TMI Blog2016 (12) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... tual cost of the asset.” This Court notices that there is no finding by the AO that the cost of the asset had been reduced or increased, as the case may be, on account of foreign exchange fluctuation. In the circumstances, the findings rendered are not only factual but, in our opinion, in conformity with the previous rule in Woodward (supra). The question of law sought to be urged by the revenue is answered against it. Allowance of advertisement and promotion expenses - Held that:- Under the Trade Mark Act, especially Section 48, as long as the arrangement existed, the assessee, who was a licensee of the products, was entitled to claim them as business expenditure though in the ultimate analysis they might have enhanced the brand of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed to the assessee? 3. Whether the advertisement and promotion expenditure incurred by the assessee have an enduring benefit to the assessee as it creates tangible asset being goodwill, reputation and credibility and if yes, whether it can be treated as capital expenditure? 2. So far as Question No.3 - Advertising and Promotion Expenditure is concerned, the issue has been concluded in an identical case in the matter of another group company, in Principal CIT v. M/s. Seagram Distilleries Pvt. Ltd. [ITA 224-225/2016, decided on 06.04.2016]. Question No.3, therefore, does not arise for consideration. 3. So far as Question No.1 is concerned, learned counsel relies upon another decision of the Supreme Court in Assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) was correctly applied. Section 43A of the Income Tax Act, 1961 which applies in such circumstances, inter alia requires the treatment of foreign exchange fluctuation to follow the purpose of the borrowing; yet it also highlights that, the amount by which the liability aforesaid is so increased or reduced during the previous year shall be added to, or, as the case may be, deducted from, the actual cost of the asset. This Court notices that there is no finding by the AO that the cost of the asset had been reduced or increased, as the case may be, on account of foreign exchange fluctuation. In the circumstances, the findings rendered are not only factual but, in our opinion, in conformity with the previous rule in Woodward (supra). T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
