TMI Blog2018 (2) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of the same. While making advertisement, the assessee has to necessarily display the brand. Even though there is incidental increase in value of brand by way of advertisement made by the assessee, the real benefit is only to carry out the business in an effective and profitable manner. The expenditure incurred by the assessee is in the course of earning of profit without touching the capital asset. In view of the above, this Tribunal is of the considered opinion that the expenditure incurred by the assessee is only revenue in nature. See Alembic Chemical Works Company Limited [1989 (3) TMI 5 - SUPREME Court] - Decided against revenue. - ITA Nos.613, 614 And 615/Mds/2017 - - - Dated:- 8-2-2018 - SHRI N.R.S. GANESAN, JUDICIAL MEMB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the expenditure cannot be allowed as revenue expenditure. Since the brand value is a capital asset, according to the Ld. D.R., any expenditure incurred for enhancing the value of such capital asset has to be necessarily treated as capital expenditure, therefore, the Assessing Officer has rightly disallowed the claim of the assessee. 3. On the contrary, Shri T.S. Subramaniam, the Ld. representative for the assessee, submitted that the expenditure incurred by the assessee is for advertisement and not for brand promotion. According to the Ld. representative, since the assessee has to necessarily make advertisement to sustain in the market, such expenditure has to be allowed as revenue expenditure under Section 37 of the Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtisement. While making advertisement, the assessee has displayed the brand name Jansons . In the books of account the assessee referred the expenditure as brand promotion expenditure. The Revenue by taking clue from the books of account, found that brand promotion is a capital asset, therefore, the expenditure would result in value addition to the brand, hence, it has to be treated as capital expenditure. The assessee claims before this Tribunal that entry in the books of account is not a determining factor. When the expenditure was incurred for marketing the products by way of advertisement, display of brand is inevitable, therefore, the expenditure has to be treated as revenue in nature. 6. We have carefully gone through the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted merely exploitation of the asset by permitting its use by another while retaining ownership. The Apex Court further found that the test for distinguishing whether the expenditure is capital or revenue is not a conclusive one. There is no all-embracing formula which can provide a ready solution to the problem. No touchstone has been devised. The Apex Court further observed that every case has to be decided on its own facts keeping in mind the broad picture of the whole operation in respect of which the expenditure has been incurred. The Apex Court further found that there may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, nonetheless, be on revenue account and the test of enduring benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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