TaxTMI 
TaxTMI 
2013 (1) TMI 719
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....bsp; "on the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in differentiating artwork charges for short duration use and long duration use and disallowing artwork charges claimed as revenue expenditure. The Commissioner of Income-tax (Appeals) erred in upholding action of the Assessing Officer partly by treating artwork charges included in advertisement expenses, as capital expenditure, in spite of the fact, given the average lifespan of such artwork, no asset of enduring nature is acquired and accordingly it cannot be held as incurred in the capital field. The appellant submits that there is no....
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....d to the Assessing Officer that the artwork is designed for the print media like paper advertisements, pamphlets and handbills. Thus, the assessee submitted, the artwork is just like a stencil paper or a negative of a photograph and the artwork is then used for taking copies of the artwork for use in paper advertisement, pamphlets and handbills, etc. Thus, after the "artworks" once used, normally they are thrown away after their use as the same is no longer reused by the same customer. Of course, some customers repeat the orders and in any case the life of such "artworks" is less than six months. 4. Regarding the technology involved in transmitting artwork into final advertisement, the assessee submitted to the Assessing Officer that off....
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....articular period of the year and hence the said artwork will have no use once the sale promotion period is over. The assessee replied to the Assessing Officer that the artwork containing the advertisement material will have to be revised based on the marketing strategy adopted by competitors. The assessee fu ther replied to the Assessing Officer that the artwork is in the form of card paper and hence has got a very limited use of only a few occasions and cannot give advantage of an enduring nature. The assessee further submitted to the Assessing Officer that although a bromide or an artwork can be prepared whereby the life is better than that of card paper artwork, but the said bromide also has no use because the art work meant for diwali o....
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....09 is confirmed and granted depreciation on the confirmed portion of the addition. 8. Before us, learned counsel read out the relevant facts and the submissions of the assessee and the reasoning given by the Assessing Officer for making addition and finally the logic basing on which the Commissioner of Income-tax (Appeals) granted substantial relief and confirming the amount of Rs. 1,52,809, which is the subject-matter of litigation now. In this regard, learned counsel mentioned that the criteria adopted by the Commissioner of Income-tax (Appeals), i.e., "certain artworks for special occasions which can be used only once or for a short period" is completely artificial in nature. The Commissioner of Income-tax (Appeals) ignored the fact t....