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TMI Blog2014 (4) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... n which the same is incurred - there is no advantage which has accrued to the assessee in the capital field - The expenditure was incurred to facilitate the assessee’s trading operations - No fixed capital was created by this expenditure - in the income-tax law, there is no concept of deferred revenue expenditure. Once the assessee claims the deduction for the whole amount of such expenditure, even in the year in which it is incurred, and the expenditure fulfils the test laid down u/s 37 of the Act, it has to be allowed - The AO erred in holding that the advertisement expenses as deferred revenue expenses is not valid in the eyes of law and therefore the CIT(A) has rightly set aside the same – thus, there is no infirmity in the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t expenditure to be capital in nature. Consequently, the Assessing Officer allowed only 20% of the said expenses, in the relevant Assessment Year while the balance 80% of the expenditure was allowed to be claimed in subsequent years in 4 equal installments. 5. Aggrieved by the said order of the Assessing Officer, the assessee preferred an appeal before the ld CIT(A), who was pleased to allow the said appeal. Aggrieved by the said order of the ld CIT(A) the revenue is before us. 6. The ld DR contended that the advertisement expenses incurred was for brand building of the assessee in Computer retail sector and therefore the Assessing Officer rightly held that the said expenses be allowed over a period of five years and therefore the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not accept the said claim and held it to be a capital expenditure and allowed 20% disallowance and the rest of the disallowance in subsequent year in four equal installments. Against the said order the assessee preferred an appeal which was allowed by the ld CIT(A). Now let us look at the case law decided by the jurisdictional High Court. 8. A similar case was decided by Hon ble Delhi High Court in CIT Vs. Citi Financial Consumer Fin. Ltd. (Delhi)(2011) 335 ITR 29, the Hon ble jurisdictional High Court held that expenditure on publicity and advertisement is to be treated as revenue in nature allowable fully in the year it was incurred. The facts of the said case was that in the assessment year 2001-02, the assessee-company claimed an exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspects clearly emerge as undisputable: (a) The Expenditure in question is incurred by the assessee in the relevant assessment years in which the assessee is claiming deduction thereof u/s 37 of the Act. Thus there is no dispute that the expenditure is in fact incurred. (b) It is also not in dispute that the expenditure in question is business expenditure incurred wholly for the purpose of the business of the assessee. (c) The expenditure incurred in the nature of advertisement and publicity is incurred forever and in no manner any portion thereof reverts back to the assessee. 10. The aforesaid facts would demonstrate that the ingredients of section 37 of the Act stand satisfied. Therefore, normally the expenditure is to be all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In CIT Vs. Casio Industrial Ltd (Delhi) 335 ITR 196 (Delhi) wherein the assessee s claim for advertisement and sale promotion by distribution of musical instruments and digital diaries for brand promotion was allowed as revenue expenditure by the Hon ble jurisdictional High Court. 10. In the instant case, we find that the company was only engaged in retail trading and had no products manufactured or sold under its own brand. Therefore we find that the Assessing Officer erred in observing that the advertisement was for brand building in computer retail sector and even if so, then also as held by Hon ble jurisdictional High Court in Casio India Ltd (Supra) has upheld the expenses incurred by Casio for promotion of its brand. We find that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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