TMI Blog2020 (4) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... essity of the business and thus, an integral part of the business activity. Therefore, the expenses incurred on advertisement etc. are not for acquisition of an asset or right of a permanent character, therefore, cannot be said to be a capital expenditure. It is but a revenue expenditure. Whether the expenses on account of advertisement, publicity and sales promotion in relation to the business are in the nature of deferred revenue expenditure and although the benefit of such expenses would be availed by the assessee over a number of years but should it be allowed for the relevant assessment year for which assessee claims exemption, also came up for consideration before a Division Bench of Punjab and Haryana High Court in Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case the Income Tax Appellate Tribunal was justified in law in deleting the addition of ₹ 5,32,75,978/- made by the Assessing Officer on account of deferred Revenue expenditure? 4. The facts leading to the present appeal are that the assessee is in the status of a Company and engaged in manufacturing and trading of Vanaspati, Refined edible oils, almonds and fruit drinks etc. The assessee submitted its return of income declaring loss of ₹ 34,92,86,201/-. The return was processed under Section 143(1) of the Act and was selected for scrutiny and thereafter, notice under Section 143(2) of the Act was issued to the assessee. The assessee claimed deduction of ₹ 6,65,94,973/- as deferred revenue expenditure o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel for the appellant submitted that the deduction in question was pertaining to the expenses incurred in advertisement, publicity and sales promotion etc. of the business which would be giving continuing benefit to the business of the assessee-Company and therefore, the Assessing Officer did not commit any error in spreading over the expenditure for five years and allowing only 1/5th thereof for the current assessment year but both the authorities below only on the ground that for the assessment years 1993-94 and 1996-97 similar claim was allowed to the assessee and his appeal claiming the same benefit for the assessment year 2000-01 was allowed by the Appellate Authority on 22.01.2004, deleted the addition of ₹ 5,32,75,978/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (supra) was as to whether the discount on debentures could be treated as an expenditure and the entire amount of discount was to be allowed in the year related to the year of issue itself. The Supreme Court held that although while issuing debentures at a discount the assessee has incurred the liability to pay the discount in the year of issue of debentures but by such payment the assessee would secure a benefit over a number of years and there would be a continuing benefit to the business of the company over the entire period and therefore, such liability should be spread over the period of the debentures issued. We have carefully gone through the said decision of the Supreme Court and are of the considered view that the said decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the entire amount was admissible in the year in which it was incurred. The finding recorded is as under:- We have considered the facts of the case and rival submissions. The finding of the AO that even if the claim of the assessee that constant advertisement is needed in view of short public memory is accepted, the benefit accruing to the brand name GLEN cannot be ruled out. There is no evidence in support of this finding. Further, the learned CIT(Appeals) upheld the view of the assessee that the benefit will accrue over a period of two years by relying on the decision of Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd. (supra). Nothing has been brought on record to show that the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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