ITO, New Delhi V. M/s. FIITJee Hyderabad Classes Ltd., New Delhi

ITA 2933/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1274 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUKHVEER CHOUDHARY
• Assessee Lawyers: C S AGGARWAL; R P MAL
• Keywords: Business expenditure; Royalty expenses; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI RAJPAL YADAV, JM ITA NO. 2933/DEL/2012 ASSESSMENT YEAR 2007-08 ITO, WARD 11(2) VS. M/S FIITJEE HYDERABAD CLASSES LTD. NEW DELHI 29-A, ICES HOUSE, KALU SARAI SARVA PRIYA VIHAR NEW DELHI 110 016 PAN: AAACF 7993 G (APPELLANT) (RESPONDENT) APPELLANT BY:- SH.SUKHVEER CHOUDHARY, SR.D.R. RESPONDENT BY:- SRI C.S. AGGARWAL, SR.ADV AND SRI R.P.MAL, ADV. O R D E R PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF THE LD.CIT(A)-XII, NEW DELHI DT. 16.04 .2012 PERTAINING TO THE ASSESSMENT YEAR 2007-08 ON THE FO LLOWING GROUNDS. 1. THE LD.CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING TH E ADDITION OF RS.80,87,520/- ON ACCOUNT OF ROYALTY ON UNACCOUNTED RECEIPTS. 2. THE LD.CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN HOLDING THA T ROYALTY PAYMENT HAD NO LINKAGE WITH THE SPREADING OVER OF INCOME RECEIVED FROM FEES ON ENROLMENT OF T HE ITA 2933/DEL/2012 PAGE 2 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI STUDENTS THOUGH AS PER THE AGREEMENT, 20% OF THE GROSS COURSE FEES WAS REQUIRED TO BE PAID AS ROYALT Y. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY GROUND OF APPEAL RAISED ABOVE, AT THE TIME OF HEARING. 3. MR.SUKHVEER CHOUDHARY, THE LD.SR.D.R. SUPPORTED THE ORDER OF THE AO WHEREAS SHRI CS AGGARWAL, SR.AD VOCATE SUPPORTED THE ORDER OF THE FIRST APPELLATE AUTHORIT Y. AFTER HEARING RIVAL CONTENTIONS WE HOLD AS FOLLOWS. 4. ON THE FIRST ISSUE I.E. ADDITION ON ACCOUNT OF ROYALTY OF UNACCOUNTED RECEIPTS, THE FACTS ARE AS FOLLOWS. THE ASSESSEE HAS RECEIVED FEES FROM STUDENTS ENROLLED FOR A TWO YEAR PROGRAMME. ONLY A PART OF THE INCOME WAS ACCOUNTED FOR DURING THE YEAR ON THE GROUND THAT THE FEE IN QUEST ION RELATES TO TWO FINANCIAL YEARS. SIMILARLY ON MATCHING PRIN CIPLE, A PART OF THE EXPENSE WAS ACCOUNTED FOR PROPORTIONATELY D URING THE YEAR. THE ASSESSEE PAID ROYALTY TO ITS HOLDING COM PANY M/S HITJEE @ 20% OF THE FEE RECEIVED. HOWEVER AS FAR A S EXPENSES ON ACCOUNT OF ROYALTY IS CONCERNED, THE ENTIRE AMOU NT WAS CLAIMED DURING THE CURRENT YEAR ITSELF WITHOUT APPO RTIONING THE SAME IN TWO YEARS. ITA 2933/DEL/2012 PAGE 3 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI 5. