Refex Industries Ltd., CHENNAI V. DCIT, CHENNAI

ITA 972/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81181 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2014
• Court: TRIBUNAL
• Department Lawyers: DURGESH SUMROTT
• Assessee Lawyers: M NARAYANAN
• Keywords: Audit objection; Revenue expenditure; Capital expenditure
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 972/MDS/2014 / ASSESSMENT YEAR : 2009-10 M/S.REFEX INDUSTRIES LTD., (FORMERLY REFEX REFRIGERANTS LTD) NO.20, MOOKER NALLAMUTHU STREET, GEORGE TOWN, CHENNAI 600 001 [PAN: AACCR 2495 P] ( !% /APPELLANT) VS DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-V(3), CHENNAI ( &'!% /RESPONDENT) / APPELLANT BY : SHRI M. NARAYANAN, / RESPONDENT BY : SHRI DURGESH SUMROTT, CIT / DATE OF HEARING : 09-07-2014 ! / DATE OF PRONOUNCEMENT : 09-09-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNIN G THE ORDER OF COMMISSIONER OF INCOME TAX, CHENNAI DATED 18-03-2014 PASSED U/S.263 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) RELEVANT TO THE ASSESSMENT YEAR (A Y) 2009-10. I.T.A. NO. 972/MDS/2014 2 2. THE ASSESSEE IS A MANUFACTURER OF INDUSTRIAL GAS ES. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY. 200 9-10 ON 30-09-2009 DECLARING ITS TOTAL INCOME AS ` 95,55,830/-. THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.1 43(2) OF THE ACT WAS ISSUED. DURING THE COURSE OF SCRUTINY ASSESSME NT, THE ASSESSING OFFICER MADE CERTAIN ADDITIONS/DIS-ALLOWA NCES IN THE INCOME RETURNED BY THE ASSESSEE. THE ASSESSMENT OR DER WAS PASSED ON 28-12-2011. THEREAFTER, THE COMMISSIONER OF INCOME TAX ISSUED SHOW CAUSE NOTICE U/S.263 WITH THE FOLLO WING OBSERVATIONS. 1) YOU HAVE CLAIMED DEDUCTION OF ` 1,99,13,832/- BEING BRANCH BUILDING EXPENSES WHICH ARE SHOWN UNDER DEFE RRED REVENUE EXPENSES AND HAVE BEEN WRITTEN OFF IN FULL. THE BRAND BUILDING EXPENDITURE IS CAPITAL IN NATURE AND THE ASSESSING OFFICER HAS ALLOWED THE EXPENDITURE WRONG LY. 2) IN THE STATEMENT OF INCOME, YOU HAVE DEDUCTED AN AMOUNT OF ` 34,63,022/- TOWARDS PRELIMINARY EXPENSES U/S.35D OF THE IT ACT. HOWEVER, IN THE ASSESSMENT ORDER DATED 23. 12.2010 FOR THE AY.2008-09, THE PRELIMINARYT EXPENSES WERE RESTRICTED TO ` 16,09,408/- WHEREAS YOU HAVE CLAIMED DEDUCTION OF ` 34,63,022/-. THE ASSESSING OFFICER HAS WRONGLY ALL OWED EXCESS DEDUCTION IN ` 18,53,614/-. I.T.A. NO. 972/MDS/2014 3 IN VIEW OF THE ABOVE DISCUSSION, THE ASSESSMENT ORD ER DATED 28.12.2011 PASSED BY THE ASSESSING OFFICER FOR THE AY.2009- 10 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. PLEASE STATE WHY THE BRAND BUILDING EXPENSES OF ` 1,19,13,382/- MAY NOT BE DISALLOWED BEING CAPITAL EXPENDITURE. ALSO STATE WHY THE EXCESS DEDUCTION C LAIM TO THE EXTENT OF ` 18,53,614/- MADE U/S.35D OF THE IT ACT MAY NOT BE DISALLOWED. IN REPLY TO