TaxTMI 
TaxTMI 
2021 (4) TMI 277
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....ere legitimate business expenditure? (ii) Whether in the facts and circumstances of the case, the Tribunal was justified in deleting the addition made qua advertising expenses by failing to consider the fact that these expenses were incurred to build goodwill, which is, a capital asset? 3. With the consent of counsel for parties, the appeal is taken up for hearing and final disposal. 4. In order to adjudicate upon the questions of law framed above, it would be necessary to sketch out the broad contours of the case. 4.1. These questions of law concern the assessment year [in short 'AY'] 2010-2011. The assessee had filed its return on 27.09.2010, wherein it had declared a loss of Rs. 7,83,71,011/-. The return filed by the assessee was pr....
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....urred prior to the commencement of business were rightly added back by the AO. In support of this plea, it was pointed out that the AO has indicated that the assessee in his written note had stated that its business commenced on 29.10.2009. It was submitted that the 'experience centre' was launched only on 29.10.2009 and therefore, that had to be taken as the actual date when the assessee had set-up its business. 5.2. The mere fact that the assessee obtained stock of the goods, that it intended to trade in, was not enough. Since the assessee is a trading entity, it needed an outlet such as an experience centre for conducting its business; which, as indicated above, was set-up only on 29.10.2009. 5.3. The assessee could not have sold the g....
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...., it was sought to be demonstrated that several steps have been taken by the assessee to set-up the business in the previous AYs, which included placing orders in the domestic market. The emphasis was laid on the fact that there was no prohibition in the assessee carrying on its trading activity in the domestic market and therefore, the argument advanced on behalf of the revenue that the goods in which the assessee dealt in were also obtained from its holding company albeit on or after 29.10.2009 had no relevance in the given circumstances. 6.2 In support of this plea, reliance was placed on the following judgments: (i) Carefour WC & C India (P.) Ltd. v. Deputy Commissioner of Income Tax, (2015) 53 taxmann.com 289 (Delhi). (ii) Commiss....
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....t of TAN 21 Jan., 08 Importer Exporter Code (IEC) 7 Nov., 08 Lease Deed executed with Regus Business Centre 16 June, 08 Date of joining of MD 2 June, 08 Lease Deed executed for premises at 16 Dec., 08 Commercial Plot, Jasola Receipt of share application from Imanto AG July 2008 Resolution for opening of Bank Account 2 Aug., 08 Agreement for outsourced employees (including drivers, advisors positioned at dealer's sites and chef) 22 Sept., 08 Date of hiring of 6 senior employees Middle of the year Date of first local purchase 27 N....
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....a lease deed qua a commercial plot located at Jasola, Delhi was executed by the assessee on 16.12.2008; the assessee had entered into an agreement for outsourced employees (which included drivers, advisors positioned at the dealer's site and chef) on 22.09.2008; the assessee had hired six senior employees between the financial year [in short 'FY'] 2008-2009; the first local purchase was made on 27.11.2008; local sales were made by the assessee on 04.12.2008 and 26.03.2009; orders were received from Dawar International Electronics Pvt. Ltd. on 02.01.2009 and 22.01.2009; and purchase orders were raised on the assessee's holding company on 18.03.2009. 7.2. We have, consciously, only adverted to the steps taken by the assessee in the previous ....
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....e. The fact that the assessee had set-up an experience centre in the FY 2009-2010, which was another mode or platform for selling its goods, cannot have us hold that the assessee had not set-up its business in the previous AY. Therefore, the stated absence of the assessee on an online platform, in our view, is non-sequitur in the fact situation obtaining in the instant case. 8. Insofar as the second issue is concerned, which relates to the advertising expenditure, the submissions made on behalf of the revenue by Mr. Chandra, lacked conviction. Although, Mr. Chandra, did draw our attention to the AO's view qua the issue, which was, that the advertising expenditure had been incurred to build a brand, i.e., goodwill and therefore, should not ....