2005 (9) TMI 31

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....revenue expenses on the ground that the benefit of such expense would flow for subsequent years also? 2. Whether in the facts and circumstances the Assessing Officer having accepted the principle of spreading over of expenses incurred in one assessment year by treating the same to be deferred revenue expense for earlier years and did not allow the deduction of full amount of expense was right in refusing to allow the deduction of unadjusted expense during the assessment year in question on the ground that the principle of spreading over of allowable revenue expenditure is not permissible in law?" The factual matrix on which these questions have arisen relates to the claim of the assessee for deduction under section 37(1) for the expen....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....revenue expenditure. As envisaged under section 37 either if it is a revenue expenditure it has to be allowed in the year of its occurrence and in case it is not a revenue expenditure, it is not to be allowed at all. Considering it to be a revenue expenditure for the assessment years 1993-94 and 1994-95, the Assessing Officer only allowed the expenses actually incurred during those assessment years and disallowed the claim for deduction in those assessment years which he has claimed as incurred in earlier years but claimed deduction on the basis of the estimated benefits arrived at by the assessee during that year on deferred basis. The Commissioner of Income-tax (Appeals), had agreed with the opinion expressed by the Assessing Officer a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....preading over of the expenses to be allowed for three years notwithstanding the assessee having already claimed the entire expenditure spread over for two years, it ought to have spread over the same for 1995-96. The present claim arises on account of the finding given by the Tribunal that for the expenditure on advertisement, it is to be allowed as a whole not in the years in which it is incurred but spread over for three years. The principle enunciated by the Tribunal in terms amounts to acceptance of the principle of spreading over the advertisement expenditure of the nature in question over a number of assessment period estimates return value period. While the assessee had spread over the expenses over two assessment years, the Tribu....