SHOW CAUSE NOTICE, THE ASSESSEE FILED W RITTEN SUBMISSIONS. THE ASSESSING OFFICER DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, QUESTIONED ADVERTISEMENT EX PENDITURE OF ` 1,99,13,832/- CLAIMED BY THE ASSESSEE AS REVENUE EXPENDITURE. THE ASSESSING OFFICER AFTER CONSIDER ING THE WRITTEN SUBMISSIONS OF THE ASSESSEE ACCEPTED THE SAME AND A LLOWED THE ADVERTISEMENT EXPENDITURE AS REVENUE EXPENDITURE IN FULL. NOT SATISFIED WITH THE REPLY OF ASSESSEE, THE COMMISSIO NER OF INCOME TAX VIDE IMPUGNED ORDER DIRECTED THE ASSESSING OFFI CER TO DIS- ALLOW EXPENDITURE OF ` 1,99,13,832/- AND TREAT THE SAME AS CAPITAL IN NATURE. AGGRIEVED BY THE ORDER OF COMMISSIONER OF INCOME T AX , THE ASSESSEE HAS COME IN APPEAL BEFORE THE TRIBUNAL. I.T.A. NO. 972/MDS/2014 4 3. SHRI M.NARAYANAN, APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT THE ADVERTISEMENT EXPENDITURE QUESTI ONED BY THE COMMISSIONER OF INCOME TAX WAS CONSIDERED BY ASSESS ING OFFICER DURING SCRUTINY ASSESSMENT. NOW, THE COMMISSIONER OF INCOME TAX HAS RAISED THIS QUESTION ONLY ON THE BASIS OF A UDIT OBJECTION. THE AR PLACED ON RECORD A COPY OF AUDIT OBJECTION M ADE BY THE OFFICE OF THE DIRECTORATE GENERAL OF AUDIT (CENTRAL ). THE LD.AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX HAS N OT APPLIED HIS INDEPENDENT MIND ON THE ISSUE AND HAS MERELY TR ANSPLANTED THE AUDIT OBJECTION WHILE ISSUING NOTICE U/S.263 OF THE ACT. THE LD.AR OF THE ASSESSEE ALSO PLACED ON RECORD A COPY OF THE LETTER DT.27-12-2011 FILED BEFORE THE ASSESSING OFFICER, G IVING REASONS AS TO WHY ADVERTISEMENT EXPENDITURE INCURRED DURING FI NANCIAL YEAR (FY) 2008-09 WAS CONSIDERED AS REVENUE EXPENDITURE . THE LD.AR FURTHER CONTENDED THAT THE VIEW TAKEN BY THE COMMISSIONER OF INCOME TAX IS MERELY A DIFFERENT VIEW WHICH HE C ANNOT SUBSTITUTE OVER A POSSIBLE VIEW TAKEN BY THE ASSESS ING OFFICER U/S.263 OF THE ACT. IN ORDER TO SUPPORT HIS CONTEN TIONS, THE LD.AR PLACED RELIANCE ON THE DECISION OF CHANDIGARH BENCH OF THE TRIBUNAL IN ITA NO.690/CHD/2010 IN THE CASE OF SH.JASWINDER SINGH VS. CIT DECIDED ON 09-03-2012. I.T.A. NO. 972/MDS/2014 5 4. ON THE OTHER HAND, SHRI DURGESH SUMROTT, APPEARI NG ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE IMPU GNED ORDER. THE LD.DR CONTENDED THAT THERE IS NO BAR IN INVOKIN G JURISDICTION U/S.263 ON THE BASIS OF AUDIT OBJECTION. IN SUPPOR T OF HIS SUBMISSIONS, THE LD.DR PLACED RELIANCE ON THE DECIS ION OF THE HON'BLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. B&A PLANTATION AND INDUSTRIES LTD., REPORTED AS 346 ITR 43. THE LD.DR FURTHER CONTENDED THAT THE ASSESSEE HAD INCURRED EXPENDITUR E TOWARDS BRAND BUILDING. