PARLE AGRO PVT.LTD., MUMBAI V. ACIT., CENT.CIR.-25, MUMBAI

ITA 3372/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83650 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 20-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 27-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Assessee Lawyers: FIROZE ANDHYARUNJINA
• Keywords: Depreciation; Revenue expenditure; Capital expenditure
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . , , , BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDI CIAL MEMBER . / ITA NO. 3372/MUM./2011 ( / ASSESSMENT YEAR : 2007 08 ) PARLE AGRO PVT. LTD. WESTERN EXPRESS HIGHWAY CHAKALA ANDHERI (E), MUMBAI 400 099 .. / APPELLANT V/S ASSTT. COMMISSION ER OF INCOME TAX CIRCLE 25, AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AAACP8416G . / ITA NO. 3614/MUM./2011 ( / ASSESSMENT YEAR : 2007 08 ) ASS TT. COMMISSIONER OF INCOME TAX CIRCLE 25, AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. / APPELLANT V/S M/S. PARLE AGRO PVT. LTD. WESTERN EXPRESS HIGHWAY CHAKALA ANDHERI (E), MUMBAI 400 099 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AAACP8416G / REV E NUE BY : SMT. PARMINDER / ASSESSEE BY : SHRI FIROZE ANDHYARUNJINA / DATE OF HEARING 13 .08.2014 / DATE OF ORDE R 28.08.2014 PARLE AGRO PVT. LTD. 2 / ORDER , / PER AMIT SHUKLA , J.M. THE SE CROSS APPEALS ARE DIRECTED AGAINST THE IMPUGNED ORDER DATED 22 ND FEBRUARY 2011 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) X XX I X , MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3), OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) FOR THE ASSESSMENT YEAR 2007 08 . WE FIRST TAKE UP ASSESSEES APPEAL IN ITA NO.3372/MUM./011, VIDE WHICH FOLLOWING GROUNDS WERE RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF ASSESSING OFFICER IN DISALLOWING INTEREST TO THE EXTENT O F INTEREST FREE ADVANCES OF RS.75 , 00,000/ GIVEN TO SUBSID Y COMPAN Y M / S. PARLE SALES AND SERVICES PVT. LTD. THE APPELLANT SUBMITS THAT THERE IS NO JUSTIFICATION IN DISALLOWING INTEREST ON ADVANCES GI V EN TO SUBSIDY COMPANY AS THE APPELLANT AND SUBSID Y COMPAN Y WERE HAVING BUSINESS CONNECTION WITH EACH OTHER AND ADVANCES W AS GI V EN ON COMMERCIAL PRUDENT . THE APPELLANT PRA Y S THAT THE DISALLOWANCE BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF A SSESSING OFFICER IN DISALLOWING PRODUCT DE V ELO P MENT EX P ENSES OF RS . 3 . 49.516 / - . 