2025 (7) TMI 1833

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....fore it against the order dated 20.03.2015 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the ACIT, Circle-10(1), New Delhi (hereinafter referred to as the Ld. AO). 2. The assessee's return of income was selected for scrutiny and mandatory notices were issued for assumption of jurisdiction. During the year the assessee company was engaged in the business of manufacture of industrial alcohol, ENA, IMFL country liquor and processing of bio-degradable waste and generation of power. The AO examined the expenses incurred as 'brand promotion expenses' capitalized under the head 'Intangible know-how and New brand development.' However, proportionate depreciation thereon has been added in the computation of ....

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....iness. The Assessing Officer has not pointed out any specific expense, which is of enduring benefit or has been incurred to acquire any capital asset. Such expenses in respect of on-going business are undisputedly Revenue in nature. Under the above facts, we fully concur with the findings of the ld. CIT (Appeals) also because similar recurring expenses incurred in earlier years have been allowed as Revenue expenses. The decisions relied upon by the ld. CIT (Appeals) also strengthen the finding arrived at by him under the facts and circumstances of the present case on the issue. The Hon'ble Supreme court in the case of Empire Jute Company Vs. CIT (supra) has been pleased to hold that it is only when an enduring advantage is in the capital fi....

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....se expenses were rightly disallowed. On the basis of the material before us in the form of paper book, the ld. AR has given details of the expenses and the same are reproduced for convenience as follows:- S. No Date Ledger A/c (Expenses) Particular Nature of Voucher Amount 1. 26.02.2012 Accident Petty Cash Cash payment 23,655/- 2. 03.06.2011 Legal & Prof. Cash Delhi Cash payment for stamp papers 1,10,000/- 3. 31.12.2011 Travelling Air Travel Bureau Ltd Journal Voucher 40,106/- 4. 18.01.2012 Travelling Exp. Payable Journal Voucher 37,000/- 5. 08.02.2012 Travelling Air Travel Bureau Ltd Journal Voucher 20,205/- 6. 31.03.2012 Tr....

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.... 23,655/-. 9. As regards the ground No.7, the same arises out of increase in book profits for making adjustment of Rs. 1,05,006/- while computing income u/s 115JB of the Act on account of disallowance u/s 14A of the Act as per Rule 8D. The ld.CIT(A) has restricted the amount to the exempt income of Rs. 59,971/- on merits, but, confirmed the adjustment directing the AO to restrict the adjustment to the extent of Rs. 59,971/-. It is trite law that no adjustment can be made in the book profits for the purpose of MAT u/s 115JB of the Act and the Hon'ble jurisdictional High Court of Delhi and Special Bench of the Delhi Tribunal have ruled the same in favour of the assessee for which reliance is placed on the following decisions:- (i)....