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TMI Blog2017 (6) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT (Appeals) was correct on facts and circumstances of the case and in law in deleting the disallowance of Rs.1,79,77,181/- made by the Assessing Officer on account of brand promotion expenses." 2. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 3. Ground No. 1 : The Assessing Officer made disallowance of Rs.2 lakhs out of expenses debited during the year on estimate basis on the ground that some of the expenses claimed are disproportionate and also that some of the expenses are not vouched and verifiable. The ld. CIT (Appeals) has deleted the same. This action of the ld. CIT (Appeals) has been questioned before us. 3.1 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard as just and reasonable. It is an established proposition of law that even discretion is to be exercised judiciously. While examining the action of the Assessing Officer in making the ad-hoc disallowance in question, the ld. CIT (Appeals) has noted that books of accounts were duly audited and no specific defects were found therein by the Assessing Officer nor was any allegation that expenses had been incurred for non-business purposes. He has further noted that the assessee has shown better trading result during the year in comparison to last three years and there was increasing trend. The first appellate order is thus reasoned one and does not need any interference by the Tribunal. The same is upheld. Ground No. 1 is accordingly reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates, during the year the assessee who has to increase the sale of its products had introduced some new brands and also entered and increase focus on new States. As per the Excise Policy of States various registrations / license fees are required to be paid in every State for manufacture and sale of liquor products which are annual fees and are paid year to year on their renewal. During the year the assessee company as an accounting policy matter, instead of debiting the said expenses under the respective heads of expenditure, capitalized part of the same, under the head "intangible assets / brand development". No new brand was purchased. The brand development expenses were incurred in the course of existing business of manufacturing and sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes. iv) In the course of its existing business of manufacture and sale of liquor products, in addition to the existing brands in existing States, during the year, the appellant introduced some new brands and also entered and increased focus on new states so as to increase the sale of its products. v) Because of accounting policy, the routine business expenses of the nature mentioned above in relation to marketing of its new brands / products and in new States, instead of debiting under the respective heads of expenditure, were capitalized under the head intangible assets / brand development. 4.4 On the basis of above material facts, the ld. CIT (Appeals) has come to the conclusion that the expenses claimed as Revenue expenses in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT Vs. Usha Iron & Ferro Metal Corporation Ltd. (supra) the Hon'ble jurisdictional High Court of Delhi has been pleased to hold that the expenditure incurred by the assessee towards improving its business was for the expansion of its existing business. Merely because the assessee treated the amount as a capital expenditure in its books, it would not be bound by as there is no estoppels against the law and just assessment is the object of the Legislature under the provisions of the I. T. Act. The first appellate order on the issue is comprehensive and reasoned one to which we fully concur with. The same is upheld. Ground No. 2 is accordingly rejected. 5. In result, appeal is dismissed. 6. The order is pronounced in the Open Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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