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of <h1>ITAT Delhi affirms CIT (A) decision on tin plate expenditure as revenue expense</h1> <h3>Assistant Commissioner of Income Tax, Versus M/s. Ralson (India) Ltd.,</h3> Assistant Commissioner of Income Tax, Versus M/s. Ralson (India) Ltd., - TMI Issues:Appeal against addition of expenditure for tin plates used in advertisement and publicity. Cross objection against the sustenance of reassessment proceedings.Analysis:1. The appeal by the revenue challenged the deletion of an addition of Rs.35,45,581 made by the Assessing Officer, related to the expenditure on tin plates for advertisement. The CIT (A) upheld the reassessment but granted relief to the assessee, considering the nature of the expenditure. The appellant argued that the tin plates were part of the total expenditure under advertisement and publicity, not a capital asset. The CIT (A) agreed, citing the tin plates' temporary nature and past practice of allowing similar expenditure.2. The revenue's appeal contended that the tin plates were used for advertisement and publicity of the products sold by the assessee through a network of dealers across India. The ITAT examined the facts and determined that the tin plates were not of enduring nature, following a precedent regarding neon signboards. The ITAT concluded that the expenditure on tin plates for advertisement was revenue expenditure, consistent with past practice of treating similar expenses as revenue.3. Regarding the cross objection of the assessee against the sustenance of the reassessment proceedings, the ITAT reviewed the original assessment order and the reply filed by the assessee. It found that the Assessing Officer had not applied his mind to the tin plates expenditure during the initial assessment, as there was no discussion or mention of it in the assessment order. The ITAT upheld the reopening of the assessment proceedings, dismissing the cross objection.4. In the final decision, the ITAT dismissed the appeal by the revenue and the cross objection of the assessee, affirming the relief granted by the CIT (A) regarding the expenditure on tin plates for advertisement and upholding the reassessment proceedings due to the lack of application of mind by the Assessing Officer.This detailed analysis covers the issues raised in the appeal and cross objection, providing a comprehensive overview of the judgment delivered by the ITAT, Delhi.
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