TaxTMI 
TaxTMI 
2015 (6) TMI 900
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.... seeks restoration of the aforesaid disallowance/addition made in the course of re-assessment framed on 30.12.2009. The Assessee's pleadings challenge validity of the reopening taken recourse to by the assessing authority and affirmed in the CIT(A)'s order. 3. The assessee-company runs a super market chain of food and grocery items. It filed its return on 30.10.2004 admitting loss of Rs. 1,63,54,790/-. The Assessing Officer framed a 'regular' assessment computing the aforesaid loss to Rs. 1,62,88,490/-. 4. Thereafter, the assessing authority formed reasons to believe that assessee's taxable income liable to be assessed had escaped assessment. It had availed deduction of Rs. 1,70,17,652/- relating to deferred revenue expenses. This sum rep....
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....ge validity of reopening as well as the impugned disallowance on merits. The CIT(A) has turned down the former plea and accepted the latter one. The lower appellate order on merits reads as under: "3.3 I have considered the facts of the case, assessment order and appellant's submission. Assessing officer treated deferred revenue expenses incurred on advertisement and sales promotion etc as capital in nature. In the books of accounts, appellant claimed part of the expense and the remaining part were claimed in other years. However since there is no concept of deferred revenue expense under income tax act, the said expenses were claimed as revenue by the appellant. Appellant submitted that entries in the books of accounts are not determi....
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....estion as under: "a) As a policy of brand building exercise in the FMCG retailing market, to invite new customers and to retain the existing customers the company designs various schemes and promotions viz. free bees, discounts, gift articles etc and market such offerings through a very aggressive advertising campaign in newspaper, handbills, inserts, hoarding and various other medias available in the market. During the process of such branch building exercise the company has spent a sum of Rs. 146,21,461/- on advertising and sales promotions during the years also the company has opted for charging one third of such expenditure in the profit and loss account and the balancing amount has been deferred for coming two years. Due to such polic....
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....tal expenditure merely because some direct or indirect benefits; immediate or a period of time, flow from the same. The Revenue does not quote any case law to the contrary. We take cue therefrom and treat the entire expenses as revenue expenditure. Coming to the Revenue's argument relying on assessee's accounting treatment in its books (supra), we notice that hon'ble apex court in a very recent decision in case of Taparia Tools Ltd. Vs. JCIT, Nasik (Civil Appeal Nos.6366 to 6368 of 2003 dated 23.03.2015) has dealt with an identical situation as under: 18) What follows from the above is that normally the ordinary rule is to be applied, namely, revenue expenditure incurred in a particular year is to be allowed in that year. Thus, if the ass....