CIT v. Salora International Ltd.

M/S. Pepsi Foods Limited, Gurgaon vs. ACIT, New Delhi

In the result, all the appeals of the assessee are treated as partly allowed

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…e profit earning machinery in motion or not for earning profits.". (Also see, CIT v. Spice Distribution Ltd., I. T. A. No. 597 of 2014, decided by the Delhi High Court on September 19, 2014 [2015] 374 ITR 30 (Delhi) and CTT v. Salora International Ltd. [2009] 308 ITR 199 (Delhi). Accepting the parameters of the "bright line test" and if the said para meters and tests are applied to Indian companies with reputed brands and substantial AMP expenses would lead to difficulty and unforeseen tax implications and complications. Tata, Hero, Mahindra, TVS, Baja], Godrej, Videocon group and several others are both manufac…

Pepsi Foods Pvt. Ltd., Gurgaon vs. DCIT, New Delhi

In the result, all the appeals of the assessee are treated as partly allowed

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…e profit earning machinery in motion or not for earning profits.". (Also see, CIT v. Spice Distribution Ltd., I. T. A. No. 597 of 2014, decided by the Delhi High Court on September 19, 2014 [2015] 374 ITR 30 (Delhi) and CTT v. Salora International Ltd. [2009] 308 ITR 199 (Delhi). Accepting the parameters of the "bright line test" and if the said para meters and tests are applied to Indian companies with reputed brands and substantial AMP expenses would lead to difficulty and unforeseen tax implications and complications. Tata, Hero, Mahindra, TVS, Baja], Godrej, Videocon group and several others are both manufac…

DCIT, New Delhi vs. M/S. Ssipl Retail Ltd., New Delhi

In the result, appeal of the Revenue is dismissed

Bench: Shri G. D. Agrawal & Shri Amit Shukla

…ether they are capital or revenue and has also held that the companies invite VIPs and celebrities on various launches and campaigns for better publicity and that such expenses are Revenue in nature. I.T.A. No.4399/DEL/2014 7 CIT Vs Salora International Ltd. 308 ITR 199 Del 17. In this case the AO disallowed one third of the total advertisement expenses of Rs 3.08 crores in AY 2001-02 by holding that they have resulted in enduring benefit The CIT(A) deleted it and the ITAT upheld the decision of the CIT(A). On reference by the Department, the jurisdictional High Court of Delhi dismissed the matter by holding tha…

ACIT, New Delhi vs. M/S. Globus Spirits Ltd., New Delhi

Appeal is dismissed

Bench: Shri I. C. Sudhir & Shri O. P. Kant

…d sale of liquor. He placed reliance on the following decisions :- (i) Empire Jute Company Vs. CIT 124 ITR 1 (SC); (ii) 335 ITR 29 (Del.); (iii) CIT Vs. Usha Iron & Ferro Metal Corporation Ltd. 296 ITR 140 (Del) (iv) CIT Vs. Salora International Ltd., 308 ITR 199 (Del); (v) CIT Vs. Liberty Group Marketing Division 315 ITR 125 (P & H); (vi) Sony India Pvt. Ltd. Vs. DCIT 315 ITR 150 (AT) (Del.) (VII) CIT Vs. Core Health Care Ltd. 308 ITR 263 (Guj.) 4.3 On perusal of the orders of the authorities below, we find that though during the year the assessee had capitalized a sum of Rs.1,79,77,181/- under th…

DCIT, New Delhi vs. M/S. Vodafone Mobile Services Ltd., New Delhi

In the result, all the seven appeals of the Revenue are dismissed

Bench: Sh. O.P. Kant & Sh. Kuldip Singhsl. No.

…ture - Allowability of - Assessment years 2001-02 and 2002-03 - Expenditure on publicity and advertisement is to be treated as revenue in nature allowable fully in year in which it is incurred [In favour of assessee] (ii) CIT v Salora Intemational ltd. [2009] 308 ITR 199 (DELHI) Advertisement expenditure for launching products is revenue expenditure (iii) CIT v Pepsico India Holdings (P.) Ud.[2012] 207 Taxman 5 (Delhi) Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessee incurred certain expenditure on advertising and marketing of its products and claimed it as business ex…

DCIT, New Delhi vs. M/S Segram India Pvt. Ltd., New Delhi

Bench: Shri J.S. Reddy & Shri Sudhanshu Srivastavaay: 2004-05 Ay: 2005-06

…Ltd.. The Ld. AR also cited Hindustan Aluminium Corporation Limited v. CIT: 159 ITR 673, CIT v. I.T.A. 3811/D/09 & 3525/Del/09 I.T.A. 2770/D/11, 2530/D/11 Assessment year 2004-05, 05-06 Berger Paints (India) Ltd. (254 ITR 503), CIT v. Salora International (308 ITR 199) (Del.), CIT v. Casio India Ltd. (335 ITR 196) (Del) and CIT v. Adidas India Marketing Ltd. (195 Taxman 256) (Del.) to support his contentions. 8.3 The Ld. CIT (DR) supported the order of the Ld. TPO/AO. 8.4 We have heard the rival contentions and perused the orders of the jurisdictional High Court and that of the co-ordinate benches. We fi…

