DCIT, CIRCLE- 16(2), NEW DELHI vs. MERIDIAN MOBILE PVT. LTD., NEW DELHI

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ITA 6768/DEL/2017Status: HeardITAT Delhi20 November 2023AY 2012-13Bench: SH. SHAMIM YAHYA (Accountant Member), SHRI KUL BHARAT (Judicial Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) relied on additional evidence without remanding the issue to the AO. The AO's order lacked detailed analysis of the expenditure. Therefore, the Tribunal remitted the issue back to the AO for fresh verification.

What were the facts?

The Assessing Officer disallowed Rs. 12,23,52,266/- claimed as advertisement and publicity expenditure, considering it to be of an enduring nature. The CIT(A) deleted this disallowance, relying on additional evidence. The Revenue appealed this deletion.

What were the issues?

Whether the CIT(A) was justified in deleting the disallowance of advertisement and publicity expenditure without proper remand to the AO, and whether the expenditure was of an enduring nature.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

For Respondent: Ms. Nimisha Singh, CIT-D.R
Hearing: 16.11.2023Pronounced: 20.11.2023

This appeal filed by the Revenue is directed against the order of Learned Commissioner of Income Tax (Appeals)-37, New Delhi dated 14.09.2017 pertaining to Assessment Year 2012-13.

2.

The grounds of appeal

filed by Revenue, which reads as under:

1. Whether on facts and in circumstances of the case, Ld. CIT(A) is legally justified in deleting the disallowance of Rs.12,23,52,266/- on account of expenditure on ‘advertisement and publicity’ by ignoring the findings of fact recorded by the Assessing Officer (the AO) that the expenditure was incurred to generate intangibles by way of building and promoting brand ‘fly’ owned by the ‘Meridian Group’?

2. Whether on facts and in circumstances of the case, Ld CIT(A) is legally justified in deleting disallowance of Rs.12,23,52,266/- on account of expenditure on ‘advertisement and publicity’ by ignoring a fact that the expenses incurred will give benefit to the assessee company for a long period and hence are of enduring nature?

DCIT vs. Meridian Mobile Pvt. Ltd. 2

3. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.”

3.

In this case, the Assessing Officer has noted that assessee company is engaged in the business of Import & distribution of Mobile handsets. The Assessing Officer further noted that the assessee has claimed expenditure of Rs.12,23,52,266/- on ‘Advertisement and Publicity’. The Assessing Officer was of the opinion that the above is enduring in nature and he held that the entire amount is to be added on account of disallowance in this regard. Upon assessee’s appeal, Learned CIT(A) deleted the addition against which Revenue is in appeal before us.

4.

We have heard the Learned DR. None appeared on behalf of the assessee.

5.

Upon careful consideration, we find that Learned CIT(A) has granted relief by referring to additional evidences. There is no mention whether the same was remanded to the AO or not. Learned CIT(A) has examined the nature of expenditure and deleted the same. However, we note that in AO’s order the details of the expenditure have not been analysed. In these circumstances we deem it fit to remit the issue to the file of AO and AO is directed to verify the ‘advertisement and publicity’ expenditure in detail. He may also consider the additional evidences submitted before the Learned CIT(A). Accordingly, the AO shall pass an order after providing proper opportunity as per law.

DCIT vs. Meridian Mobile Pvt. Ltd. 3 6. In the result, this appeal filed by Revenue is allowed for statistical purposes.

Order pronounced in the open court on 20.11.2023

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