2. BESIDES THIS, THE ASSESSEE, VIDE LETTER DATED 9 TH MAY 2012, HAS RAISED FOLLOWING AS ADDITIONAL GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE APPELLANT PRAYS THAT THE HON'BLE ITAT WOULD DIRECT THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S 80IB AND ACCORDINGLY SUITABLE DIRECTION MAY BE GIVEN. PARLE AGRO PVT. LTD. 3 3. INSOFAR AS THE GROUND NO.1, IS CONCERNED, THE LEARNED SENIOR COUNSEL, SHRI FIROZE ANDHYARUNJI NA , ON BEHALF OF THE ASSESSEE, SUBMITTED BEFORE US THAT HE DID NOT WISH TO PRESS THIS GROUND. CONSEQUENTLY, GROUND NO.1, RAISED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 4. BRIEF FACTS, QUA THE GROUND NO.2, ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN TH E BUSINESS OF MANUFACTURING AND SALE OF FMCG PRODUCTS LIKE FRUIT JUICE BASED DRINK S, NON ALCOHOLIC BEVERAGES, PACKAGED DRINKING WATER, CONFECTIONARY, SNACKS PRODUCTS, TRADING IN CHEMICALS, ETC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTED THAT THE ASSESSEE HAS DEBITED PRODUCT DEVELOPMENT EXPENSES WHICH WAS INCLUDED IN THE PART OF OTHER EXPENSES . IN RESPONSE TO THE SHOW CAUSE NOTICE ABOUT THE NATURE AND RATIONALE FOR INCURRING SUCH EXPENDITURE, THE ASSESSEE SUBMITTED THAT THE DEVELOPMENT OF NEW PRODUCTS IS A PART OF BUSINESS ACTIVITY , AS IMPROVEMENT IN THE EXISTING PRODUCTS ARE REQUIRED AS PER THE TRENDS OF THE MARKET SO AS TO SURVIVE IN THE TOUGH COMPETITION. THE ASSESSING OFFICER HELD THAT IN THE ABSENCE OF ANY EXACT DETAILS, SUCH EXPENDITURE CANNOT BE ALLOWED. ACCORDINGLY, HE HELD THAT SUCH EXPENDITURE CANNOT BE HELD TO BE REVENUE BUT CAPITAL IN NATURE AND, THEREFORE, HE DISALLOWED THE SAME. HOWEVER, HE ALSO ALLOWED DEPRECIATION @ 25% ON PARLE AGRO PVT. LTD. 4 SUCH CAPITAL EXPENDITURE. ACCORDINGLY, A SUM OF ` 6,44,382, WAS DISALLOWED AND DEPRECIATION OF ` 16,110 WAS ALLOWED. 5. BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE GAVE THE DETAILS OF EXPENDITURE AND SUBMITTED THAT THE PRODUC T DEVELOPMENT EXPENDITURE WERE INCURRED TO STUDY THE COMBIN ATION OF INGREDIENTS I N DIFFERENT PRODUCTS AND ALSO TO STUDY THE POSSIBLE NEW IDEAS OF THE PRODUCTS. IT DOES NOT GIVE ANY ENDURING BENEFIT TO THE ASSESSEE AS IT KEEPS ON CHANGING FROM TIME TO TIME. THESE PRODUCT DEVELOPMENT EXPENDITURES WERE INCURRED IN TH E ORDINARY COURSE OF BUSINESS EVERY YEAR , WHEREIN THE ASSESSEE IS REQUIRED TO STUDY THE PRODUCT INGREDIENTS AND FOR THE PRODUCT UPGRADE. FOLLOWING NATURE OF EXPENDITURES WHICH WERE DEBITED UNDER THE HEAD PRODUC T DEVELOPMENT EXPENDITURE WAS GIVEN BEFORE T HE LEARNED COMMISSIONER (APPEALS): PARTICULARS AMOUNT ( ` ) CASH PURCHASES ON DIFFERENT DATES OF ITEMS LIKE MILK, GINGER, MANGO PULP, APPLE CONCENTRATE, SODA, SUGAR, LEMON, ETC. 1,81,732 COLD STORAGE CHARGES PAID TO AGENCY FOR COLD STORAGE OF ABOVE ITEMS . 1,13,134 DESIGNING CHARGES OF BAILLEY PACKAGED DRINKING WATER BOTTLES . 2,30,000 CHARGES FOR DESIGNING PERFORMS AND GREEN CAPS . 1,19,516 TOTAL: 6,44,382 PARLE AGRO PVT. LTD. 5 6. OUT OF THE SAID SUM, THE LEARNED COMMISSIONER (APPEALS) HAS ALLOWED THE FIRST TWO ITEMS AND INSO FAR AS DESIGNING CHARGES OF BAILLEY PACKAGED DRINKING WATER BOTTLES AND CHANGES FOR DESIGNING PE R FORMS AND GREEN CAPS, HE TREATED THE SAME AS CAPITAL EXPENSES AS HE HELD THAT THEY H A VE ENDURING BENEFIT. 