Pernod Richard India Pvt. Ltd, Gurgaon vs. DCIT, New Delhi

Bench: Shri J.S. Reddy & Shri Sudhanshu Srivastavaay: 2004-05 Ay: 2005-06

…Ltd.. The Ld. AR also cited Hindustan Aluminium Corporation Limited v. CIT: 159 ITR 673, CIT v. I.T.A. 3811/D/09 & 3525/Del/09 I.T.A. 2770/D/11, 2530/D/11 Assessment year 2004-05, 05-06 Berger Paints (India) Ltd. (254 ITR 503), CIT v. Salora International (308 ITR 199) (Del.), CIT v. Casio India Ltd. (335 ITR 196) (Del) and CIT v. Adidas India Marketing Ltd. (195 Taxman 256) (Del.) to support his contentions. 8.3 The Ld. CIT (DR) supported the order of the Ld. TPO/AO. 8.4 We have heard the rival contentions and perused the orders of the jurisdictional High Court and that of the co-ordinate benches. We fi…

Pernod Ricard India Pvt. Ltd., New Delhi vs. DCIT, New Delhi

Bench: Shri J.S. Reddy & Shri Sudhanshu Srivastavaay: 2004-05 Ay: 2005-06

…Ltd.. The Ld. AR also cited Hindustan Aluminium Corporation Limited v. CIT: 159 ITR 673, CIT v. I.T.A. 3811/D/09 & 3525/Del/09 I.T.A. 2770/D/11, 2530/D/11 Assessment year 2004-05, 05-06 Berger Paints (India) Ltd. (254 ITR 503), CIT v. Salora International (308 ITR 199) (Del.), CIT v. Casio India Ltd. (335 ITR 196) (Del) and CIT v. Adidas India Marketing Ltd. (195 Taxman 256) (Del.) to support his contentions. 8.3 The Ld. CIT (DR) supported the order of the Ld. TPO/AO. 8.4 We have heard the rival contentions and perused the orders of the jurisdictional High Court and that of the co-ordinate benches. We fi…

ACIT, New Delhi vs. Pernod Ricard (India) Pvt. Ltd., Gurgaon

Bench: Shri J.S. Reddy & Shri Sudhanshu Srivastavaay: 2004-05 Ay: 2005-06

…Ltd.. The Ld. AR also cited Hindustan Aluminium Corporation Limited v. CIT: 159 ITR 673, CIT v. I.T.A. 3811/D/09 & 3525/Del/09 I.T.A. 2770/D/11, 2530/D/11 Assessment year 2004-05, 05-06 Berger Paints (India) Ltd. (254 ITR 503), CIT v. Salora International (308 ITR 199) (Del.), CIT v. Casio India Ltd. (335 ITR 196) (Del) and CIT v. Adidas India Marketing Ltd. (195 Taxman 256) (Del.) to support his contentions. 8.3 The Ld. CIT (DR) supported the order of the Ld. TPO/AO. 8.4 We have heard the rival contentions and perused the orders of the jurisdictional High Court and that of the co-ordinate benches. We fi…

M/S.. Synthes Medical Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, both the appeals for assessment years 2007-08 and 2008-09 filed by the assessee are partly allowed for statistical purposes and the appeal filed by the Revenue is dismissed

Bench: Sh. Sudhanshu Srivastava & Sh. O.P. Kant

…use of said items for business purpose. 5.1 Before us, the learned counsel submitted that the ad-hoc disallowance of revenue expenditure is not in accordance with law. He relied on the judgment in the case of CIT Vs. The Salora International Ltd. reported in 308 ITR 199 (Del) and CIT Vs. Spice Distribution Ltd. reported in 374 ITR 30 (Del) to submit that expenditure incurred on sales promotion is revenue expenditure. It was contended that there is no concept of deferred revenue expenditure under the Act as held in the case of CIT Vs. Citi Financial Consumer Fin. Limited, 330 ITR 29. 5.2 On the contrary, the Ld.…

M/S.. Synthes Medical Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, both the appeals for assessment years 2007-08 and 2008-09 filed by the assessee are partly allowed for statistical purposes and the appeal filed by the Revenue is dismissed

