https://www.taxtmi.com/caselaws?id=32864 The HC upheld the disallowance of accrued marketing expenditure claimed by the assessee-company, which incentivized franchisees through a scheme reimbursing 2% of sales upon opening additional outlets. The court found the scheme was formulated only in April 2001, after the relevant financial year ended, making the claim for that year unsustainable. Further, the creation of a wholly owned subsidiary to channel advertising contributions did not permit the assessee to claim expenses indirectly that it could not claim directly. The court affirmed that for deduction under Section 37(1), expenses must be revenue in nature and incurred wholly for business purposes with commercial expediency. The Tribunal's finding that the assessee failed to prove such commercial expediency or business purpose was upheld, leading to the disallowance of the claimed marketing expenditure. en-us Wed, 01 Apr 2009 00:00:00 +0530 Wed, 13 Aug 2025 10:30:30 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=32864 The HC upheld the disallowance of accrued marketing expenditure claimed by the assessee-company, which incentivized franchisees through a scheme reimbursing 2% of sales upon opening additional outlets. The court found the scheme was formulated only in April 2001, after the relevant financial year ended, making the claim for that year unsustainable. Further, the creation of a wholly owned subsidiary to channel advertising contributions did not permit the assessee to claim expenses indirectly that it could not claim directly. The court affirmed that for deduction under Section 37(1), expenses must be revenue in nature and incurred wholly for business purposes with commercial expediency. The Tribunal's finding that the assessee failed to prove such commercial expediency or business purpose was upheld, leading to the disallowance of the claimed marketing expenditure. Case-Laws Income Tax Wed, 01 Apr 2009 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=32864