TaxTMI 
TaxTMI 
2019 (4) TMI 1659
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....rcumstances of the case. 2. The Ld. CIT(A) has erred in law and on the facts and circumstances of the case by holding that the expenses incurred by appellant on advertisement and sales promotion were in the nature of capital expense and thereby disallowing the said expenses. 3. The Ld. CIT(A) has erred in law and on the facts and circumstances of the case by not following the principle of consistency, despite there being no change in facts." "ITA NO.5004/DEL/2014 (AY 2013-14 1. The order passed by the Learned Commissioner of Income Tax (Appeals)-6 ("Ld. CIT(A)") under Section 250 of the Act is bad in law and on the facts and circumstances of the case. 2. The Ld. CIT(A) has erred in law and on the facts and circumstances of the case by holding that the expenses incurred by appellant on advertisement and sales promotion were in the nature of capital expense and thereby disallowing the said expenses. 3. The Ld. CIT(A) has erred in law and on the facts and circumstances of the case by holding that the road access charges incurred by appellant were in the nature of capital expense and thereby disallowing the said expenses. 4. The Ld. CIT(A) has erred in law and on the fact....
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....presentatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. GROUND NO.1 IN ITA NO.5003/DEL/2014 (AY 2012-13) ITA NO.5004/DEL/2014 (AY 2013-14) 8. Ground No.1 in ITA NO.5003/Del/2014 (AY 2012-13) and ITA No.5004/Del/2014 (AY 2013-14) need no findings being general in nature. GROUND NO.2 IN ITA NO.5003/DEL/2014 (AY 2012-13) ITA NO.5004/DEL/2014 (AY 2013-14) 9. Undisputedly, assessee has debited an amount of Rs. 12,33,64,847/- and Rs. 14,69,15,576/- in profit & loss account on account of Advertisement & Sales Promotion (AMP) expenses for AYs 2012-13 & 2013-14 respectively and treated the expenses as revenue in nature. It is not in dispute that assessee is an importer and distributor of wine and spirits in India and bearing routine risk. It is also not in dispute that in AY 2009-10, first time AMP expenses incurred by the assessee were brought to tax by the Revenue under transfer pricing provisions by making ALP adjustment of Rs. 6,64,70,841/- which have been deleted by the coordinate Bench of the Tribunal vide order dated 23.08.2018 in ITA No.1906/....
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.... the Hon'ble High Court of Delhi in case of Monto Motors Ltd. (supra) by returning following findings :- "4. In view of the factual matrix which is available on record and as the Assessing Officer has not dealt with the factual matrix in detail we are not inclined to admit the present appeal. The advertisement expenses as per the findings of both the CIT (Appeals) and the Tribunal were not of capital nature. Advertisement expenses when incurred to increase sales of products are usually treated as a revenue expenditure, since the memory of purchasers or customers is short. Advertisement are issued from time to time and the expenditure is incurred periodically, so that the customers remain attracted and do not forget the product and its qualities. The advertisements published/displayed may not be of relevance or significance after lapse of time in a highly competitive market, wherein the products of different companies compete and are available in abundance. Advertisements and sales promotion are conducted to increase sale and their impact is limited and felt for a short duration. No permanent character or advantage is achieved and is palpable, unless special or specific factors ....
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....inted out by Lord Radcliffe in CIT v. Nchanga Consolidated Copper Mines Ltd. [1965158 ITR 241 (PC), it would be misleading to suppose that, in all cases, securing a benefit for the business would be prima facie capital expenditure "so long as the benefit is not so transitory as to have no endurance at all". There may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, nonetheless, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a. commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched the expenditure would be on revenue account even though the advantage may endure for an indefinite....
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....w of the matter, this issue is remanded back to the AO to decide afresh after providing an opportunity of being heard to the assessee, hence ground no.3 of ITA No.5004/Del/2014 (AY 2013- 14) is determined in favour of the assessee for statistical purposes. GROUND NO.4 IN ITA No.5004/Del/2014 (AY 2013-14) 22. AO by invoking the provisions contained u/s 40A (ia) and Notification No.56/2012 dated 31.12.2012 issued by the CBDT disallowed an amount of Rs. 9,81,336/- debited by the assessee in P&L account on account of bank guarantee commission. 23. Undisputedly, the assessee has made certain payments to scheduled banks qua bank guarantee provided by the banks on which TDS was not deducted. The ld. CIT (A) while relying upon the Notification NO.56/2012 dated 31.12.2012 allowed part relief to the assessee for the bank guarantee commission paid postissuance of the Notification. 24. When we examine the assessment order AO as well as CIT (A) have accepted the proposition put forth by the assessee that bank guarantee commission does not cover under the definition of "interest", hence section 194A is not applicable to such payment. It is also settled principle of law that in case of bank....