Bench: Sh. Sudhanshu Srivastava & Sh. O.P. Kant

…use of said items for business purpose. 5.1 Before us, the learned counsel submitted that the ad-hoc disallowance of revenue expenditure is not in accordance with law. He relied on the judgment in the case of CIT Vs. The Salora International Ltd. reported in 308 ITR 199 (Del) and CIT Vs. Spice Distribution Ltd. reported in 374 ITR 30 (Del) to submit that expenditure incurred on sales promotion is revenue expenditure. It was contended that there is no concept of deferred revenue expenditure under the Act as held in the case of CIT Vs. Citi Financial Consumer Fin. Limited, 330 ITR 29. 5.2 On the contrary, the Ld.…

DCIT, New Delhi vs. M/S. Synthes Medical Pvt. Ltd., New Delhi

In the result, both the appeals for assessment years 2007-08 and 2008-09 filed by the assessee are partly allowed for statistical purposes and the appeal filed by the Revenue is dismissed

Bench: Sh. Sudhanshu Srivastava & Sh. O.P. Kant

…use of said items for business purpose. 5.1 Before us, the learned counsel submitted that the ad-hoc disallowance of revenue expenditure is not in accordance with law. He relied on the judgment in the case of CIT Vs. The Salora International Ltd. reported in 308 ITR 199 (Del) and CIT Vs. Spice Distribution Ltd. reported in 374 ITR 30 (Del) to submit that expenditure incurred on sales promotion is revenue expenditure. It was contended that there is no concept of deferred revenue expenditure under the Act as held in the case of CIT Vs. Citi Financial Consumer Fin. Limited, 330 ITR 29. 5.2 On the contrary, the Ld.…

M/S Megasoft Solutions (India) Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, the Appeal filed by the Assessee stands partly

Bench: Shri H.S. Sidhu

…company's products and services, as is evident from the receipt filed at pages 165 of the paper book and delete the addition in dispute by relying on the judgment of Hon'ble High Court of Delhi in the case of CIT vs. Salora International Limited reported in 308 ITR 199 wherein it has been held that expenses incurred for advertisement and sales promotion and brand building are allowable expenses. 6.3 With regard to ground no. 8 & 9 relating to adhoc disallowance expenditure of Rs.1,24,003/- (i.e. 10% of the telephone expense and vehicle running and maintenance expenses) and disallowing the amount of Rs. 36,05…

DCIT, New Delhi vs. M/S Spice Distribution Ltd., New Delhi

In the result, the Revenue’s Appeal and Assessee’s Cross

Bench: Shri H.S. Sidhu & Shri O.P. Kantassessment Year: 2010-11 Dcit, Vs. M/S Spice Distribution Ltd. Circle 9(1), Room No. 163, 60-D, Street No. C-5, Cr Building, New Delhi Sainik Farms, New Delhi - 62 (Pan: Aabch8481N) (Appellant) (Respondent) & Cross Objection No. 12/Del/2014 (In Ita No. 4281/Del/2013) Assessment Year: 2010-11 M/S Spice Distribution Ltd., Vs. Dcit, Circle 9(1), S Global Knowledge Park Room No. 163, Cr Bldg.,New Delhi 191 & 19B, Sector-125, Noida (Up) (Appellant) (Respondent) Department By : Smt. Anima Bernwal, Sr. Dr Respondent By : Sh. Ajay Vohra, Sr. Advocate & Sh. Rohit Garg, Advocate

…IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘G’ : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER Assessment Year: 2010-11 DCIT, vs. M/S SPICE DISTRIBUTION LTD. CIRCLE 9(1), ROOM NO. 163, 60-D, STREET NO. C-5, CR BUILDING, NEW DELHI SAINIK FARMS, NEW DELHI - 62 (PAN: AABCH8481N) (APPELLANT) (RESPONDENT) AND CROSS OBJECTION NO. 12/Del/2014 (IN ITA NO. 4281/DEL/2013) Assessment Year: 2010-11 M/S SPICE DISTRIBUTION LTD., VS. DCIT, CIRCLE 9(1), S GLOBAL KNOWLEDGE PARK ROOM NO. 163, CR BLDG.,NEW DELHI 191 & 19B, SECTOR-125, NOIDA (UP) (APPELLANT) (RESPONDENT) Depa…

Ge Capital Services India vs. Addl CIT Range 2

In the result, the appeals of the assessee and Revenue are partly allowed for

Bench: Smt Diva Singh & Sh.L.P.Sahu

…he higher purchase of vehicles and homes and the period of such financing were ranging from less than 1 year upto 5 years was allowable in the year in which the expenditure was incurred and not over 5 years; Page 20 of 40 I.T.A .No.-2808 & 2898/Del/2007 2. 308 ITR 199 in the case of CIT vs. Salora International Ltd., head note reads as under: "For the assessment year 2001-02, the assessee had incurred. Advertising expenditure of about Rs. 3.08 crores for launching of its products and the AO held that the expenditure was of an enduring nature and treated one-third of it as capital expenditure. The Tribunal, co…

