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TMI Blog2018 (2) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... rd these appeals together and disposing of the same by this common order. 2. Smt. C. Yamuna, the Ld. Departmental Representative, submitted that the assessee incurred expenditure towards brand building. According to the Ld. D.R., the assessee clarified before the Assessing Officer that the brand building expenditures are related to advertisement with regard to brand promotion expenses. After considering the nature of expenditure, according to the Ld. D.R., the Assessing Officer found that the owner of the brand collected royalty from the assessee for usage. The expenditure said to be incurred by the assessee for building brand name would definitely increase the value of brand. According to the Ld. D.R., brand value is an intangible asset. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that while making advertisement, it is inevitable that the brand name needs to be displayed, therefore, there would be indirect promotion of brand. It does not mean that the expenditure is only for building the brand promotion. In fact, according to the Ld. representative, the expenditure was incurred only for advertisement for sale of their products and not for brand promotion. The consequential promotion of brand is inevitable since the assessee has to necessarily display the brand in all its advertisements. The Ld. representative placed his reliance on various judgments of the Apex Court, including Empire Jute Co. Ltd. v. CIT (1980) 3 Taxman 69 and Alembic Chemical Works Company Limited v. CIT (2002-TIOL 160) and the decision of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction on the ground that the assessee did not acquire any capital asset when it purchased the loom hours and the expenditure was incurred in running the business or working it with a view to producing day-to-day profits. The Tribunal also confirmed the order of the Appellate Assistant Commissioner. However, on reference to High Court, the order of this Tribunal was reversed by the High Court placing reliance on the judgment of Supreme Court in CIT v. Maheshwari Devi Jute Mills Ltd. (1965) 57 ITR 36. On further appeal before Supreme Court, it was found that the judgment of Maheshwari Devi Jute Mills Ltd. (supra) cannot be regarded as an authority for the proposition that payment made by the assessee for purchase of loom hours would be capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business in more efficient and profitable manner leaving the fixed capital untouched, the expenditure would always be on revenue account. 7. In view of the above observation made by the Apex Court, it is obvious that when the assessee incurred expenditure in the course of earning profit, whether mere facilitating the assessee in carrying out trading operations or the business in a more effective manner, then the expenditure is only on the revenue account. A mere incidental benefit or enduring benefit or commercial advantage cannot result in disallowing the claim of the assessee. In the case before us, the assessee incurred expenditure in making advertisement in respect of the products made by it and sale of the same. While making adverti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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