TMI Blog2022 (9) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... AS INDIA MARKETING (P.) LTD. [ 2009 (9) TMI 918 - DELHI HIGH COURT] , BERGER PAINTS (INDIA) LTD. (NO. 2). [ 2002 (2) TMI 97 - CALCUTTA HIGH COURT] assessee cannot be disallowed the expenditure on the ground that it is a brand building exercise and is capital in nature. Accordingly, we set aside the orders of the authorities below and decide the issue in favour of the assessee. - ITA No. 4313/Del/2019, 4314/Del/2019 - - - Dated:- 22-9-2022 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER For the Assessee : Shri Anil Bhalla, CA For thr Revenue : Shri Anjula Jain, CIT(DR) ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER: These are appeals by the assessee against respective orders of Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding part of the assessment order is as follows:- The fact of the case is totally different from the fact of cases relied upon the assessee. In all the above referred cases, efforts have been made to earn income but income could not be realized whereas in this case, the assessee has not started any effort to earn income. It is just in process of making a brand for future utilization of earning income so any expenses thereupon can t be held to be held in the expenses in the nature of revenue. Moreover, when there is no income chargeable u/s 28, no expenses u/s 30 to 37 can be claimed in this regard. In view of the total expenses claimed in the P L a/c of Rs. 21,02,03,236/- is hereby disallowed and capitalized. 4. Upon assessee s ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before AO and in appeal. Ld.AR has not shown any model in which revenue is likely to be generated. In view of these facts, I agree with the finding of the AO that the appellant is in the process of making a brand for future utilization of earning income. Brand name is an intangible asset and the said view finds support from AS-26 i.e. Accounting Standard issued by the Institute of Chartered Accountants of India. AO has rightly disallowed these expenses and treated as expense of the capital nature. Further, reliance is placed on the decision of Hon ble Bombay High Court in the case of ALD Automotive Pvt. Ltd. Vs. DCIT (2018) 254 taxmann 233 also on the decision of Hon ble Calcutta High Court in the case of Video Plaza Vs. ITO, 385 ITR 404. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i High Court decision in the case of Maruti Insurance Broking Pvt. Ltd. Vs. DCIT 127 taxman.com 685. Further, he placed reliance upon ITAT decision in assessee s own case for AY 2012-13 in ITA No.2906/Del/2018 vide order dated 05.07.2022 where while quashing the order passed section 263 ITAT has observed that the view that earning of income is necessary for allowance expenditure is not sustainable. Per contra ld. DR for the Revenue relied upon the orders of authorities below. 6. Upon careful consideration, we note that assessee s expenditure were duly allowed in the earlier assessment year. ITAT in assessee s own case for AY 2012-13 has quashed the order u/s 263 of the Act passed by the ld. Pr.CIT in ITA No.2906/Del/2018 vide order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n setting up and commencement of business could not have been capitalized and was to be allowed as business expenditure. 7. ITAT in assessee s own case while referring to the above decision has observed that when we examine the facts of the present case on the touchstone of the above case laws, the Pr.CIT s inference that AO should make further unspecified enquiries so that assessee should not be allowed expenditure and the depreciation because the assessee has not earned any revenue is not based upon any material whatsoever. We find that the facts in the present case are analogical just because assessee has not earned any income expenditure should be disallowed, is not a correct view. It has also been pointed out by the ld. Counsel of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