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SOUTH INDIA SHIPPING CORPORATION LTD., REPORTED AS 233 ITR 546 (MAD) HAS HELD EXPENDITURE ON BRAND BUILDING AS CAPITAL EXPENDITURE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO EX AMINED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISIONS O N WHICH BOTH SIDES HAVE PLACED RELIANCE. THE REASONS FOR INVOK ING REVISIONAL JURISDICTION U/S.263 HAS ALREADY BEEN RE-PRODUCED H EREIN ABOVE. THE CONTENTION OF ASSESSEE IS THAT REVISIONAL JURIS DICTION HAS BEEN INVOKED MERELY ON THE BASIS OF AUDIT OBJECTION. TH E COMMISSIONER OF INCOME TAX HAS NOT INDEPENDENTLY ANALYSED THE IS SUE AND HAS MERELY REPRODUCED THE AUDIT OBJECTIONS. THE AR OF THE ASSESSEE I.T.A. NO. 972/MDS/2014 6 HAS PLACED ON RECORD OBJECTION RAISED BY AUDIT OFFI CER. THE RELEVANT EXTRACT OF THE AUDIT OBJECTION RAISED BY T HE AUDITORS ARE RE- PRODUCED AS UNDER: THE ASSESSEE FILED THE RETURN OF INCOME FOR THE AY .2009-10 ON 30/09/09 ADMITTING AN INCOME OF RS.95,55,830. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AN D ASSESSMENT WAS COMPLETED ON 28/12/11 DETERMINING AN INCOME OF RS.3,96,48,050. IT IS SEEN FROM THE STATEMENT OF INCOME, THE ASSESS EE HAD DEDUCTED A SUM OF RS.1,99,13,832 BEING BRAND BUILDI NG EXPENSES (SHOWN UNDER DEFERRED REVENUE EXPENSES) WR ITTEN OFF IN FULL. THE ABOVE BRAND BUILDING EXPENDITURE IS CAPITAL EXPENDITURE IN NATURE. HENCE, THE ABOVE BRANCH BUI LDING EXPENDITURE MAY BE DISALLOWED AND ADDED BACK TO ASS ESSED INCOME. FURTHER, IN THE STATEMENT OF INCOME, THE ASSESSEE H AD DEDUCTED AN AMOUNT OF RS.34,63,022 TOWARDS PRELIMIN ARY EXPENSES U/S.35D OF IT ACT. HOWEVER, IN THE ASSESS MENT ORDER DATED 23.12.10 RELATED TO AY. 08-09, THE ABOV E PRELIMINARY EXPENSES U/S.35D WAS RESTRICTED TO RS.1 6,09,408. THE REASON FOR THE ABOVE RESTRICTION IS THAT THE SH ARE PREMIUM AMOUNT ALSO INCLUDED IN THE QUANTIFIED AMOUNT AND W HICH WOULD NOT QUALIFY FOR QUANTIFICATION OF ELIGIBLE AM OUNT FOR PURPOSE OF DEDUCTION U/S.35D. THUS, THE ASSESSEE I S ELIGIBLE FOR DEDUCTION U/S.35D ONLY TO THE EXTENT OF RS. 16,09,408. HOWEVER, THE ASSESSEE HAS CLAIMED A DEDUCTION OF RS. 34,63,022/-. THEREFORE, THE NET DISALLOWANCE ON TH IS COUNT I.T.A. NO. 972/MDS/2014 7 IS ARRIVED AT RS.18,53,614 (34,63,022 16,09,408) AND THIS MAY BE ADDED BACK TO ASSESSED INCOME. 6. A READING OF THE PROVISIONS OF SECTION 263 MAKE IT UNAMBIGUOUSLY CLEAR THAT TWO CONDITIONS MUST BE SAT ISFIED BEFORE THE COMMISSIONER OF INCOME TAX CAN EXERCISE REVISIO NAL JURISDICTION CONFERRED ON HIM. FIRSTLY, THE ORDER PASSED BY THE ASSESSING OFFICER MUST BE ERRONEOUS AND SECONDLY, T HE ERROR MUST BE SUCH THAT IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE. IF EITHER OF THE TWO PRE-CONDITIONS IS ABSENT, THE COMMISSIONER OF INCOME TAX CANNOT INVOKE THE PROVISIONS OF SECTION 263 UNDER T HE ACT. IT IS A WELL SETTLED LAW, THAT EVERY LOSS OF REVEN UE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER WH