TaxTMI 
TaxTMI 
2012 (10) TMI 125
X X X X Extracts X X X X
X X X X Extracts X X X X
....xamining the details of expenses relating to the head "miscellaneous expenses" for sums aggregating to Rs..2.94 crores, the A.O. took a view that out of the said sum, a sum of Rs..17,98,482/- on account of repairs and maintenance is capital expenditure and disallowed the same. Besides this, disallowance of section 40(a)(ia) was also made. Thus as against the return of income of Rs..1,09,07,937/-, the assessment was completed at an income of Rs..1,34,10,580/- u/s.143(3) vide order dated 24.12.2008. The said order have been sought to be cancelled by the Ld. CIT u/s.263. Against this assessee has come in appeal before us. 3. The Ld. CIT had issued a show cause notice u/s.263 dated 24.02.2011 on the ground that the expenses of Rs..2.94 crore....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rusal of records, it is seen that in response to notice u/s.142(1) of the Act, the assessee vide letter dated 16.12.2008 furnished inter-alia details of amortised expenses. Vide further submission dated 16.12.2008, the assessee furnished the nature, purpose and justification of the brand building expenditure. The assessment order was passed on 24.12.2008 without any reference to or discussion regarding the brand building expenditure. The Hon'ble Supreme Court in the case of Rampyari Devi Saraogi Vs. CIT 67 ITR 84 and Tara Devi Aggarwal Vs. CIT 88 ITR 323 held that the assessment made by the A.O. would be erroneous merely on the ground of not making enquires which were required to be made in the facts and circumstances of the case and the A.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cifically asked for the details of 'brand building expenditure' for sum aggregating to Rs..2,94,52,315/-, vide letter dated 08.08.2008 and in response to which the assessee has given the entire details on 25.08.2008. The copies of query letter and details as were furnished have been referred to from the paper book. Further the A.O. vide letter dated 24.11.2008 asked particularly about these details of Brand Building expenditure and show cause as to why it should not be capitalized. The assessee in response made submission vide letter dated 02.12.2008 and had submitted the entire details of expenditure before the A.O. All these details have also been placed before us. On this basis he submitted that once the A.O. has examined the entire expe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to by the A.O. He, therefore, strongly relied upon the order of the Ld. CIT. 7. We have carefully considered the rival submissions and also perused the material placed on record. From the assessment records as pointed out by the learned AR, it is seen that the A.O. has not only raised the query regarding the details of brand building expenses, but has also sought clarification on two occasions and had examined them also. Further on examination of these details he has reached to a conclusion that sum of Rs..17,98,482/- is a capital expenditure. It is further noticed that the assessee has deferred these expenses and claimed it as revenue expenditure in equal amount in the A.Y's 2006-07, 2007-08 and 2008-09. Thus there was a complete....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Supreme Court in the case of Empire Jute Co. Ltd. Vs. Commissioner of Income Tax, reported in [1980] ITR Vol. 124. Page 1, has held that no tests for distinguishing between capital and revenue expenditure is paramount or conclusive. There is no all embracing formula which can provide a ready solution to the problem, whether it is a capital expenditure or revenue expenditure. Their Lordships have held that even tests of enduring benefit at times gets failed as not each and every advantage of enduring nature can be of capital field. The most celebrated observations of their Lordships on this account are reproduced herein below :- "There may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, non....