2018 (6) TMI 1555

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....on of disallowance of exhibition expenses at Rs..25,78,256/-, the Revenue also challenged deletion of addition of Rs..6,15,26,406/- made at the rate of 5% to the total turnover. 2. Brief facts of the case are that the assessee is engaged in the manufacture and sale of automatic lift doors. The assessee filed the return of income on 29.09.2014 admitting an income of Rs..27,62,59,570/-. The assessment under section 143(3) of the Income Tax Act, 1961 ["Act" in short] was completed by assessing the total income at Rs..34,03,64,232/- by making addition of 5% of the turnover worked out to Rs..6,15,26,406/- and disallowing exhibition expenses of Rs..25,78,256/-. 2.1 With regard to the addition of 5% of the turnover over and above the income decl....

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....ed that the order of the ld. CIT(A) on this issue should be set aside and restored that of the Assessing Officer. 5. On the other hand, the ld. Counsel for the assessee vehemently argued that by comparing the profit and expenses under two heads for the assessment year under consideration and previous assessment year, it is mere assumption of the Assessing Officer that the expenses are inflated and addition was made arbitrarily without any concrete materials and prayed for confirming the order passed by the ld. CIT(A) in deleting the addition. 6. We have heard both sides, perused the materials available on record and gone through the orders of authorities below. Since there was variation in the profits declared by the assessee for the asse....

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....various decisions, the ld. CIT(A) held that the exhibition expenses incurred by the assessee are revenue in nature. 8. Aggrieved, the Revenue is in appeal and the ld. DR submitted that the benefits derived from exhibition are not ephemeral or transitory in nature, but, the benefits are enduring in nature and hence the Assessing Officer rightly brought the same under capital field. 9. On the other hand, besides relying on various decisions including the judgement of the Hon'ble Supreme Court in the case of Taparia Tools Ltd. 372 ITR 605, by filing copy of the decision of the Coordinate Benches of the Tribunal in the case of ACIT v. Dorcas Market Makers P. Ltd. 2012 (11) TMI 541 - ITAT Chennai, the ld. Counsel for the assessee submitted tha....

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....e or intangible asset and, moreover, there was no evidence regarding accrual of any specific revenue in years under consideration or subsequently over a defined period with incurring of said expenditure, those expenses could be allowed entirely in year in which they were incurred. In the present case it is not the case of the Revenue that the assessee has not incurred the expenditure. It is an admitted fact that the expenditure incurred by the assessee is revenue in nature. We therefore, following the jurisdictional High Court decisions and other decisions, relied upon by the learned CIT(A) in his order as also the Special Bench decision of the Ahmedabad Bench of the Tribunal in the case of Ashima Syntex Ltd. (supra) dismiss this ground of ....