7. BEFORE US, THE LEARNED SENIOR COUNSEL SUBMITTED THAT THESE EXPENDITURES HAVE BEEN INCURRED FOR DESIGNING OF THE PACKAGED DRINKING WATER BOTTLES AND SUCH DESIGN UNDERGOES CHANGES AS PER THE MARKET TREND , ONCE IN ONE YEAR OR TWO YEARS. THE DECISION FOR CHANGING THE DESIGN OF THE BOTTLES ARE DONE AS PER THE ST RATEGIES ADOPTED BY THE COMPETITORS AND ALSO THE MARKET TREND . THERE IS NO ADVANTAGE OF ENDURING BENEFIT IN CHANGING THE DESIGN AND COLOUR OF PRODUCT AND NO NEW PRODUCT HAS BEEN LAUNCHED. SIMILARLY, CHANGES IN COLOUR OF CAPS OF THE BOTTLE FOR BEVERAGES WAS ALSO ON ACCOUNT OF GIVING A NEW LOOK TO THE PRODUCT AS PER THE TREND TO STABILISE THE PRODUCT AND ITS SALE. BY NO STRETCH OF IMAGINATION, THE SAID EXPENDITURE CAN BE SAID TO BE RESULTING I N ADVANTAGE OF ENDURING NATURE. HE FURTHER SUBMITTED THAT IN THE EA RLIER YEARS ALSO, SIMILAR KIND OF CHANGES AND EXPENDITURE WERE INCURRED WHICH HAVE BEEN ALLOWED BY THE DEPARTMENT UNDER SCRUTINY ASSESSMENT. IN SUPPORT OF HIS CONTENTION THAT SUCH EXPENDITURE INCURRED FOR THE PURPOSE OF PRODUCT DEVELOPMENT EXPENDITURE HAVE PARLE AGRO PVT. LTD. 6 BEEN TREATED TO BE REVENUE EXPENDITURE. HE RELIED UPON THE FOLLOWING DECISION: I) GLAXO SMITH KLINE CONSUMER HEALTH CARE LTD. V/S ACIT, [2007] 112 TTJ (CHD.) 94; AND II) CIT V/S INDIA VISITS DOT COM PVT. LTD., [2009] 176 TAXMAN 164 (DEL.). 8. THE LEAR NED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, STRONGLY RELIED UPON THE ORDERS OF THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS) AND SUBMITTED THAT ANY CHANGE IN PRODUC T DESIGN AND EXPENDITURE INCURRED THEREOF ONLY LIES IN CAPITAL FIELD BECAUSE IT HAS AN ENDURING BENEFIT, THEREFORE, IT HAS RIGHTLY BEEN HELD AS CAPITAL EXPENDITURE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE BEFORE US IS ON ACCOUNT OF EXPENDITURE INCURRED FOR THE DESIGNING CHARGES OF PACKAGED DRINKING WATER BOTTLE AND CHANGING OF COLOUR OF THE CAP OF THE BEVERAGES BOTTLES. THE ASSESSEES CONTENTION IS THAT THE EXPENDITURE INCURRED FOR DESIGNING OF PRODUCTS, ETC., IS REQUI RED TO BE MADE VERY FREQUENTLY I.E., IN ONE TO TWO YEARS TO STAY IN THE COMPETITIVE MARKET AND TO KEEP PACE WITH THE MARKET TRENDS. THE ASSESSEE IS INTO MANUFACTURING AND SALE OF FMCG PRODUCTS AND HAS VARIOUS COMPETITORS IN THE MARKET HAVING SIMILAR LINE O F PRODUCTS. KEEPING WITH THE MARKET TRENDS AND PACE OF CONSUMER P REFERENCES, PARLE AGRO PVT. LTD. 7 THE CHANGES IN THE DESIGN OF THE PRODUCTS AND ALSO THE QUALITY OF THE PRODUCTS IS AN ESSENTIAL PART OF MARKET STRATEGY TO AUGMENT SALE AND PROFIT. SUCH AN EXPENDITURE INCURRED FOR DESIGNING THE PRODUCT CANNOT BE