DCIT, Circle-16(1), New Delhi V. Magic Bricks Reality Services Ltd, New Delhi

ITA 6677/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9437 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2016-2017
• Appeal Filed On: 08-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA No. 6677/Del/2019 (Assessment Year : 2016-17) DCIT Circle – 16(1) New Delhi PAN No. AAICM 8228 P Vs. Magic Bricks Reality Services Ltd. FC-6, Gautam Budh Nagar DCPF, Sector – 16A, Noida, Uttar Pradesh-201 301 (APPELLANT) (RESPONDENT) Assessee by Shri Mukesh Gupta, C.A. Ms. Neha Gupta, C.A. Revenue by Ms. Rinku Singh, CIT-D.R. Date of hearing: 01.09.2022 Date of Pronouncement: 07.09.2022 ORDER PER ANIL CHATURVEDI, AM: The present appeal filed by the Revenue is directed against the order dated 17.06.2018 of the Commissioner of Income Tax (Appeals)-6, Delhi relating to Assessment Year 2016-17. 2. Brief facts of the case as culled out from the material on record are as under :- 2 3. Assessee is a company stated to be engaged in the business of development and maintenance of electronic/digital portal dedicated to real estate properties. Assessee electronically filed its return of income for A.Y. 2016-17 on 16.10.2016 declaring loss of Rs.76,04,00,143/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 21.12.2018 and the total income was determined at Rs.44,18,56,800/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 17.06.2018 in Appeal No.CIT(A), Delhi-6/10342/2018-19 granted substantial relief to the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds: 1. “Weather on the facts and circumstances of the case, the Ld CIT(A) is justified in deleting the addition of Rs.31,85,43,339/- made on account of disallowance of 50% of the advertisement and business promotion expenses particularly in view of the fact that Ld CIT(A) has herself accepted that the benefit arising out of expenditure are enduring in nature.” 2. “That the appellant craves leave to add, amend, alter or forgo any grounds of appeal either before or at the time of hearing of the appeal.” 4. During the course of assessment proceedings, AO noticed that assessee had claimed Rs.84,94,48,903/- on account of advertisement for the purpose of brand building, maintaining customer base and enhancing the revenue. The assessee was asked to explain as to why the expenses should not be capitalized to which the assessee made the detailed submissions which are noted by AO in the order. AO did not agree with the contention of 3 the assessee. He thereafter for the reasons noted in the order held that 50% of the expenditure to be capital in nature and accordingly disallowed Rs.31,85,43,339/-. 5. Aggrieved by the order of AO, assessee carried the matter before CIT(A). CIT(A) following the order in assessee’s own case for A.Y. 2015-16 held that the advertisement, publicity and sales promotions was necessitated for business purpose and could not be termed to be in capital field. She accordingly deleted the addition. Aggrieved by the order of CIT(A), Revenue is now before us. 6. Before us, Learned DR supported the order of lower authorities. 7. Learned AR on the other hand reiterated the submissions made before the AO and CIT(A) and further submitted that on identical facts, in assessee’s own case for A.Y. 2015-16, the Tribunal vide order dated 29.08.2022 has dismissed the appeal of Revenue. He further submitted that since there are no change in the facts in the year under consideration and that of earlier years, Ground of Revenue needs to be dismissed. 8. We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to the disallowance of 50% of advertisement 4 expenses that was disallowed by AO but deleted by CIT(A). We find that identical issue in the case of assessee also arose in A.Y. 2015-16 and the Co-ordinate Bench of Tribunal vide order dated 29.08.2022 in ITA No.6295/Del/2018 held the expenditure incurred on advertisement and business promotion to be of revenue in nature and not capital expenditure. Before us, Revenue has not placed any distinguishing feature in the facts of the case for the year under consideration and that of earlier year. We therefore find no reason to interfere with the order of CIT(A). Thus ground of Revenue is dismissed. 9. In the result, appeal of Revenue is dismissed. Order pronounced in the open court on 07.09.2022 Sd/- Sd/- (CHALLA NAGENDRA PRASAD) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 07.09.2022 PY* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI