TaxTMI 
TaxTMI 
2025 (4) TMI 602
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....he Ld. CIT(A) erred in deleting the addition of Rs. 18,34,46,739/- on account of disallowance of expenses on sale promotion including publicity, photoshoot expenses and Information and Technology Cost (ERP Maintenance)." 2. Brief facts of the case are that assessee is engaged in the wholesale B2B business of selling fashion and lifestyle goods of various brands. Assessee filed its return of income for AY 2018-19 on 29.11.2018 declaring total income at Rs. NIL after setting off of Income from LTCG on Slump Sale and Income from Other sources with the Business Loss and brought forward unabsorbed depreciation and book profit has been calculated at(Rs. 860806974/-). The company has incurred loss under the heads Profits and Gains from Busienss....
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.... and advertising expenses. It includes search engine optimization, pay per click advertising, social media advertising (Facebook, Twitter etc.), SMS marketing, email or newsletter marketing, online classified marketing, etc., (B) Offline marketing expenses: Offline advertising expenses pertained to advertising on conventional models such as hoarding advertisements, campaigns etc. Further appellant submitted that (ii). Production expenses incurred towards photo-shoot of products and payments to models for the photo-shoots that were displayed on the web portal. Such product photos capture the attention of the customer. It ensures that the product matches the expectations of the customer, whether they are looking for specific colors, sizes, st....
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.... "We have extensively heard the learned advocates on both the sides, where emphasis on the part of the assessee had been that these are the revenue expense and they had no enduring benefits. The CIT (Appeals) found that these expenses were in the nature of the revenue expenses being recurring in nature and the details had been verified also. It is also given appealing rational that web-designing and development expenses are for the purpose of day to day running of the business and even if, it is to be termed as enduring benefit, the benefit cannot be said to accrue to the assessee in the capital field. It is quite logical that any time the website is developed, it is not a static website, it constantly would need updating otherwise fo....
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....e find that Ld. CIT(A) has taken a correct view in the matter, the items involved cannot be said to be enduring benefits being capital in nature. The case laws referred by the ld. CIT(A) is also germane and supports the case of the assessee. Furthermore, the ITAT, Delhi in the case of DCIT vs. Magic Bricks Reality Services Limited (Supra) has held as under:- "Hon'ble Supreme Court in the case of Empire Jute Company [1980 (5) TMI 1 - SUPREME COURTI deleted the disallowance holding that the expenses incurred by the assessee towards advertisement and business promotion are not in the nature of capital. We almost identical issue came up for consideration before the coordinate bench of the Tribunal in the case of Addl. CIT ....