2008 (10) TMI 709 - HC - Income Tax

Revenue expenditure on advertising deemed allowable under Income-tax Act

Commissioner of Income-tax Versus Salora International

The High Court dismissed the revenue's appeal regarding the treatment of advertising/publicity expenditure as revenue or capital in nature for the ... - Issues involved: Appeal u/s 260A of the Income-tax Act, 1961 regarding the treatment of advertising/publicity expenditure as revenue or capital in nature for the assessment year 2000-01.Summary:1. The appeal was filed by the revenue against the order of the Income-tax Appellate Tribunal regarding the treatment of expenditure on advertising/publicity for the assessment year 2000-01.2. The Assessing Officer disallowed 1/3rd of the expenditure, considering it to be of capital nature. However, the Commissioner of Income-tax (Appeals) allowed the entire expenditure under section 37(1) of the Income-tax Act, stating it was revenue in nature.3. The Income-tax Appellate Tribunal upheld the decision of the Commissioner of Income-tax (Appeals), stating that the expenditure was of a revenue nature and allowable u/s 37(1) of the Income-tax Act.4. A similar issue had arisen for the assessment year 2001-02, where the revenue filed an appeal. However, the High Court had earlier held that no substantial question of law arose in that case.5. Since the issue in the present appeal did not raise any substantial question of law, the High Court dismissed the appeal.In conclusion, the High Court dismissed the appeal filed by the revenue regarding the treatment of advertising/publicity expenditure as revenue or capital in nature for the assessment year 2000-01, as it did not raise any substantial question of law.