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TMI Blog2014 (1) TMI 1636X X X X Extracts X X X X X X X X Extracts X X X X ..... d the deferred revenue expenditure by way of amortization @ 10% for a period of 10 years. Further the assessee never represented that the deferred revenue expenses were of the nature of pre-operative expenses and, accordingly, never claimed them u/s 35D. - No reason to interfere with order of CIT(A) - Decided against Revenue. - ITA No. 1171/Del/2012, ITA No. 829/Del/2013 - - - Dated:- 31-1-2014 - SHRI S.V. MEHROTRA AND SHRI RAJPAL YADAV, JJ. For The Appellant : Sh. Sriniwas Kumar, Sr. DR For The Respondent : None ORDER PER S.V. MEHROTRA, A.M. These appeals filed by the Revenue are directed against the two separate orders of ld. CIT(A)-VI, New Delhi, dated 01/12/2011 for A.Y. 2007- 08 and ld. CIT(A)-VI, New Delhi, da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome that assessee had claimed deferred revenue expenditure of ₹ 1,98,68,372/- under the head miscellaneous expenditure . In reply to the show cause notice, the assessee submitted as under: The assesse has very insignificant presence in north India where wheel type harvestor combine are mainly in demand. In order to capture a bigger portion of the north Indian market, the assessee started developing another model of wheel type harvestor combines namely TAF (Tangential Axial Flow) 60 (commercial name-Crop Tiger 60). This was an improvised version of the existing wheel type harvestor combines machines which the assessee was selling. TAF 60 (Crop Tiger 60) is a larger yet compact machine, equipped with a 15 feet wide cutter b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the expense incurred till March 2003 amounting to ₹ 49.24 lacs was fully written off in the books during the FY 2003-04 relevant to AY 2004-05. The total expenditure incurred after 01.04.03 during the FY 2003-04, FY 04-05 FY 06-07 has been treated as a deferred revenue expenditure and have been written off in equal proportions, starting from the year in which the expenditure is incurred and upto 01.05.07, which was the expected launch date for the product. A table showing the accounting treatment of the expenditure beginning with FY 03-04 upto FY 06-07 is enclosed as Annexure 7. Expense claimed in the tax computation - In the computation of total income under the income tax, it was considered prudent that the expenditure i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithstanding the manner of accountal in the books of reckoning the uniform nature of expenditure incurred, the co. considered it prudent to claim expenditure for tax purposes, in a consistent manner spreading it over the period till the commercial launch of the product. This treatment is in line with the decision of the Hon ble Supreme Court in the case of Madras Industrial Inv. Corpn. Ltd. [225 ITR 802] - copy enclosed as Annexure 8. I may please be noted that while working out the taxable income the assessee has added back the deferred revenue expenditure charged in the P/L Account and claimed the expense as per working provided in annexure 7A. The Hon ble Delhi High Court in the case of Jay Engg. Works Ltd. vs. CIT [212 CTR 562] hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period by which the product was expected to be commercially launched. The expenditure was incurred between FY 03-04 upto FY 06-07 and the assessee had adopted a consistent method for claiming the expenditure. Ld. CIT(A) has rightly observed that assessee had not claimed the deferred revenue expenditure by way of amortization @ 10% for a period of 10 years. Further the assessee never represented that the deferred revenue expenses were of the nature of pre-operative expenses and, accordingly, never claimed them u/s 35D. We, therefore, do not find any reason to interfere with the order of ld. CIT(A). 7. In the result, this ground is dismissed. 8. Brief facts apropos ground no. 2 are that assessee had claimed depreciation @ 60% in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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