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE ROYALTY EXPENSES SHOULD NOT BE DISALLOWED IN TH E SAME PROPORTION AS OTHER EXPENSES, ON THE GROUND THAT A PART OF THE ROYALTY WAS RELATABLE TO THE SUBSEQUENT YEAR. THE ASSESSEE REPLIED THAT THE ROYALTY @ 20% OF THE GROSS COURSE FEE RECEIVED WAS PAID TO THE LICENSOR, AS PER THE TERMS OF THE AGREEMENT AND THAT AS PER THE AGREEMENT, ROYALTY BECOMES DUE AS SOON AS A STUDENT IS ENROLLED, IRRESPECTIVE OF REALIZAT ION OF FEES OR ACCRUAL THEREOF. THE AO REJECTED THIS CONTENTION OF THE ASSESSEE ON THE FOLLOWING GROUNDS:- A) THE ASSESSEE DOES NOT ACCOUNT FOR THE PORTION OF TH E FEES IT RECEIVES FROM THE STUDENTS ENROLLED FOR THE TWO YEAR PROGRAMME ON THE GROUND THAT IT IS AN ADVANCE AND ACCRUES ONLY IN THE SECOND YEAR OF THE PROGRAMME. B) THE EXPENDITURE RELATABLE TO SUCH INCOME SHOULD ALS O BE CARRIED FORWARD TO THE SUBSEQUENT YEAR AS PER THE ACCOUNTING POLICY FOLLOWED BY THE ASSESSEE FOR OTHE R EXPENSES. C) THE CLAIM OF ROYALTY EXPENSES AS SHOWN BY THE ASSES SEE DISCLOSED DISTORTED PRESENTATION OF PROFITS. D) ROYALTY EXPENSES ARE DIRECT CHARGE ON THE GROSS COURSE FEES AND IT DOES NOT STAND TO REASON THAT IT SHOULD BE ITA 2933/DEL/2012 PAGE 4 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI FULLY ACCOUNTED FOR WHEN THE FEE ITSELF IS BEING DEFERRED TO THE SUBSEQUENT YEAR. 6. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN AP PEAL. 7. THE FIRST APPELLATE AUTHORITY CONSIDERED THE CLAUSES IN THE LICENSE AGREEMENT AND THEREAFTER AP PLIED THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. CITY CONSUMER FINANCIAL SERVICES AND UPHELD THE CLA IM OF THE ASSESSEE. 8. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 9. ARTICLE V OF THE LICENSE AGREEMENT READS AS FOL LOWS. ARTICLE 5: CONSIDERATION 1. ROYALTY A) THE LICENSEE AGREES TO PAY TO THE LICENSOR 20% OF T HE GROSS COURSE FEE AS ROYALTY. THE ENROLMENT OF STUD ENT SHALL BE SUFFICIENT CONSIDERATION FOR ROYALTY I.E. AS SOON AS THE STUDENT IS ENROLLED THE ROYALTY SHALL FALL DUE IRRESPECTIVE OF THE REALIZATION OF FEES. B) THE ROYALTY SHALL BE CHARGED ON THE GROSS COURSE FE E I.E. WITHOUT DEDUCTING THE SCHOLARSHIP AND/OR FEE CONCES SIONS, FROM THE COURSE FEE. C) THE LICENSEE SHALL SEND A STATEMENT OF COURSE FEES FOR THE RELEVANT MONTH AND FOR THE TOTAL PERIOD FROM TH E FIRST DAY OF THE FY TO THE LAST DAY OF SUCH A MONTH IN FO RMAT PRESCRIBED BY THE LICENSOR. D) NO ROYALTY SHALL BE CHARGED ON THE APTITUDE TEST FE E, HOWEVER ALL THE EXPENSES INCURRED BY THE LICENSOR I N THIS RESPECT, SHALL BE REIMBURSED ;BY THE LICENSEE. ITA 2933/DEL/2012 PAGE 5 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI ARTICLE 5(1)(A) CLEARLY STIPULATES THAT ENROLLMENT OF STUDENT SHALL BE SUFFICIENT CONDITION FOR ROYALTY TO FALL D UE. IT FURTHER STATES THAT IT BECOMES DUE AS SOON AS THE STUDENT I