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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ NEW DELHI
Before: SHRI C.M. GARG & SHRI L.P. SAHU
ORDER
Per L.P. Sahu, Accountant Member:
This appeal filed by the Revenue is directed against the order of the ld. CIT(A) dated 20.03.2013 for the assessment year 2006-07 on the following ground : “1. The Ld. CIT(A) erred in deleting the addition of Rs.16,00,474/- made by the AO on account of Advertisement Expenses.”
2. The brief facts of the case are that the assessee is carrying on the business of export of furnishing materials. The assessee has incurred various expenditure on business activities, out of which one of the major expenditure is on advertisement and publicity which is to the tune of Rs.24,00,712/-. Having regard to the nature of expenditure, the Assessing Officer has allowed a sum of Rs.8,00,238/- out of the aforesaid expenditure, stating that the advertisement certainly has long lasting effect and spread over a number of years and gives the assessee a benefit of enduring nature. It was also observed that the assessee is incurring expenditure on yearly basis and it helps the assessee company to build up the “brand name” which is definitely an advantage of enduring nature. Against the order of the AO, the assessee filed appeal before the ld. CIT(A) who deleted the addition observing that the AO has not disputed the expenses which were incurred on publicity and sales promotion. It is also stated that similar expenses are incurred on annual basis by the assessee. The facts indicated that there is no creation of any fiscal assessee, which could not justify that this expenditure is capital in nature. Similarly, the cases relied upon by the AO were also distinguished, being based on different set of facts. He, therefore, deleted the addition.
The ld. DR relied upon the order of the AO and submitted that the ld. CIT(A) in the facts and circumstances of the case was not justified in deleting the addition. On the other hand, the ld. Counsel for the assessee supported the order of the ld. CIT(A) and submitted that the impugned order does not call for any interference.
We have considered the rival submissions and have gone through entire material on record and we do not find any infirmity in the decision arrived at by the ld. CIT(A). It is worthwhile to note that the AO while partly disallowing the expenditure on publicity for treating the same capital in nature, has not disputed the genuineness of the expenditure, but has rested his conclusion on the observation that such expenditure helps the assessee company to build up the “brand name” which is definitely an advantage of enduring nature. In this context, the ld. Counsel for the assessee relied upon the decision of Hon’ble Gujrat High Court in the case of CIT vs. Core Healthcare Ltd. as mentioned in the impugned order, where it has been held that the advertisement expenses incurred by the assessee to create brand image is allowable as revenue expenditure. The other decision in the case of ACIT vs. Global Healthcare Pvt. Ltd. (2012) 19 ITR (Tribunal) and the decision of Hon’ble jurisdictional High Court in the case of CIT vs. Salora Internation Ltd., 308 ITR (2009)(Del.) relied by the ld. CIT(A) also take care of the assessee’s stand. The assessee has been claiming such expenditure every year and, therefore, in our considered opinion, there is no justification to treat these expenses as capital in nature during this year. In view of all these facts, available on record, and the case laws cited, we do not find any infirmity in the impugned order on this count. Accordingly, the appeal of the Revenue, being devoid of merit, is liable to be dismissed.
In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 03.12.2015.