Market research expenses treated as revenue expenditure where they supported business operations and recurring commercial strategy.

Market research expenses incurred in the normal course of business were held to be revenue expenditure, not capital expenditure, because they were directed to understanding consumer behaviour, improving marketing strategy, and supporting business operations that generated sales and profits. The recurring nature of the outlay, the Revenue's consistent treatment of the same expenditure as revenue in earlier years, and the principle reflected in Glenmark Pharmaceuticals Ltd. supported that characterisation. The Tribunal's factual appreciation and application of the governing legal principles were upheld.

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Issues: Whether market research expenses incurred by the assessee were capital in nature or revenue in nature.

Analysis: The expenses were incurred in the normal course of business to understand consumer behaviour, improve marketing strategy, and support business operations leading to higher sales and profits. The Tribunal also relied on the recurring nature of the expenditure, the Revenue's consistent treatment of the same expenditure as revenue in earlier assessment years, and the view expressed in Glenmark Pharmaceuticals Ltd. The High Court found that the Tribunal had correctly appreciated the facts and applied the governing legal principles.

Conclusion: The market research expenses were revenue expenditure and not capital expenditure.

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