S ENROLLED IRRESPECTIVE OF THE REALIZATION OF THE FEES. THE F IRST APPELLATE AUTHORITY AT PAGE 20 HELD AS FOLLOWS AS PER THE ABOVE ARTICLE OF THE AGREEMENT THE LICE NSOR IS ENTITLED TO 20% OF ROYALTY ON THE FEE CHARGEABLE FR OM ITS STUDENTS ON ENROLLMENT IRRESPECTIVE OF THE REALIZAT ION OF THE FEES BY THE LICENSEE FROM THE STUDENTS. THE RO YALTY IS PAYABLE ON ENROLLMENT OF THE STUDENTS AND NOT ON REALIZATION OF THE FEES OR INCOME. THE DISALLOWAN CE OF THE ROYALTY OF RS. 80,87,520/- ON THE PORTION OF TH E FEE WHICH WAS RECEIVED FROM THE STUDENTS ENROLLED FOR A TWO YEAR PROGRAMME AND THE SAME WAS NOT OFFERED AS INCOME DURING THE YEAR ON THE GROUND THAT IT IS AN ADVANCE AND THE INCOME ACCRUES ONLY IN THE SECOND YEAR OF THE PROGRAMME WAS NOT JUSTIFIED. THE ROYA LTY PAYMENT IS LINKED WITH THE ENROLLMENT OF THE STUDEN TS AND FEE CHARGEABLE ON SUCH ENROLLMENT. IT IS NOT L INKED WITH THE INCOME OFFERED IN THE PROFIT AND LOSS ACCO UNT. THE APPELLANT IS FOLLOWING AN ACCOUNTING PRINCIPLE ON THE BASIS OF WHICH, THE FEES RECEIVED FOR SECOND YEAR F ROM THE STUDENTS ENROLLED FOR TWO YEAR PROGRAMME WAS CARRIED FORWARD TO THE NEXT YEAR ALONG WITH ELEMENT OF EXPENSES INVOLVED IN THE ADMINISTRATION OF THE SECO ND YEAR PROGRAMME WHICH ARE SET OFF AGAINST THE CORRESPONDING INCOME ACCRUED IN THE SECOND YEAR. T HE EXPENSES INCURRED ON COURSEWARE PRINTING AND STATIONARY, PHOTO COPY EXPENSES, ADVERTISEMENT AND PUBLICITY RELATABLE TO THE SECOND YEAR PROGRAMME CARRIED FORWARD TO THE SECOND YEAR AND SET OFF AGAI NST THE RECEIPTS CARRIED FORWARD TO THE SECOND YEAR. THEREFORE, THE ROYALTY PAYMENT TO THE PARENT COMPAN Y CANNOT BE LINKED WITH THE ACCOUNTING POLICY FOLLOWE D BY ITA 2933/DEL/2012 PAGE 6 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI THE APPELLANT FOR ACCOUNTING THE RECEIPTS RECEIVED FROM ENROLLMENT OF STUDENTS. 10. WE FULLY AGREE WITH THESE FINDINGS. THE ITAT IN THE CASE OF CIT VS. CITY FINANCIAL CONSUMER FINANCE IND IA LTD. IN ITA NOS. 4305/DEL/2005 WHEREIN ORDER DT. 18 TH DECEMBER,2009 AT PARA 30 THE TRIBUNAL HELD AS FOLLO WS 30. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED TH E RECORDS. WE FIND THAT IN THE PRESENT CASE BEFORE US THE ONLY CASE MADE OUT BY THE ASSESSING OFFICER IS THAT THE ASSESSEE H AS BEEN FINANCING THE HIRE PURCHASE OF VEHICLES AND HOMES E TC. AND THE PERIOD OF SUCH FINANCING IS FOR A CERTAIN PERIOD GO ING BEYOND THE ASSESSMENT YEAR. HENCE, ON THE PREMISE THAT THE PE RIOD OF FINANCING IS FOR CERTAIN NUMBER OF YEARS, THE ASSES SING OFFICER IS OF THE OPINION THAT THE AMOUNT SPENT ON THE DIRECT SELLING AGENTS COMMISSION AND STAMPING FEE SHOULD ALSO BE SPREAD ACCORDINGLY. AS SUCH WE ACCEPT THE LD.COUNSEL OF THE ASSESSEES CONTENTION THAT THERE IS NO ISSUE BEFORE US TO WHETHER THERE IS A NEXUS BETWEEN AMOUNT PAID AS COM MISSION AND THE DISBURSEMENT OF LOAN IN THE CONCERNED YEAR. HENCE, THE RELIANCE OF THE DR ON THE ABOVE SAID TRIBUNAL DECIS ION IS NOT APPLICABLE. 