Allowability of brand promotion expenses for a trademarked product affirmed after revision challenged; assessing officer's reasonable view sustained.

Revision under revisional jurisdiction challenged the allowability of business expenses labeled as memorial expenses claimed to promote a branded product. The legal basis applied is that expenses which are genuine and reasonable and which strengthen brand value constitute allowable business expenditures; the assessing officer conducted inquiries and adopted a permissible view declining additions. The revisional order faulted the AO for alleged failure to apply mind, but that conclusion was set aside because the AOs conclusion was a tenable view on facts and law. Operative effect: the revision was quashed and the AOs allowance of the expenses sustained.

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Issues: Whether the order passed by the Principal Commissioner of Income Tax under section 263 of the Income-tax Act, 1961 setting aside the assessment dated 07/11/2019 in relation to claim of Bhola Nath Kesarwani Memorial expenses is sustainable.

Analysis: The Tribunal examined the assessment record, the notices under section 142(1) and responses filed by the assessee, and the submissions made before the Principal Commissioner in the revisional proceedings. It found that the Assessing Officer had issued specific queries, received voluminous documentary replies and had considered the material in the assessment proceedings. The Principal Commissioner’s order under section 263 merely recorded a conclusion that the AO had failed to apply his mind without addressing why the assessee’s submissions were inadequate or why the Assessing Officer’s view was unsustainable; the revisional order did not discuss the assessee’s replies or explain why the AO’s conclusions were erroneous. The Tribunal applied the principle that where the assessing officer has taken one of the possible reasonable views after enquiries, a different view taken by the Commissioner under section 263 is not justified; absence of a reasoned basis in the revisional order and failure to show that the AO’s view was unsupportable weighed against upholding the exercise of revisional jurisdiction.

Conclusion: The Tribunal concluded that the order under section 263 is unsustainable and set aside the revisional order, restoring the assessment. The conclusion is in favour of the assessee.

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