2009 (2) TMI 13

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..... usiness which is yet to commence then the same cannot be treated as revenue expenditure but if the expenditure is in respect of an ongoing business and there is no enduring benefit it can be treated as revenue expenditure - Since expenditure was in respect of promoting ongoing products of the assessee, they are held as by way of revenue expenditure
F.I. REBELLO and R.S.MOHITE, JJ. Mr. Suresh K .....

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..... of the judgment of this Court in Commissioner of Income Tax Vs. Patel International Films Ltd., 102 ITR 219. 2. The Respondent assessee has incurred expenditure on film production by way of advertisement for the marketing of products manufactured by them. It was their submission that these expenses are purely of revenue nature and they derive no enduring benefit to the company. They only will hel .....

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..... isement film was pleased to hold that no capital or right or benefit of enduring nature had been created or acquired by the assessee by production of the advertisement film. The Tribunal noted that the assessee to keep mass interest in its products has to continuously strive to keep on advertising its products in ever increasingly novel ways and methods, through the media and as such the expenditu .....

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..... acquired by the assessee-company was a capital asset to be used for the purpose of advertisement of the business that the assessee-company was going to carry on in future and, therefore, the expenditure will have to be regarded as a capital expenditure and not revenue expenditure." It would, thus be clear that the machinery purchased was not in respect of an on going business of the assessee, but .....

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..... nd if it is in respect of business which is yet to commence then the same cannot be treated as revenue expenditure as expenditure is on a product yet to be marketed. Considering the above, in our opinion the judgment in Patel International Films Ltd. (supra) is clearly distinguishable. The C.I.T. (A) and the Tribunal on the facts of this case were clearly within their jurisdiction in holding that .....

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