2024 (6) TMI 1584

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....erred as Ld. First Appellate Authority or in short Ld. 'FAA') in Appeal No. CIT(A), Delhi-6/104477/2018-19 arising out of the appeal before it against the order passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as 'the Act'), by the JCIT, Special Range-6, New Delhi (hereinafter referred to as the Ld. AO). 2. On hearing both the sides it comes up that the assessee company, referred to as MCIPL, in short, incorporated in 1988 and is a subsidiary of Microsoft Corporation, USA. During the year under consideration, MCIPL, has claimed to be engaged in the business of manufacturing, replicating, marketing and selling of Microsoft Software Retail products and services in India. Further, MCIPL claims to also be engaged in p....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... copies of invoices were also submitted. The pleas of assessee to justify the expenditure as a whole as revenue expenditure was not accepted and the AO held that the advertisement, publicity and sales promotion expense also include expense incurred for efforts to make Microsoft USA's trademarks, service marks and trade names well known in India and thus, disallowed 50% of the expenditure (i.e. 50% of INR 330,36,30,000 = INR 165,18,15,000) incurred on advertisement, publicity and sales promotion expense being capital in nature and has not allowed depreciation @ 25% under section 32 of Income tax Act, 1961. 2.2 As a matter of fact, similar disallowance was made by the AO in the previous FY i.e. 25% of sales promotion and advertisement ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ntribution made towards PF in the return of income filed for the subject year on the premise that provisions of section 36(1)(va) of the Act are to be read in conjunction with the provisions of section 43B of the Act. Accordingly, since the employee's contributions to PF were deposited before the due date of filing of return of income, the same were claimed by the Appellant as deductible expenditure. However, the AO did not accept the submission made by the assessee and made disallowance on account of the delayed deposit of employee's contribution to PF amounting to INR 66,561,775. This included the delays where Assessee had deposited the amount within the permissible grace period. 4. A disallowance was also made for short grant ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....271 (1)(c) of the Act on the ground of concealing particulars of income or furnishing inaccurate particulars of income. 5. That the assessing officer erred on facts and in law in levying interest under section 234D of the Act." 5.1 The Revenue has also filed the appeal raising the following grounds:- (1) Whether on the facts and in the circumstances in the case, the Ld. CIT (A) was right in deleting the addition of Rs. 165,18,15,000/- made on account of treating 50% of advertisement, publicity and sales promotion expenses as Capital Expenditure ignoring the fact that a huge outlay on the advertisement and marketing ultimately results into creating/improving the value of brand name of the company which is an intangi....