DCIT Circle 12 (1) vs. G.E. Capital Services India

In the result, the appeals of the assessee and Revenue are partly allowed for

Bench: Smt Diva Singh & Sh.L.P.Sahu

…he higher purchase of vehicles and homes and the period of such financing were ranging from less than 1 year upto 5 years was allowable in the year in which the expenditure was incurred and not over 5 years; Page 20 of 40 I.T.A .No.-2808 & 2898/Del/2007 2. 308 ITR 199 in the case of CIT vs. Salora International Ltd., head note reads as under: "For the assessment year 2001-02, the assessee had incurred. Advertising expenditure of about Rs. 3.08 crores for launching of its products and the AO held that the expenditure was of an enduring nature and treated one-third of it as capital expenditure. The Tribunal, co…

DCIT, New Delhi vs. M/S Spice Communication Ltd., Noida

In the result, the appeal in ITA No

Bench: Sh. I.C. Sudhir & Sh. O.P. Kantassessment Year: 2006-07 Deputy Commissioner Of Income Vs. M/S. Spice Communication Ltd., Tax, Circle 9(1), Room No. 163, C/O- Idea Cellular Ltd., A-68, C.R. Building, New Delhi Sector-64, Noida. Gir/Pan : Aagcs6070H (Appellant) (Respondent) & C.O. No. 77/Del/2011 [In Ita No. 988/Del/2011] Assessment Year: 2006-07 M/S. Spice Communication Ltd., Vs. Deputy Commissioner Of Income C/O- Idea Cellular Ltd., A-68, Tax, Circle 9(1), Room No. 163, Sector-64, Noida. C.R. Building, New Delhi Gir/Pan : Aagcs6070H (Appellant) (Respondent) & Assessment Year: 2006-07 M/S. Idea Cellular Ltd., A-68, Vs. Acit, Circle-50(1), New Delhi Sector-64, Noida Gir/Pan : Aaacb2100P (Appellant) (Respondent) Assessee By Sh. Ronak G. Doshi, Ca Department By Sh. B.K. Singh, Cit(Dr) Date Of Hearing 05.04.2016 Date Of Pronouncement 25.05.2016 & C.O. No. 77/Del/2011

…cer to allow the assessee’s claim of deduction on account of advertisement and publicity expenses in all the three assessment years." 3. The aforesaid reasoning and ratio was approved in case of Commissioner of Income Tax Vs. Salora Internation Limited (2009) 308 ITR 199, wherein a Division Bench of this Court opined. “3. The first issue that is sought to be raised in this appeal pertains to advertising expenditure of approximately Rs 3.08 crores. According to the Assessing Officer, the expenditure were incurred for launching of its products. The Assessing Officer was of the view that such expenditure was of an e…

Idea Cellular Ltd., Noida vs. ACIT, New Delhi

In the result, the appeal in ITA No

Bench: Sh. I.C. Sudhir & Sh. O.P. Kantassessment Year: 2006-07 Deputy Commissioner Of Income Vs. M/S. Spice Communication Ltd., Tax, Circle 9(1), Room No. 163, C/O- Idea Cellular Ltd., A-68, C.R. Building, New Delhi Sector-64, Noida. Gir/Pan : Aagcs6070H (Appellant) (Respondent) & C.O. No. 77/Del/2011 [In Ita No. 988/Del/2011] Assessment Year: 2006-07 M/S. Spice Communication Ltd., Vs. Deputy Commissioner Of Income C/O- Idea Cellular Ltd., A-68, Tax, Circle 9(1), Room No. 163, Sector-64, Noida. C.R. Building, New Delhi Gir/Pan : Aagcs6070H (Appellant) (Respondent) & Assessment Year: 2006-07 M/S. Idea Cellular Ltd., A-68, Vs. Acit, Circle-50(1), New Delhi Sector-64, Noida Gir/Pan : Aaacb2100P (Appellant) (Respondent) Assessee By Sh. Ronak G. Doshi, Ca Department By Sh. B.K. Singh, Cit(Dr) Date Of Hearing 05.04.2016 Date Of Pronouncement 25.05.2016 & C.O. No. 77/Del/2011

…cer to allow the assessee’s claim of deduction on account of advertisement and publicity expenses in all the three assessment years." 3. The aforesaid reasoning and ratio was approved in case of Commissioner of Income Tax Vs. Salora Internation Limited (2009) 308 ITR 199, wherein a Division Bench of this Court opined. “3. The first issue that is sought to be raised in this appeal pertains to advertising expenditure of approximately Rs 3.08 crores. According to the Assessing Officer, the expenditure were incurred for launching of its products. The Assessing Officer was of the view that such expenditure was of an e…