2024 (8) TMI 434 - HC - Income Tax

Advertisement expenditure (deferred revenue) - allowable revenue expenditure or not? - assessee has made different entries in the audited books of accounts and in the return of income and there is no such concept of deferred revenue expenditure as per the I.T. Act - ITAT allowed deduction - HELD THAT - This Court by the judgment and order passed on the Revenue s appeal in Tata Chemicals Ltd. 2024 (7) TMI 94 - BOMBAY HIGH COURT did not entertain the said questions on the ground that on the similar issues the revenue has accepted the previous orders passed in the assessee s own case. Addition of expenses towards workmen and staff welfare u/s 40A (9) - Supreme Court in Excel Industries Ltd. 2013 (10) TMI 324 - SUPREME COURT this Court did not find fault in the findings as rendered by the Tribunal in deciding the issue in regard to allowing of the expenses incurred by the assessee towards workmen and staff welfare u/s 40A (9) of the Act. Thus, the Tribunal on such issue having held in the assessee s favour in the assessess s own case for the Assessment Year 1997-98, we are not persuaded to re-examine such question.

Summary

Issues:
1. Allowance of advertisement expenditure as revenue expenditure for A.Y. 1998-99.
2. Allowance of expenses towards workmen and staff welfare under Section 40A(9) of the Income Tax Act.

Analysis:

Issue 1:
The appeal by the revenue challenged the ITAT's order allowing advertisement expenditure as revenue expenditure for A.Y. 1998-99. The revenue contended that the assessee made different entries in audited books of accounts and in the return of income, and there is no concept of deferred revenue expenditure under the IT Act. The High Court noted that similar questions were raised in a previous appeal for A.Y. 2000-2001, where the revenue had accepted previous orders in the assessee's case. The Court referred to its judgment in the previous appeal, where it upheld the Tribunal's decision in favor of the assessee for A.Y. 1997-98. The Court found no fault in the Tribunal's decision to allow the expenses, relying on principles laid down by the Supreme Court. Consequently, the Court dismissed the appeal, stating that the issue was already settled in the assessee's favor for the previous assessment year.

Issue 2:
The second issue pertained to the allowance of expenses towards workmen and staff welfare under Section 40A(9) of the Income Tax Act. The High Court, in line with its decision on the first issue, noted that the Tribunal had already ruled in favor of the assessee for A.Y. 1997-98 on a similar issue. Citing its previous judgment and applying legal principles, the Court found no reason to re-examine the matter. Consequently, the Court dismissed the appeal, stating that the issue was already decided in the assessee's favor for the previous assessment year. The Court emphasized that the questions of law did not arise for consideration based on its earlier order.

In conclusion, the High Court dismissed the appeal on both issues, as they were already settled in the assessee's favor for the previous assessment year. The Court found no grounds to re-examine the matters, relying on its previous judgments and legal principles. The appeal was hence dismissed, and no costs were awarded.