ACIT 8(1), MUMBAI V. D DAMAS JEWELLERY INDIA P.LD, MUMBAI

ITA 87/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70621 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 31-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 05-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Assessee Lawyers: MRS ARATI VISSANJI
• Keywords: Depreciation; Cost of acquisition
• Section: 37(1)

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI .. , ! ' # , $ ', % BEFORE SHRI R.S.SYAL, AM AND SHRI VIVEK VARMA, JM ITA NOS.87 & 88/MUM/2012 ASST.YEARS 2007-2008 & 2008-2009 THE JOINT COMMISSIONER OF INCOME-TAX (OSD), RANGE 8(1) MUMBAI. M/S.DDAMAS JEWELLERY INDIA PVT.LTD. PLOT NO.18, 1 ST FLOOR, ROAD NO.9M MIDC INDUSTRIAL ESTATE ANDHERI (EAST), MUMBAI 400 093. PAN : AABCD8519M. ( &' / // / APPELLANT) ) ) ) ) / VS. ( *+&'/ RESPONDENT) &' , ,, , - - - - / APPELLANT BY : SHRI KISHAN VYAS *+&' , - , - , - , - / RESPONDENT BY : MRS.ARATI VISSANJI ) , .! / / / / DATE OF HEARING : 31.07.2013 /01 , .! / DATE OF PRONOUNCEMENT : 02.08.2013 ' 2 ' 2 ' 2 ' 2 / / / / O R D E R PER R.S.SYAL (AM) : THESE TWO APPEALS BY THE REVENUE RELATING TO ASSESS MENT YEARS 2007-2008 AND 2008-2009 INVOLVE ONLY ISSUE ABOUT T HE DELETION OF DISALLOWANCE ON ACCOUNT OF BRAND PROMOTION EXPENSES . 2. BRIEFLY STATED THE FACTS FOR ASSESSMENT YEAR 200 7-2008 ARE THAT THE ASSESSEE CLAIMED DEDUCTION FOR BRAND PROMOTION EXPENSES OF ` 5,22,41,363. ON THE PERUSAL OF DETAILS, IT WAS OBSE RVED BY THE ASSESSING OFFICER THAT THE ASSESSEE AVAILED SERVICE S OF VARIOUS CELEBRITIES FOR CREATING THE IMPACT OF VARIOUS BRAN DS THROUGH VARIOUS MEDIAS, NEWS PAPERS, MAGAZINES, TELEVISIONS CHANNEL S ETC. ON BEING CALLED UPON TO EXPLAIN AS TO WHY CERTAIN PART OF BR AND PROMOTION ITA NO.87 & 88/MUM/2012. M/S.DDAMAS JEWELLERY INDIA PVT.LTD. 2 EXPENSES BE NOT DISALLOWED, THE ASSESSEE STATED THE REASONS WHICH HAVE BEEN REPRODUCED IN THE ASSESSMENT ORDER. FROM PARA 3.3. OF THE ASSESSMENT ORDER, IT CAN BE SEEN THAT THE ASSESSING OFFICER, FOLLOWING HIS VIEW TAKEN FOR ASSESSMENT YEAR 2006-2007, DISAL LOWED 20% OF TOTAL EXPENDITURE UNDER THIS HEAD BY TREATING IT AS COST OF ACQUISITION OF BUSINESS OR COMMERCIAL RIGHT AND ALLOWED DEPRECI ATION AT THE RATE OF 25% ON THIS AMOUNT. THE LEARNED CIT(A), FOLLOWIN G THE VIEW TAKEN IN EARLIER YEARS BY THE TRIBUNAL IN ASSESSEE S OWN CASE, DELETED THE DISALLOWANCE. FACTUAL MATRIX FOR THE A.Y.2008-0 9 IS ALSO SIMILAR BUT FOR THE VARIATION IN THE AMOUNT OF DISALLOWANCE . 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT TH E ADDITION MADE BY THE ASSESSING OFFICER IS BASED ON THE VIEW TAKEN BY HIM FOR ASSESSMENT YEAR 2006-2007. WHEN THE MATTER FINALLY C AME UP BEFORE THE TRIBUNAL FOR THE SAID ASSESSMENT YEAR 2006-2007 , IT, VIDE ORDER DATED 10.04.2013 IN ITA NO.2786/MUM/2011, UPHELD TH E LEARNED CIT(A)S ACTION IN HOLDING THAT THE ENTIRE AMOUNT I S DEDUCTIBLE U/S 37(1) AND NOT 80% OF THE EXPENSES AS HAS BEEN DONE BY THE A.O. A COPY OF SAID ORDER HAS BEEN PLACED ON RECORD. THE L EARNED DEPARTMENTAL REPRESENTATIVE WAS FAIR ENOUGH TO CONC EDE THAT THE FACTS AND CIRCUMSTANCES OF THE INSTANT APPEALS ARE MUTATIS MUTANDIS SIMILAR TO THOSE FOR ASSESSMENT YEAR 2006-2007. RES PECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE IMPUGNED ORD ERS ON THIS ISSUE FOR BOTH THE YEARS. HOWEVER, IT IS MADE CLEAR THAT WHILE ALLOWING THE DEDUCTION FOR THE FULL AMOUNT CLAIMED AS `BRAND PRO MOTION ITA NO.87 & 88/MUM/2012. M/S.DDAMAS JEWELLERY INDIA PVT.LTD. 3 EXPENSES, THE AO WILL HAVE TO WITHDRAW THE AMOUNT OF DEPRECIATION ALLOWED BY HIM ON CAPITALIZING THE AMOUNT DISALLOW ED EARLIER. 4. 3 .4 $) 3. , 5 . , 6. 78 9 IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED ON THIS 02 ND DAY OF AUGUST, 2013. ' 2 , /01 :')4 0 , ; SD/- SD/- (VIVEK VARMA) (R.S.SYAL) $ ' $ ' $ ' $ ' / JUDICIAL MEMBER ! ' ! ' ! ' ! ' / ACCOUNTANT MEMBER MUMBAI ; :') DATED : 02 ND AUGUST, 2013. DEVDAS* ' 2 , *$.<# = #1. ' 2 , *$.<# = #1. ' 2 , *$.<# = #1. ' 2 , *$.<# = #1./ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. *+&' / THE RESPONDENT. 3. > () / THE CIT, THANE. 4. > / CIT(A) 16, MUMBAI. 5. #A; *$.$) , , / DR, ITAT, MUMBAI 6. ; B / GUARD FILE. ' 2) ' 2) ' 2) ' 2) / BY ORDER, +#. *$. //TRUE COPY// C C C C/ // /7 6 7 6 7 6 7 6 ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI