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2015 (11) TMI 1193 - ITAT DELHI

2015 (11) TMI 1193 - ITAT DELHI - TMI - Addition made on account of advertisement expenses - revenue v/s capital expenditure - CIT(A) deleted the addition - Held that:- Facts in the instant case are identical to the facts in the case of assessee itself for the preceding year i.e. Assessment Year 2008-09 and for the reasons given therein, he concluded that even balance 25% of expenditure is also allowable as revenue in nature in the year under consideration. Since the impugned expenditure was tre .....

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ich it was incurred. In the light of decision of ITAT in assessee’s own case we have no alternative except to hold that the order passed by Ld. CIT(A) is in accordance with law being in consonance with the view taken by ITAT in assessee’s own case for the earlier year. We, therefore, dismiss the appeal filed by revenue. - I.T.A. No. 4283/Del/2013, C.O. No.172/Del/2014 - Dated:- 2-7-2015 - SHRI D. MANMOHAN, HON BLE VICE PRESIDENT AND SHRI N.K.SAINI, ACCOUNTANT MEMBER For The Appellant by : Shri J .....

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7; 13,06,184/-. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made on account of recruitment and training expense being capital in nature ₹ 6,60,826/-. 2. Facts necessary for the disposal of these appeals are stated in brief. The assessee is engaged in the business of retail trading of mobile handsets and other electronic items and their accessories and also carrying repair works. For the year under consideration, the assessee declared los .....

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of advertisement and marketing expenditure consisting of expenses on customer incentive scheme of ₹ 10,41,617/- and display through carry bags of ₹ 41,83,120/- and details of expenditure were submitted before the AO. It was contended that it pertains to brand building and it does not give the assessee any enduring benefit. It was therefore, contended that the entire expenditure is allowable as revenue in nature. It was also contended that the AO erred in holding that part of expendit .....

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et such as knowhow, copyright etc. whereas, the impugned expenditure is incurred in the normal course of business and by no stretch of imagination, it could have resulted in any intangible asset. Every expenditure incurred by a business concern, if incurred for the purpose of business, is bound to result in either direct or indirect benefit immediately or after some time and merely because assessee may be benefited after sometime, it cannot be termed as capital expenditure. The impugned expendit .....

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iture, for launch of a new product, is allowable as deduction. Attention of Ld. CIT(A) was also invited to several decisions of other Hon'ble High Courts / ITAT wherein it was held that expenditure incurred on advertisement and marketing cannot even be treated as deferred revenue expenditure even if the assessee has treated the same in that fashion in its books of accounts. It was mainly contended that 75% of expenditure having been allowed as revenue expenditure there is no dispute about th .....

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erved that the facts in the instant case are identical to the facts in the case of assessee itself for the preceding year i.e. Assessment Year 2008-09 and for the reasons given therein, he concluded that even balance 25% of expenditure is also allowable as revenue in nature in the year under consideration. Since the impugned expenditure was treated as revenue in nature, the alternative condition does not survive and accordingly, the claim of depreciation thereon was rejected. 7. With regard to r .....

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ciation @ 25%. 8. Here also, Ld. CIT(A) followed his own decision in the assessee s own case for the immediately preceding year i.e. Assessment Year 2008-09 while holding that the expenditure is revenue in character and is allowable as deduction as revenue in nature in its entirety in the 1st year. Consequently, the assessee is not entitled to claim benefit of depreciation on such expenditure. 9. Aggrieved by the order o Ld. CIT(A), revenue is in appeal contending, inter alia, that the advertise .....

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