Ground No.3. I have examined the issue and have also considered the submission made by the appellant as well as facts stated in the assessment order, on the same including all relevant material placed on record and judicial precedents relied upon by the appellant. The accessories and peripherals of computer provide input processing, storage and various output devices. The output devices such as printers, scanner etc. are computer peripherals and form essential parts of the computer. These output devices cannot work in isolation and also working on computer system without an output device such as printer would be futile. In view of the same, the claim of depreciation at 60 percent on printer, scanner, and other computer peripherals by the appellant seems justified. The same position has been accepted by various Tribunals wherein it has been held that computer peripherals such as routers, switches, printers etc are eligible for depreciation at the rate of 60 percent. In view of the same, the claim of depreciation by the appellant is cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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