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TMI Blog2018 (10) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee filed return of income on 29.9.2012 declaring a loss of Rs. 74,69,222. The assessee during the relevant previous year did not show any income under the head 'income from business' and had shown only income of Rs. 12,28,420 under the head 'income from other sources'. Under the head 'income from business', the assessee had claimed expenses of Rs. 92,02,720 and set off those expenses as loss under the head income from business and set off the same against the income from other sources. This is how the assessee declared a loss in the return of income filed. 3. There was a dispute between the assessee and the revenue as to whether the assessee can claim revenue expenses under the head income from business because the assessee had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective control of the real estate to a degree usually associated with ownership; b. no significant uncertainty exists regarding the amount of the consideration that will be derived from the veal estate sales', and it is not unreasonable to expect ultimate collection." 4. Aggrieved by the aforesaid order of the CIT(Appeals), the assessee preferred appeal before the Tribunal and the Tribunal in ITA No.1270/Bang/2017 by order dated 11.01.18 remanded the issue for a fresh consideration by the CIT(Appeals). Pursuant to the aforesaid direction of the Tribunal, the CIT(Appeals) has passed the impugned order. Before the CIT(Appeals), the plea of the assessee was that as per AS 2 which is an Accounting Standard prescribed by ICAI for determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting for Fixed Assets." "Exclusions from the Cost of Inventories 13. In determining the cost of inventories in accordance with paragraph 6, it is appropriate to exclude certain costs and recognise them as expenses in the period in which they are incurred. Examples of such costs are: (a) abnormal amounts of wasted materials, labour, or other production costs; (b) storage costs, unless those costs are necessary in the production process prior to a further production stage; (c) administrative overheads that do not contribute to bringing the inventories to their present location and condition; and (d) selling and distribution costs." 5. The CITA dealt with the aforesaid arguments by holding that (a) AS- 2 is not applicable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Counsel for the assessee and I find that the advertisement & business promotion expenses of Rs. 15,65,000 was a payment made by the assessee to Ogilvy Mather P. Ltd. ["Ogilvy" for short]. The agreement between assessee and Ogilvy is at pages 88 to 90 of PB. Perusal of the same shows that the assessee has engaged the services of Ogilvy for the purpose of corporate brand identity exercise, logo design and collateral design. In my opinion, this would be in the nature of general expenses not attributable to any project and payment to the extent it relates to the aforesaid expenses cannot be capitalised and had to be allowed as revenue expenditure. There is also another agreement for advertising with Ogilvy dated 5.9.2011. This agreement is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Government may notify in the Official Gazette from time to time Accounting standards to be followed by any class of assessees or in respect of any class of income. (3) Where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) or Accounting Standards as notified under sub-section (2) have not been regularly followed by the Assessee, the Assessing Officer may make an assessment in the manner provided in section 144. 10. Vide Notification No. 9949, dated 25-1-1996 [(1996) 130 CTR (St) 33], Accounting Standard I relating to disclosure of accounting policies and Accounting Standard II relating to disclosure of prior period ..... X X X X Extracts X X X X X X X X Extracts X X X X
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