HELD TO BE OF ENDURING BENEFIT. EVEN OTHERWISE ALSO, I F THE ADVANTAGE OF SUCH EXPENDITURE IS MERELY FOR AUGMENTING THE ASSESSEES TRADING / BUSINESS OPERATIONS OR TO CARRY ON THE BUSINESS MORE EFFICIENTLY F OR PROFITABILITY , LEAVING THE FIXED CAPITAL UNTOUCHED, THE EXPENDITURE WOULD GENERALLY BE ON THE REVENUE ACCOUNT , EVEN THOUGH THE ADVANTAGE MAY HAVE AN ENDURING BENEFIT FOR A BRIEF PERIOD. HERE IN THIS CASE, THE ASSESSEE HAS CHANGED THE DESIGN OF THE BOTTLE AND THE COLOUR OF THE CAP AS IS A REGULAR PHENOMENON TO BE CARRIED OUT BETWEEN ONE TO TWO YEARS WHICH CANNOT BE HELD TO BE FOR AN ENDURING BENEFIT OR MAJOR CHANGE IN THE PROFIT MAKING APPARATUS. SUCH EXPENDITURES ARE REQUIRED FOR EITHER AUGMENTING THE SALE O R TO SURVIVE IN THE MARKET UNDER ST I F F COMPETITION. THEREFORE, SUCH EXPENDITURE HAS TO BE TREATED AS REVENUE EXPENDITURE AND, ACCORDINGLY, THE DISALLOWANCE AS CONFIRMED BY THE LEARNED COMMISSIONER (APPEALS) UNDER THE HEAD PRODUCT DEVELOPMENT EXPENDITURE IS ALLOWED. ACC ORDINGLY, GROUND NO.2, IS ALLOWED. 10. REGARDING ADDITIONAL GROUND, THE LEARNED SENIOR C OUNSEL SUBMITTED BEFORE US THAT THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007 08, WAS FILED CLAIMING CARRIED FORWARD OF LOSSES , WHICH RESULTED PARLE AGRO PVT. LTD. 8 INTO NIL INCOME IN THE RETURN OF INCOME FILED. THEREFORE, THE CLAIM FOR DEDUCTION UNDER SECTION 80IB, WAS NOT SHOWN IN THE COMPUTATION OF INCOME BEFORE THE ASSESSING OFFICER. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT THE ASSESSEE IS OTHERWISE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB AND A NOT E WAS PUT IN THE COMPUTATION OF INCOME FILED ALONG WITH THE RETURN OF INCOME, DULY CERTIFIED BY THE CHARTERED ACCOUNTANT . THE ASSESSING OFFICER WHILE PASSING THE ORDER UNDER SECTION 143(3), HAS ARRIVED AT POSITIVE INCOME , MAINLY DUE TO DISALLOWANCE OF SET OF F OF CARRIED FORWARD LOSSES, HOWEVER, WHILE COMPUTING THE TAXABLE INCOME, HE IGNORED THE CLAIM OF DEDUCTION UNDER SECTION 80IB. THE REASON BEING THAT, T HE ASSESSING OFFICER IN THE ASSESSMENT YEAR 2004 05, WHILE PASSING THE ORDER UNDER SECTION 143(3), H AS ALLOCATED THE BUSINESS / DEPRECIATION LOSSES TO THE DEMERGED COMPANY. SUCH AN ORDER WAS ALSO CONFIRMED BY THE LEARNED COMMISSIONER (APPEALS) ALSO, H OWEVER, THE TRIBUNAL, IN THAT YEAR HAS ALLOWED THE ASSESSEES CLAIM CARRIED FORWARD LOSSES WHICH WAS APPORTIONED DUE TO DEMERGER. THIS ORDER OF THE TRIBUNAL IS NOW SUBJECT MATTER OF APPEAL BEFORE THE HONBLE HIGH COURT. THE LEARNED COUNSEL SUBMITTED THAT IF THE HONBLE HIGH COURT REVERSE S THE ORDER OF THE TRIBUNAL, THEN, THERE WOULD BE NO CARRIED FORWARD OF LOSSES , HENCE, WILL RESULT INTO POSITIVE INCOME AND THEN DEDUCTION UNDER SECTION 80IB HAS TO BE ALLOWED. PARLE AGRO PVT. LTD. 9 11. AFTER