30.1. NOW IN THIS CASE, WE FIND THAT THE EXPENDITUR E HAS ACTUALLY BEEN INCURRED ;BY THE ASSESSEE IN THE IMPU GNED FINANCIAL YEARS. THE COMMISSION BECOME DUE AND PAY ABLE TO THE AGENTS AS SOON AS THE BUSINESS IS PROCURED BY T HEM. UNDER NO CIRCUMSTANCES, THE AMOUNT IS LIABLE TO BE RETURN ED TO THE ASSESSEE. IT IS ALSO EVIDENT FROM THE DOCUMENTS RE GARDING ASSESSING OFFICERS ENQUIRY AND ASSESSEES RESPONSE THAT ASSESSING OFFICER HAS DULY EXAMINED THE ASPECT AND FOUND THAT IN THE CURRENT PERIOD THE AMOUNT PAID AS COMMISSION IS NOT AT ALL LINKED WITH THE LOAN DISBURSEMENT DURING THE YEAR. IT IS ALSO EVIDENT THAT AMOUNT PAID AS COMMISSION IN A PARTIC ULAR YEAR CAN IN NOT WAY BE CLAIMED AS REFUND BY THE ASSESSEE UNDER ANY ITA 2933/DEL/2012 PAGE 7 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI CIRCUMSTANCES, EVEN IF THE AMOUNT FINANCED IS FORFE ITED. WE ALSO FIND FROM THE ORDERS OF THE AUTHORITIES BELOW AND I N THE WRITTEN SUBMISSION FILED BY THE ASSESSEE BEFORE THEM THAT N EITHER OF THE AUTHORITIES BELOW HAVE DISPUTED EITHER TO NATURE OF SERVICES RENDERED BY AGENTS OR HOW THE LIABILITY TO PAY THE COMMISSION IS COMPUTED. IT HAS ALSO NOT DISPUTED THAT HOW THE BR OKERAGE IS PAYABLE AND IS LINKED TO WHAT. THE ONLY CASE MADE OUT BY THE REVENUE IS THAT EXPENDITURE SHOULD BE SPREAD OVER A CERTAIN PERIOD OF TIME. IN OUR OPINION, THERE IS NO COGENC Y IN THE CASE MADE OUT BY THE REVENUE. IT IS AN ACCEPTED POSITIO N THAT ASSESSEES TREATMENT IN ITS ACCOUNTING BOOKS IS NOT DETERMINATIVE OF THE ACTUAL NATURE OF THE TRANSACTI ON. IT IS ALSO ADMITTED THAT THERE IS NEXUS BETWEEN THE EXPENDITUR E AND THE ASSESSEES BUSINESS. UNDER SUCH CIRCUMSTANCES, THE RE IS NO REASON AS TO WHY THE EXPENDITURE INCURRED WOULD NOT BE ALLOWED AS A WHOLE. 11. WHILE DOING SO, THEY HAVE RELIED ON THE FOLLOW ING CASE LAWS:- CALCUTTA CO.LTD. VS. CIT 37 ITR 1 CIT VS. ASSOCIATED CEMENT CO.LTD. 172 ITR 257 EMPIRE JUTE CO.LTD. VS. CIT, 124 ITR 1 11.1. THIS DECISION OF THE ITAT HAS BEEN UPHELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CIT I FINANCIAL CONSUMER FINANCE LTD. IN ITA NO. 1820, 1974/2010 AN D 1, 5 OF 2011 DT. 30.3.2011 WHERE IT WAS HELD AS FOLLOWS: PARA 11 :- THIS COURT, THUS, EXPLAINED IN NO UNCER TAIN TERMS THAT THE NORMAL RULE ACCEPTED BY THE SUPREME COURT IN THE SAID JUDGEMENT WAS THAT THE EXPENDITURE IS T O BE ALLOWED IN THE YEAR IN WHICH IT WAS INCURRED. ONLY AT THE