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TMI Blog2017 (5) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. The license fee and the royalty fee to the Government of India is on a year to year basis and this fact was never disputed by the Revenue at any point of time and thus the same has to be held as revenue in nature - Decided in favour of assessee. Addition on capitalization of brand development expenditure - Held that:- Similar facts was a subject matter of the departmental appeal for the preceding year i.e. assessment year 2009-10 [2015 (9) TMI 898 - ITAT DELHI] wherein held it is not possible to agree with the appellant-Revenue that the advertisement expenses incurred b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the very outset stated that it is covered vide order dated 08.09.2015 in ITA No. 3685/Del/2013 for the assessment year 2007-08 in assessee s own case by the same bench of the ITAT (copy of the said order was furnished which is placed on record). 5. The ld. DR although supported the assessment order passed by the AO but could not controvert the aforesaid contention of the ld. Counsel for the assessee. 6. We have considered the submissions of both the parties and gone through the material on record, it is noticed that an identical issue having similar facts was involved in the assessment year 2007-08 which has been decided against the revenue by this bench of the Tribunal in ITA No. 3685/Del/2013 vide order dated 08.09.2015 in asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above, we do not see merit in this ground of the departmental appeal. 7. Next issue vide Ground No. 2 relates to the deletion of addition of ₹ 1,39,720/- made by the AO on capitalization of brand development expenditure. 8. As regards to this issue, the ld. Counsel for the assessee submitted that an identical issue was involved in ITA No. 3689/Del/2013 for the assessment year 2009-10 in assessee s own case wherein the issue has been decided against the department by this bench of the Tribunal vide order dated 08.09.2015. 9. The ld. DR in his rival submissions although supported the order of the AO but could not controvert the aforesaid contention of the ld. Counsel for the assessee. 10. After considering the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as incurred on a special advertisement campaign. However, that by itself would not be sufficient to determine as to whether the expenditure in question is on revenue account or capital account. The approach of the Commissioner (Appeals) that the expenditure in question was treated as deferred revenue expenditure and hence was capital in nature, cannot be termed to be a correct approach because in so far as the Income-tax Act is concerned, there is no such category of deferred revenue expenditure. Similarly, making of an entry or absence of an entry does not determine the allowability or otherwise of the item of expenditure and the same cannot be considered to be a factor adverse, if the expenditure is otherwise of allowable nature. Every ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riate to the context. The idea of once for all payment and enduring benefit are not to be treated as something akin to statutory conditions. 16. Applying the aforesaid settled legal position to the facts of the case, it is not possible to agree with the appellant-Revenue that the advertisement expenses incurred by the respondent-assessee at the time of installation of additional machinery in the existing line of business resulted in any enduring benefit, so as to be treated as capital in nature. 17. Question No. 1 is, therefore, answered in the affirmative, namely, advertisement expenses incurred by the assessee to create brand image is allowable as revenue expenditure. So, respectfully following the aforesaid referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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