CONSIDERING THE RIVAL SUBMISSIONS , WE ARE OF THE OPINION THAT SUC H A PLEA IS TOO PROMPT, HOWEVER, BEING A LEGAL PLEA BASED ON STATUTORY PROVISION, WE DIRECT THE ASSESSING OFFICER THAT IN CASE, AS A RESULT OF ANY ORDER PASSED BY THE HIGH COURT , RESULTING INTO SETTING ASIDE OF THE TRIBUNAL ORDER OR DENYING THE CLAIM OF CA RRIED FORWARD OF LOSSES, THEN THE ASSESSING OFFICER WHILE COMPUTING THE POSITIVE INCOME OF THE ASSESSEE FOR THIS YEAR, SHALL EXAMINE THE CLAIM OF DEDUCTION UNDER SECTION 80IB. THUS, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STA TISTICAL PURPOSES AS PER THE OBSERVATIONS MADE ABOVE. 12. 12. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. WE NOW TAKE UP REVENUES APPEAL IN ITA NO. 3614/MUM./2011 . THE ONLY GROUND RAISED BY THE REVENUE, READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION AMOUNTING TO ` 45,58,025 MADE ON ACCOUNT OF MARKET RESEARCH EXPENSES, WITHOUT APPRECIATING THE STAND OF THE ASSESSIN G OFFICER IN CONSIDERING THE SAID EXPENDITURE AS CAPITAL EXPENDITURE INSTEAD OF REVENUE EXPENDITURE ADOPTED BY THE ASSESSEE. 13. THE ASSESSEE HAS DEBITED EXPENDITURE OF ` 45,58,025, ON ACCOUNT OF MARKET RESEARCH EXPENDITURE . THE ASSESSING OFFICER IN THE AB SENCE OF ANY PROPER EXPLANATION, HAS TREATED THE SAID EXPENDITURE AS CAPITAL PARLE AGRO PVT. LTD. 10 EXPENDITURE. HOWEVER, HE ALLOWED DEPRECIATION @ 25% ON THESE EXPENDITURES. BRIEF FACTS, RELATING TO THE CLAIM OF SUCH EXPENDITURE IS THAT, THE ASSESSEE IS IN THE BUSINESS OF FAST MOVING CONSUMER GOODS FOR WHICH THE ASSESSEE IS REQUIRED TO GET THE DATA FROM THE MARKET ABOUT THE MARKET TRENDS AND CONSUMER PREFERENCES AND TO DECIDE THE STRATEG IES WHILE DEALING WITH THE COMPETITORS IN SAME NATURE OF PRODUCTS. THESE EXPENDITURES INCLUDE COLLECTION OF DATA REQUIRED FROM THE MARKET AND SOME OTHER EXPENDITURES INCIDENTAL TO MARKET STUDY. 14. BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE SUBMITTED THAT THE MARKET RESEARCH EXPENDITURES ARE NECESSARY IN TH E LINE OF ASSESSEES BUSINESS A ND THEY ARE INCURRED IN THE ORDINARY COURSE OF BUSINESS. THE ASSESSEES DETAIL EXPLANATION BEFORE THE LEARNED COMMISSIONER (APPEALS) HAS BEEN INCORPORATED FROM PAGES 31 TO 35 OF THE APPELLATE ORDER. THE LEARNED COMMISSIONER (APPEALS) ANALYSED THE DETAILS O F EXPENDITURE INCURRED BY THE ASSESSEE IN THE MARKET RESEARCH WHICH HAVE BEEN INCORPORATED IN PAGE S 35 TO 37. FROM THESE DETAILS, HE NOTED THAT THE MARKET RESEARCH HAVE BEEN CARRIED OUT WITH REGARD TO THE EXISTING PRODUCTS SUCH AS SIMPLY IMLEE FRUT I . THE MARKET RESEARCH HAVE BEEN CARRIED OUT TO UNDERSTAND THE CONFECTIONARY CATEGORY VI Z A VIZ THE AGE GROUP OF CONSUMER S FOR INTRODUCING OTHER CONFECTIONARY APART FROM THE SIMPLY IMLEE AND FR OO T I . THE MARKET RESEARCH WERE CARRIED OUT ONLY TO STRENGTHEN THE PARLE AGRO PVT. LTD. 11 E XISTING BRAN D S AND EXPANSION OF EXISTING BUSINESS ACTIVITIES. THUS, THESE EXPENSES ARE NOTHING BUT ESSENTIAL REQUIREMENT TO RUN THE ASSESSEES BUSINESS IN THE COMPETITIVE MARKET, THEREFORE, IT IS REVENUE EXPENDITURE. 