ITA 2933/DEL/2012 PAGE 8 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI INSTANCE OF THE ASSESSEE WHO WANTED TO SPREAD OVER, THE COURT HAD AGREED TO ALLOW THE ASSESSEE THE BENEFIT TO THE COMPANY OVER THE ENTIRE PERIOD. THE RATIO OF THIS JUDGEMENT WAS THUS SUMMARIZED IN THE FOLLOWING MANN ER:- WHAT FOLLOWS FROM THE ABOVE IS THAT NORMALLY THE ORDINARY RULE IS TO BE APPLIED NAMELY, REVENUE EXPENDITURE INCURRED IN A PARTICULAR YEAR IS TO BE ALLOWED IN THAT YEAR. THUS, IF THE APPELLANT CLAIM S THAT EXPENDITURE IN THAT YEAR, THE IT DEPARTMENT CANNOT DENY THE SAME. HOWEVER, IN THOSE CASES WHERE THE APPELLANT HIMSELF WANTS TO SPREAD THE EXPENDITURE OVER A PERIOD OF ENSURING YEARS, IT CAN BE ALLOWED ONLY IF THE PRINCIPAL OF MATCHING CONCEPT IS SATISFIED, WHICH UP TO NOW HAS BEEN RESTRICTED TO THE CASE OF DEBENTURES. PARA 15:- AS PER THE ASSESSING OFFICER, THE ASSESS EE HAD BEEN FINANCING THE HIRE PURCHASE OF VEHICLES AND HO MES ETC. AND THE PERIOD OF SUCH FINANCING WERE RANGING FROM LESS THAN ONE YEAR TO UPTO 5 YEARS. ON SUCH TRANSACTIONS, DIRECT SELLING EXPENSES, STAMPING FEE AND COMMISSION PAID TO THE SELLING AGENTS COULD NOT BE TREATED AS EXPENSE RELATING TO THE YEAR IN WHICH TH E TRANSACTION TOOK PLACE AS THE PERIOD OF FINANCING W AS NORMALLY MORE THAN ONE YEAR. ON THIS PREMISE, THE ASSESSING OFFICER TOOK THE VIEW THAT THESE EXPENSES COULD NOT BE TERMED AS HAVING THE CHARGEABILITY IN WHICH THEY WERE INCURRED. HE TOOK AVERAGE OF THREE YEARS FOR SUCH AGREEMENTS AND SPREAD THE EXPENSES OVER A PERI OD THREE YEARS THEREBY ALLOWING 1/3 RD EXPENDITURE INCURRED IN THAT PARTICULAR YEAR. THE MATTER WAS TAKEN UP I N APPEAL AND BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE QUESTIONED THE AFORESAID APPROACH OF THE ASSESSING OFFICER BY CONTENDING THA T IN THE COURSE OF ITS BUSINESS, THE ASSESSEE ENTERS IN THE LOAN AGREEMENTS OF HIRE PURCHASE WHICH AGREEMENTS ARE REQUIRED TO BE STAMPED IN ACCORDANCE WITH THE PROVI SIONS OF INDIAN STAMPS ACT. THE STAMP DUTY PAID BY THE ITA 2933/DEL/2012 PAGE 9 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI ASSESSEE IS DEBITED TO AGREEMENT REVENUE EXPENDITUR E. THIS ENTIRE PROCESS OF GETTING STAMPED THE AGREEMEN TS HAD BEEN OUTSOURCED BY THE ASSESSEE TO THE CONTRACT PROCESSING ASSOCIATES (CPA) AND WHO ARE PAID REMUNERATION AS WELL. THEREFORE, THE EXPENSE TOWAR DS STAMPING AS WELL AS COMMISSION PAID TO THE AGENTS I S DEBITED IN WHOLE IN THE YEAR IN WHICH IT IS INCURRE D AND COULD NOT BE TREATED AS ADVERTISEMENT EXPENSE. PARA 16: THE COMMISSIONER OF INCOME TAX (APPEALS) WAS UNIMPRESSED WITH THIS ARGUMENT AND FOUND THAT THE ASSESSEE WAS SPREADING OVER THE INCOME DURING THE NUMBER