TMI Blog2014 (1) TMI 1881X X X X Extracts X X X X X X X X Extracts X X X X ..... URT] is binding. The above judgment, as noted, has held that the expenditure incurred by the assessee, on production of film by way of advertisement for promoting and marketing of products manufactured by it in respect of ongoing business is allowable as revenue expenditure. - Decided against revenue Disallowance towards input Service Tax - as per CIT-A expenditure has been claimed only once and that in the year it has incurred. The addition made by the Assessing Officer is, therefore, deleted - HELD THAT:- CIT(A) appreciated the factual aspect and gave a finding on facts, which in our opinion does not deserve to be disturbed. We, therefore, sustain the view of the CIT(A), thereby, rejecting the ground of appeal, as raised by the department. - ITA No. 7907/Mum/2011 - - - Dated:- 15-1-2014 - SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER For the Appellant : Shri Ashok Suai For the Respondent : Shri Satish R Mody Shri Rahul Bagaria ORDER PER VIVEK VARMA, JM: The instant appeal is filed by the department against the order of CIT(A) 20, Mumbai, dated 16.09.2011, wherein, the following grounds have been taken: 1. On t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been allowed in earlier assessments also. 3 2 3 It also drew attention to the copy of the depreciation schedule as per the Audited Accounts: as well as the depreciation schedule prepared as per Tax Audit Report to drive home the point that although a sum of 22,52,684/- has been amortized by the appellant company by way of debit to the Profit Loss Account but the same was added back to the computation of income and claimed in entirety. u/s 37(1). of the I.T. Act, 1961. The appellant also relied on the recent decision of Hon ble Bombay High Court in the case of CIT vs Geoffrey Manners Co. Ltd reported in 315 ITR 134. 3.3. I have perused the assessment order and written submissions of the appellant The appellant is in the business of sky teleshopping and so it is natural that it will develop programmes for Television to market its products The expenses incurred are, therefore, clearly for development of marketing products Simply because the appellant has treated the same as deferred revenue expenditure in its a unt will not ipso facto lead to the conclusion that it is capital in nature. The preparation of account as per Companies Act envisages the concept of deferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The expenses as incurred, therefore, are clearly for the development of marketing products, to be sold through television programmes. 10. The preparation of account as per Companies Act envisages the concept of deferred revenue expenditure but as per IncomeTax Act, expenditure is either in revenue field or in the capital field. 11. The fact, that the assessee offered back the amount amortized in the computation of income in order to claim a total deduction u/s 37(1) of the I T Act 1961 is acceptable as the expenditure is, in respect of an ongoing business and so the decision of Jurisdictional High Court in the case of CIT vs Geoffrey Manner Company Ltd (supra) is binding. The above judgment, as noted, has held that the expenditure incurred by the assessee, on production of film by way of advertisement for promoting and marketing of products manufactured by it in respect of ongoing business is allowable as revenue expenditure. 12. On perusal of the order of the revenue authorities, we have observed, that the department has not proposed to such a disallowance in earlier years. Bearing in mind the consistency of approach on identical facts, we are of the considered opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company during the relevant year only and therefore, is required to be claimed as an expenditure in the same year only Accordingly such expenditure although by mistake not debited to the P L Account has been validly claimed in the return of income for the year. IV It was also submitted that even as per the provisions of section 145A of the act the cost of goods for the purposes of determining the income chargeable under the head profits gains of business or profession shall be adjusted to include any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. The same theory therefore) applies to even the Valuation of the services utilized by the assessee for computing the chargeable income under the head profit and gains of business profession . Therefore, such claim of input service tax being of revenue nature has been rightly claimed y assessee company as deductible expenditure as part of the valuation of the services utilized by the assessee company during the year under the provisions of section 37 r.w.s. 145 of the Act. V It was further ..... X X X X Extracts X X X X X X X X Extracts X X X X
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