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TMI Blog2015 (6) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... n adopt the two ways of giving different accounting treatment to an expenditure in its books and claim the entire sum as revenue expenditure in the relevant assessment year. Therefore, we uphold the CIT(A)’s order deleting the impugned disallowance/addition of deferred revenue expenditure. The Revenue’s ground fails. - Decided in favour of assessee. - ITA No.1311/Ahd/2011, CO No.137/Ahd/2011 - - - Dated:- 24-4-2015 - Shri G. D. Agarwal And Shri S.S. Godara JJ. For the Appellant : Shri Dinesh Singh, Sr.D.R. For the Respondent : Shri Vijay Ranjan, A.R. Per: S. S. Godara, JUDICIAL MEMBER This Revenue s appeal and assessee s cross objections for A.Y.2004-05, arise from order of CIT(A)-VI, Ahmedabad dated 04.03.2011 in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treating it as revenue expenditure and availing the entire deduction in the impugned assessment year as irregular. This made him to reopen the assessment. Section 148 notice stood issued on 27.03.2009. 5. The assessee responded by filing a fresh return admitting the aforesaid loss determine at ₹ 1,62,88,490/- (supra). It objected to validity of the reopening and reiterated its deduction claim. The assessing officer finalized re-assessment on 30.12.2009. He observed that the impugned expenditure was of an enduring nature allowable for a period of time instead of the entire claim being entertained in the impugned assessment year since it would cause declaration of incorrect profits. He relied on assessee s action in writing off the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot find any basis for disallowing these expenses just because appellant has not claimed the total expenses in the books of accounts treating the same as deferred revenue expense. Considering this, the disallowance made by the assessing officer is deleted. In this backdrop of facts, the Revenue has filed the instant appeal and assessee has opted for cross objections. This cross objection is not pressed in the course of hearing. This leaves us with Revenue s substantive ground praying for restoration of the impugned disallowance/additions of deferred revenue expenditure. 4. We have heard both sides and perused the case file. There is no dispute about the factual position narrated in the preceding paragraphs. The assessee s books have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, one tenth of such start up expenditure has been charged to profit and loss account and the balancing amount has been deferred for coming 9 years. Due to such policy adoption the book results for the year under review are lower by ₹ 21,56,567/-. However the company proposes to claim the entire amount as expenditure while filing the income tax returns for the year. The Revenue does not to dispute these facts. Its only plea is that since enduring benefits are resulted on account of brand building and store setup expenditure involving gross sum of ₹ 1,70,17,652/-, the entire sum ought not to have been allowed as revenue expenditure only in the impugned assessment year. More particularly; when the notes extracted hereinabove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure over a period of five years as in the return fifed by it, it had claimed the entire interest paid upfront as deductible expenditure in the same year. In such a situation, when this course of action was permissible in law to the assessee as it was in consonance with the provisions of the Act which permit the assessee to claim the expenditure in the year in which it was incurred, merely because a different treatment was given in the books of accounts cannot be a factor which would deprive the assessee from claiming the entire expenditure as a deduction. It has been held repeatedly by this Court that entries in the books of accounts are not determinative or conclusive and the matter is to be examined on the touchstone of provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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