OF YEARS THAT THE FINANCING IS SPREAD O VER AND, THEREFORE, EXPENDITURE ON THE AFORESAID COUNTS WAS REQUIRED TO BE SPREAD OVER. THE ITAT, HOWEVER, DENOUNCED THIS REASONING OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND ACCEPTED THE PLEA THAT THE EXPENDITURE INCURRED HAD NOTHING TO DO WITH THE PER IOD OF LENGTH OF TIME AND HAD NO LINKAGE, WHATSOEVER, T O ANY PERIOD, THE ENTIRE EXPENDITURE WAS ALLOWABLE IN THE YEAR IN WHICH IT WAS INCURRED. THE TRIBUNAL HA S FURTHER HELD THAT THE EXPENDITURE IS INCURRED ONCE FOR ALL IN THE FORM OF STAMPING DUTY AS WELL AS COMMISS ION PAID TO THE DIRECT SELLING AGENTS, FOR THEIR SERVIC ES IN SOURCING HIRE IN THE YEAR IN WHICH THE LOAN IS DISBURSED, IT IS TO BE ALLOWED AS BUSINESS EXPENDIT URE. THE TRIBUNAL, TO ARRIVE AT THIS FINDING TOOK INTO CONSIDERATION THE CLAUSES OF THE AGREEMENT RELATING TO MODE OF PAYMENT OF CONSIDERATION AS WELL AS TERMINATION CLAUSE IN THE AGREEMENT. THUS, AS TH E ENTIRE EXPENDITURE WAS INCURRED WHICH ADMITTEDLY HAVE NEXUS WITH THE BUSINESS OF THE ASSESSEE, IT W AS TREATED AS BUSINESS EXPENDITURE ALLOWABLE UNDER SECTION 37 OF THE INCOME TAX ACT, 1961. THE TRIBUN AL ALSO RELIED UPON THE JUDGEMENT OF SC IN CALCUTTA CO.LTD. VS. CIT, 37 ITR 1; CIT VS. ASSOCIATED CEMEN T CO.LTD. 172 ITR 257, EMPIRE JUTE CO.LTD. VS CIT 124 ITA 2933/DEL/2012 PAGE 10 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI ITR 01 AND JUDGEMENT OF THIS COURT IN CIT VS.SALORA INTERNATIONAL LTD. 308 ITR 199. PARA 17: WE ARE IN AGREEMENT WITH THE AFORESAID VIE W TAKEN BY THE TRIBUNAL AND HOLD THAT THE EXPENDITURE WAS REQUIRED TO BE ALLOWED AS REVENUE/BUSINESS EXPENDIT URE INCURRED IN THAT YEAR. THE REASONS GIVEN BY US WHI LE ALLOWING THE ADVERTISEMENT AND PUBLICITY EXPENDITUR E WILL APPLY HERE AS WELL. 12. THE FIRST APPELLATE AUTHORITY , IN OUR CONSIDE RED OPINION, HAS RIGHTLY APPLIED THE RATIO OF THIS JUD GEMENT OF THE JURISDICTIONAL HIGH COURT TO THE FACTS OF THIS CASE . THE FIRST APPELLATE AUTHORITY ALSO NOTED THAT IN THE SUBSEQ UENT AY I.E. 2008-09, NO DISALLOWANCE HAS BEEN MADE. THUS EVEN ON THE GROUND OF CONSISTENCY, WE AGREE WITH THE LD.CIT(A). HENCE WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THIS APP EAL OF THE REVENUE. 15. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH FEBRUARY, 2013. SD/- SD/- (RAJPAL YADAV) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 13 TH FEB., 2013. *MANGA ITA 2933/DEL/2012 PAGE 11 OF 11 ASSESSMENT YEAR: 2007-08 M/S FITJEE HYD.CLASSES LTD. NEW DELHI COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR 1. DATE OF DICTATION: 2. DRAFT PLACED BEFORE THE AUTHOR ON: 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON: