TaxTMI 
TaxTMI 
2016 (3) TMI 926
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....al, vide order dated 8th February, 2012, but, as a result of Hon'ble Bombay High Court's directions dated 13th November, 2014, these appeals are now before us for fresh adjudication on the following issues :- (i) Ground no.6 of the assessee's appeal relating to disallowance of advertisement expenses as prior year's expenses. The said ground is as follows :- "On the facts and in the circumstances of the case the learned CIT(A) has erred in confirming the disallowance of prior year's expenses of Rs. 87,58,803/-. He ought not to have done so." (ii) Ground no.10 of the assessee's appeal relating to disallowance of bad debts. This ground is reproduced below : "On the facts and in the circumstances ....
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....hat since liability crystallised during this year, these expenses should be allowed as deduction in this year - even as per mercantile method of accounting that the assessee is pursuing. The Assessing Officer, however, declined the deduction on the ground that these expenses pertained to prior period, and, for this reason, deduction could not be allowed in this year. Aggrieved, assessee carried the matter in appeal before the learned CIT(A) but without any success. Learned CIT(A) noted that the dates on which bills have been issued are dates "ranging from 17th March to 31st March 1997" which fell outside the current previous year, and, therefore, the claim cannot be allowed in this year. The assessee is not satisfied and is in further appea....
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....f. The authorities below declined this deduction on the ground that it did not pertain to trading, and not pertain to trading, and was for the purposes of buying an office, and as such, it was a capital loss. The same was the position with respect to house rent deposit of Rs. 12,750/- given to one Mr. Mehta. Finally, an amount of Rs. 69,264/- which was aggregate of small amounts written off, was declined as deduction on the ground that the assessee did not prove that these amounts have actually become bad. Aggrieved by the stand so taken by the Assessing Officer and the learned CIT(A), the assessee is in further appeal before us. 9. We have heard the rival contentions, perused the material on record and duly considered factual matrix of ....
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....erned, only a few undisputed material facts need to be taken note of. During the course of assessment proceedings, the Assessing Officer noted that while the assessee has debited GDR (Global Depository Receipts) share issue expenses amounting to Rs. 5,37,44,741/- to share premium account, he has claimed deduction of 1/10th of the GDR share expenses, i.e. Rs. 53,74,474/-. While the Assessing Officer accepted that the said treatment is in accordance with the ICAI guidelines, he was of the view that "there is no reason for the assessee to deviate from the treatment in books of accounts". The Assessing Officer further noted that these expenses are capital in nature, as held by the Hon'ble Supreme Court in the case of Punjab State Industrial....
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....isallowance made by the A.O. is hereby deleted." 14. The Assessing Officer is not satisfied and is in appeal before us. 15. We have noted that the grievance of the assessee is confined to the issue that these expenses are capital in nature, and he has not even disputed applicability of section 35D. However, what the Assessing Officer has overlooked is that there is no bar on capital expenses being amortised under section 35D. Section 35D deals with amortisation of expenses over a period of ten years and such an amortisation is not dependent upon the expenses being revenue in nature. Section 35D(2)(iv) categorically deals with the expenses in connection with the issue, or public subscription of shares and debentures of the Company. In ....