DCIT, CIRCLE- 10(1), NEW DELHI vs. GLOBUS SPIRITS LTD., NEW DELHI

PER N. K. BILLAIYA, AM:

Whether Id. CIT(A) erred on facts and in law in deleting the 1. addition of net of brand value expenses of Rs. 13,47,24,499/- considering them as revenue, whereas assessee has itself shown it under the block of assets as “capital asset” and claimed depreciation on it of Rs.5,37,79,978/- Whether Id. C1T(A) erred on facts and in law in deleting 2. addition of net brand value expenses of Rs. 13,47,24,499/- by considering it as revenue expenses, when “brand value expenses” denotes an expenditure incurred to increase the “goodwill” of the entity which is an intangible & treated as an asset and therefore it is capital in nature & can’t be allowed as revenue.

Whether Id. CIT(A) erred in law & on facts in relying on 3. earlier decision of Hon’ble ITAT in assessee’s own case for AY 2008- 09 wherein it was held that though expenses are capitalized in books of account but are allowable as revenue expenses, but neither in that decision nor in present case nature of such expenses was examined so as to arrive at a conclusion that such expenses were revenue in nature even though same were shown in audited accounts of assessee as capital in nature under the “block of assets”

Whether Id. C1T(A) erred in law & on facts in deciding issue 4. merely relying on the order of Hon’ble ITAT for AY 2008-09 without examining the facts and nature of expenses pertaining to RY 2013- 14.

Whether Id. CIT(A) erred in law & on facts in allowing “brand 5. value expenses” as revenue expenses merely relying on decision of Hon’ble ITAT not contested by department, without appreciating that principle of consistency are not absolute as held in case of C1T (Central) Ludhiana Vs. Punjab Breveries Ltd (2012) 20 taxmann.com 630(P&H).

The appellant craves leave, to add, alter or amend any 6. ground of appeal raised above at the time of the hearing.

3. At the very outset we have to state that the quantum of quarrel mentioned in the grounds by the revenue is not Rs.13.47 crores but only 1.48 crores.

4. A perusal of para- 4.3.3. on page 5 of the order of the CIT(A) makes it abundantly clear that the CIT(A) has given relief to the assessee only Rs.1,48,71,093/- . 5. On such quantum relief the tax effect would be less than Rs.50 lacs, therefore, this appeal by the revenue has to be dismissed in the light of CBDT Circular No. 17/2019 dated 08.08.2019. 6. However, if the AO finds that the tax effect is more than Rs.50 lacs then this appeal will be recalled as per provisions of the law. 7. In the result, the appeal of the revenue is dismissed. 8. Decision announced in the open court on 27.03.2023.