15. BEFORE US, THE LEARNED DEPARTMENTAL R EPRESENTATIVE SUBMITTED THAT THE MARKET RESEARCH ARE RESULTING INTO STRENGTHENING OF THE BRAND AND THE PRODUCT WHICH HAVE ENDURING BENEFIT, THEREFORE, IT HAS RIGHTLY BEEN HELD TO BE CAPITAL EXPENDITURE BY THE ASSESSING OFFICER. 16. THE LEARNED SENIOR C OUNSEL , ON THE OTHER HAND, SUBMITTED THAT THE MARKET RESEARCH ARE INEVITABLE FOR A FMCG WHICH REQUIRES COLLECTION OF INFORMATION AND DATA ABOUT THE CONSUMER TASTE S AND PREFERENCES , SO AS TO ENABLE THE ASSESSEE TO CATER TO THE MARKET NEEDS. THESE ARE ROUTINE EXPE NSES AND DOES NOT LEAD TO ANY CREATION OF NEW PRODUCT POWER OR NEW BRAND. THE LEARNED COMMISSIONER (APPEALS) HAS GIVEN A CATEGORICAL FINDING BASED ON THE MATERIAL PLACED ON RECORD THAT THE EXPENDITURE BASED ON MARKET RESEARCH IS WITH REGARD TO THE EXISTING PRODUCTS LIKE SIMPLY IMLEE AND FR OO T I AND, THEREFORE, IT IS NOTHING BUT REVENUE EXPENDITURE. 17. AFTER HEARING BOTH THE PARTIES AND ON A PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT THE ASSESSEE HAS INCURRED MARKET RESEARCH EXPENDITURE MAINLY ON THE EXIST ING PRODUCTS SUCH AS SIMPLY IMLEE PARLE AGRO PVT. LTD. 12 AND FR OO T I TO FIND OUT THE CONSUMER PREFERENCE S AND CHOICE OF VARIOUS AGE GROUP CONSUMERS , SO AS TO TARGET THE SALES OF THESE PRODUCTS ACCORDINGLY. THESE EXPENSES ARE INCURRED FOR CONSTANT END E AVOUR TO CARRY OUT MARKET RESEARCH WHICH IS INEVITABLE FOR FMCG INDUSTRY TO REMAIN IN COMPETITION AND ARE ROUTINE EXPENDITURE CARRIED OUT IN THE ORDINARY COURSE OF BUSINESS FOR STRENGTHENING THE EXISTING BRANDS . T HEREFORE, THE LEARNED COMMISSIONER (APPEALS) HAS RIGHTLY HELD THAT S UCH EXPENSES INCURRED ON MARKET RESEARCH IS NOTHING BUT REVENUE EXPENSES. ACCORDINGLY, THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) IS AFFIRMED AND THE DEPARTMENTS GROUND IS TREATED AS DISMISSED. 18. 18. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 19. , 19. TO SUM UP, ASSESSEES APPEAL IS PARTLY ALLOWED AND REVENUES APPEAL IS DISMISSED. 28 TH AUGUST 2014 ORDER PRONOUNCED IN THE OPEN COURT O N 28 TH AUGUST 2014 SD/ - . D. KARUNAKARA RAO ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 28 TH AUGUST 2014 PARLE AGRO PVT. LTD. 13 / COPY OF THE ORDER FORWARDED TO : (1) / THE ASSESSEE ; (2) / THE REVENUE; (3) ( ) / THE CIT(A ) ; (4) / THE C IT, MUMBAI CITY CONCERNED ; (5) , , / THE DR, ITAT, MUMBAI ; (6) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRI VATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI