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TMI Blog2012 (6) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... aw in directing the AO to treat the expenditure of Rs.8,18,06,964/- as deferred revenue expenditure and allow 1/5th thereof in this year and balance in four equal amounts in the succeeding four years, as against the finding of the AO that the expenditure is not deductible in computing the loss. It is mentioned that the advertisement on TV channels for promoting 'Bacardi' brand was accessible outside India where assessee's products are not sold. It is further mentioned that the ultimate beneficiary of the expenditure is Bacardi International Ltd., Bermuda ('BIL' for short) and not the assessee. It is also mentioned that the expenses are not incurred wholly and exclusively for the purpose of business of the assessee. The appeal is not filed within the prescribed time. However, we shall revert to this issue later on. At present, it will be sufficient to say that application for condonation of delay and an affidavit from the Commissioner of Income tax have been filed on 21.09.2011, on the date of hearing. The assessee has opposed the condonation of delay. 2. The brief facts are that the assessee filed original return declaring loss of Rs.5,63,60,530/- on 25.11.2003. This return was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same should be expended or laid down wholly and exclusively for the purpose of the business. As far as first two limbs are concerned there is no dispute that expenses in the instant case was not of the nature covered u/s 30 to 36, nor they are capital or personal expenses and, therefore, the only question remains is as to whether such expenses are incurred for the purpose of the business. As has been looked into earlier that appellant company has been the sole manufacturer, distributor and seller of Bacardi products in India, and therefore any promotional activities carried out in India would result in direct benefit to the appellant company and therefore expenses in nature of AandP incurred by the appellant company would by all means benefit the same and therefore it would be inapt to consider that benefit of such promotion would accrue only to the BIL and not to the appellant company. and merely because benefit accrues to BIL does not render such expenses as not for the purpose of business. Thus, looking to the facts of the case as well as relying on various judgments referred to, I am in agreement with the appellant company that no disallowance should have been made. It is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promoting "Bacardi" brand which is not owned by the assessee but by the BIL. The advertisement on TV channels is also accessible to persons outside India who are not the customers of the assessee. However, it is also a fact that the promotion of Bacardi brand makes it known in India and to the customers of the assessee in India. This leads to increased sale of the alcoholic beverages manufactured and sold by the assessee. Therefore, the expenditure has been incurred for the purpose of the business of the assessee. Any incidental benefit does not displace the aforesaid conclusion, as made out by the ld. CIT(Appeals) in the impugned order. The assessee could have claimed the whole of the expenditure as revenue expenditure in this year as advertisement expenses are in the nature of revenue expenditure. However, it has claimed only 1/5th of the expenditure in this year and the balance expenditure has been claimed and allowed in assessment years 2004-05 to 2007-08. In the interest of consistency, it will be appropriate to hold that the assessee is entitled to the deduction of 1/5th of the expenditure in this year. Accordingly, the ground taken by the revenue is dismissed. 3. Coming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal and with the application for condonation of delay, which shall be considered as per law." This does not amount any permission by the Tribunal that if complete appeal along with the application for condonation of delay is filed, it shall be admitted. The appeal, if filed, had to be dealt with as per law. The revenue has now filed the second appeal bearing ITA no. 2933(Del)/2010. This appeal constitutes a separate and independent appeal because the issue agitated is in respect of the amount of about Rs.8.18 crore. This appeal is also late even if a reasonable time is allowed to the revenue to file fresh appeal after the dismissal of miscellaneous application. Thus, the revenue has not acted with due diligence even in filing the instant appeal. In such a situation, the appeal is required to be dismissed in limine, in view of the decision of "B" Bench of Delhi Tribunal in the case of Additional CIT vs. M/s Sumitomo Corporation for assessment year 1997-98 in ITA No. 930(Del)/2008 dated 30.06.2010, a copy of which has been placed on record. Paragraph no. 11 of the decision is reproduced below for ready reference:- "11. Keeping in mind the above authoritative pronouncement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a mistake of annexing the approval and grounds of appeal which were approved by the Learned CIT(Appeals) on 12.4.2001 in an appeal which was already received by the ITAT on 15.3.2001. It indicates that the story put forth by the revenue and canvassed by the Learned DR before us has no legs to stand. Apart from this when this defect was pointed out to the revenue and it filed the fresh grounds of appeal on 15th October, 2007. It filed a fresh authorization granted on 9.10.2007. Had there was already an authorization how those very grounds were required to be authorized afresh. There were no grounds of appeal emanating from the impugned order. Thus, in the eyes of law, it was not valid appeal. It is not the case where appellant sought to raise additional ground of appeal or some other connected issues which was already taken up in the original memo of appeal. We have extracted the application for condonation of delay in the upper part of the order, not a single reason is discernible from that application. The revenue has narrated the facts but nowhere shown how it failed to file the grounds of appeal emanating from the impugned order of the Learned CIT(Appeals). We agree to the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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