TaxTMI 
TaxTMI 
2018 (10) TMI 1351
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....llowance on account of Reward points 8,52,72,000/- (ii) Disallownce of Credit Investigation expenses 4,90,73,276/- (iii) Disallowance of expenditure on application capture 2,57,61,950/- (iv) Disallowance of advertisement expenses 105,27,85,289/- (v) Card acquisition expenses claimed up front 17,85,92,045/- (vi) Addition on a/c of gain on redemption of shares 11,55,38,563/- 2.1 Aggrieved, the assessee approached the Ld. CIT (A) challenging the additions and disallowances who partly allowed the assessee's appeal by dismissing assessee's challenge to disallowance of Rs. 8,52,72,000/- on account of reward scheme points. The Ld. CIT (A) deleted the disallowance of Rs. 4,90,73,276/- made on account of credit investigation expenses. The Ld. CIT (A) also deleted the disallowance of expenditure of Rs. 2,57,61,950/- on account of application capture expenses. With respect to the disallowance of advertisement expenses of 105,27,85,289/-, the Ld. CIT (A) partly sustained the disallowance by holding that an amount of Rs. 1 crore needed to be disallowed in this regard. With respect to disallowance of Rs. 17,85,92,045/- on account of card acquisition expenses the Ld. CIT(A) ....
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....hers' without giving any opportunity of being heard to the Appellant and without considering the submissions of the Appellant. 2.2 That the Ld. CIT (A) has erred in observing that the expense of Rs. 1 crore have not been incurred wholly and exclusively for business purpose and may have been given to persons who are not related to any business activities of the company. 3. Disallowance of card acquisition expenses 3.1 On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in confirming the disallowance of card acquisition expenses amounting to Rs. 17,85,92,045 made by the Ld. AO on the ground that the Appellant had accounted for these expenses as deferred revenue expenditure in its books of accounts and that these expenses were providing enduring benefit to the Appellant. 3.2 That, the Ld. CIT(A) has erred in merely placing reliance on the order passed by his predecessors for AY 2006-07 without independently examining the issue and distinguishing the decisions relied upon by the Appellant. 3.3 That, the Ld. CIT(A) and the Ld. AO have failed to appreciate that: i. the treatment is books of account is not decisive / conclusive for dec....
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.... Court had allowed the entire advertisement expenditure. A copy of the order of the Hon'ble High Court was placed on record. It was submitted that the observation of the Ld. CIT (A) that the assessee had not furnished proper details was incorrect and the details were available in the paper book filed by the assessee. 3.2 With respect to ground no. 3 pertaining to disallowance of card acquisition expenses it was submitted that this issue was also covered by the judgment of the Hon'ble Delhi High Court in assessee's own case for assessment year 2006-07 wherein the Hon'ble Delhi High Court had allowed the entire credit card acquisition expenditure in the year of incurrence u/s 37(1) of the Act. With respect to ground no. 4 on taxability of allotment of shares by VISA Inc. it was submitted that the issuance of shares is on capital account in the same cannot be taxed as income from business. It was further submitted that out of total shares numbering 1,54,609 shares allotted to the assessee, the assessee had sold 86,565 shares during the year under consideration on which tax had already been paid under the head 'capital gains' as short term capital gains and accordingly no further issu....
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....y evidences filed in support of these expenses as available on pages 148,149,151,154, 155,169,171,174 and 176 of the paper book filed by the assesse, it would be in fitness of things that the issue be re-examined by the AO in this regard. Accordingly, we restore this issue to the file of the AO to be adjudicated afresh after duly considering the evidences which the assessee seeks to rely upon and also after duly considering the ratio of the judgment of the Hon'ble Delhi High Court in the assessee's own case for assessment year 2006-07. The AO will also provide adequate opportunity to the assessee before adjudicating this issue. Accordingly ground nos. 2.1 and 2.2 stand allowed for statistical purposes. 5.2 Ground no. 3 which challenges the disallowance of card acquisition expenses amounting to Rs. 17,85,92,045/- is squarely covered in favour of the assessee in assessee's own case by the judgment of the Hon'ble Delhi High Court in assessment year 2006-07. While upholding the order of the ITAT, the Hon'ble Delhi High Court held that the assessee is entitled to treat the same as revenue expenditure in view of section 37(1) of the Act and the right to claim deferred revenue expenditur....