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TMI Blog1980 (9) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... s and from other sources. The question becomes relevant because inter alia the higher allocation of interest against dividend income reduced the right of the assessee-company to relief under s. 80-M admissible only in respect of dividends. The ITO took the view that investments were made only from borrowed funds. It was in this view that the entire interest was deducted from dividends which is taken as income from other sources. The AAC while dealing with the appeals for the asst. yrs. 1973-74 and 1974-75 found that the inference was not justified from the facts furnished by the assessee. He found that the borrowed funds were used for purposes of acquisition of shares and for purposes of financing the business, which was mainly in distribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate authority. 3. We will now deal with the other grounds for asst. yr. 1974-75. The next ground is regarding the allowance of Rs. 3,39,597. The ITO disallowed the same because it was part of advertisement and sales promotion expenses out of Rs.4,62,088.75 being in the nature of capital expenditure. It is common ground that this amount was incurred in advertising a new product, viz., Ensore Blades. The assessee is a distributor of consumer goods and the blades are one of the items distributed by the assessee-company. Common accounts are maintained, though various products are distributed by it relating to various divisions, like plastic division, camphor division, blades division, etc. There was heavy expenditure because it was initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advertisement expenses incurred by the company". It is also further stated that "due to certain quality complaints, your Directors decided to suspend further purchases". No doubt, the Directors undertook to initiate suitable negotiations with the suppliers and take steps to revive the business. An enduring advantage is an advantage over several years. Here is a case where the advantage did not survive even the year in which the outlay was incurred. The question whether there has been an enduring advantage or not is essentially a question of fact. There has been no enduring advantage. The order of the AAC has, therefore, to be upheld for the reasons, which are not the same as those adduced by him. Even otherwise, we are not in a position to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here has not been any such overflow. It is not even an deferred Revenue expenditure, because the business was not carried over in the next year. The advertisements related to one of the many products dealt in. In this view of the matter, we do not find any merit on this point. 5. The only other point that survives for consideration in the departmental appeal for 1974-75 relates to the entertainment expenditure of Rs. 4,746, the disallowance of which was deleted by the AAC. The AAC found that from the details filed before me I find that the expenses merely represent the coffee and tea and refreshment expenses provided to the dealers". On this finding he was certainly right in deleting the disallowance in view of the decision of the Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X
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