2011 (5) TMI 511

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....he assessee had spent an exceptionally high amount which was basically to build up the "Casio" brand in India. Since in the preceding year, the amount of Rs. 2.70 crores was allowed to the assessee, in the present year also the Assessing Officer allowed the same and disallowed the balance amount of Rs.1,48,04,467 to be allowed in the subsequent three years as deferred revenue expenditure holding that the same had brought enduring advantage to the assessee in view of the judgment of the Supreme Court in Madras Industrial Investment Corpn. Ltd. v. CIT [1997] 225 ITR 802 (SC).   2. The Commissioner of Income-tax (Appeals) allowed the entire expenditure to the assessee holding that the Assessing Officer had not doubted the veracity of the....

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....and sales promotion is held by this court to be revenue in nature by answering this question in a batch of appeals with the lead case being I. T. A. No. 1820 of 2010 entitled CIT v. Citi Financial Consumer Fin. Ltd. [2011] 335 ITR 29 (Delhi) (decided on March 30, 2011). It was held that the expenditure on advertisement and sales promotion is to be treated as business expenditure allowable under section 37 of the Act. The position, in the case was summed up as under (page 39) :   "We thus are of the opinion that the aforesaid question of law as formulated by the Revenue has to be answered in favour of the assessee.   Re : Expenditure on account of stamping fee, direct selling expenditure and commission payment   As per the ....

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....g as well as commission paid to the agents is debited in whole in the year in which it is incurred and could not be treated as advertisement expense.   The Commissioner of Income-tax (Appeals) was unimpressed with this argument and found that the assessee was spreading over the income during the number of years that the financing is spread over and, therefore, expenditure on the aforesaid counts was required to be spread over. The Income-tax Appellate Tribunal, however, denounced this reasoning of the Commissioner of Income-tax (Appeals) and accepted the plea that the expenditure incurred had nothing to do with the period of length of time and had no linkage, whatsoever, to any period, the entire expenditure was allowable in the year ....