ICH IS NOT ERRONEOUS CANNOT BE TREATED AS PREJUDICIAL TO THE I NTEREST OF THE REVENUE. WHERE TWO VIEWS ARE POSSIBLE AND THE ASSE SSING OFFICER HAS TAKEN A VIEW RESULTING IN LOSS OF REVENUE, IT C ANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST O F THE REVENUE, UNLESS THE VIEW OF ASSESSING OFFICER IS CONTRARY TO LAW. A PERUSAL OF RECORDS SHOW THAT THE ASSESSING OFFICE R DURING THE COURSE OF ASSESSMENT PROCEEDINGS, EXAMINED THE CLAIM OF ASSESSEE WITH RESPECT TO EXPENDITURE ON ADVERTISEME NT. THE ASSESSEE VIDE WRITTEN SUBMISSIONS DT.27-12-2011 EXP LAINED THE I.T.A. NO. 972/MDS/2014 8 REASONS FOR TREATING ADVERTISEMENT EXPENDITURE AS REVENUE EXPENDITURE. THE ASSESSING OFFICER AFTER APPLYING HIS MIND, ALLOWED THE ADVERTISEMENT EXPENDITURE AS CLAIMED BY THE ASSESSEE. 7. IN THE DETAILED REPLY FILED ON 27.12.2011, IN PA RAGRAPH 6, THE ASSESSEE HAS EXPLAINED THE CHARACTERISTICS OF THE A DVERTISEMENT EXPENDITURE AMOUNTING TO ` 1,99,13,832/-. IN FACT, THE ENTIRE EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE TOWAR DS PROMOTING ITS BUSINESS; AS SUCH, IT IS NOT POSSIBLE FOR SURE TO HOLD THAT THE SAID EXPENDITURE WAS IN THE NATURE OF A BRAND BUILDING E XPENDITURE. THE ADVERTISEMENT EXPENDITURE BEING MUCH IN VOLUME AND ALSO INCURRED IN THE INITIAL YEARS OF BUSINESS, THE ASSE SSEE ON THE PRUDENT PRINCIPLES OF ACCOUNTANCY, OPTED TO TREAT T HE SAID EXPENDITURE AS DEFERRED REVENUE EXPENDITURE AND TO WRITE OFF THE SAID AMOUNT IN EQUAL INSTALMENTS FOR FIVE ASSESSMEN T YEARS. IN THAT WAY, IN ITS REGULAR ACCOUNTS, THE ASSESSEE HAS WRITTEN OFF A SUM OF ` 39,82,776/-. THIS HAS BEEN DONE FOR THE PURPOSE OF TRUE AND FAIR VIEW OF THE STATEMENT OF ACCOUNTS OF THE A SSESSEE COMPANY. THE COMPANIES ACT PERMITS A COMPANY TO TR EAT ITS EXPENDITURE, IF SO REQUIRED, AS DEFERRED REVENUE EX PENDITURE. BUT CONTRARY TO THAT, THE INCOME-TAX ACT DOES NOT TREAT AN EXPENDITURE I.T.A. NO. 972/MDS/2014 9 AS A DEFERRED REVENUE EXPENDITURE, AS SUCH. AS FAR AS THE INCOME- TAX ACT IS CONCERNED, AN EXPENDITURE COULD BE EITHE R CAPITAL OR REVENUE. THEREFORE, WHILE COMPUTING TAXABLE INCOME , THE ASSESSEE CLAIMED THE ENTIRE SUM OF ` 1,99,13,832/- AS A DEDUCTION. THE ASSESSEE TREATED IT AS A REVENUE EXPENDITURE FO R THE PURPOSE OF INCOME TAXATION. THIS IS ONE OF THE ACCEPTABLE METHODS. AS THE ASSESSEE HAS INCURRED THE EXPENDITURE FOR ADVERTISE MENT PURPOSES, A VIEW IS POSSIBLE THAT THE EXPENDITURE I S NOT CAPITAL IN NATURE. IT IS, AFTER EXAMINING THESE FACTS AND CIR CUMSTANCES, THAT THE ASSESSING OFFICER HAS ALLOWED THE DEDUCTION AS CLAIMED BY THE ASSESSEE. THE VIEW TAKEN BY THE ASSESSING AUTHORIT Y IS ONE OF THE POSSIBLE VIEWS. IN THE AUDIT REPORT, THE AUDITORS HAVE POINTED OUT THAT THE ASSESSEE HAS DEDUCTED A SUM OF ` 1,99,13,832/- BEING BRAND BUILDING EXPENDITURE WRITTEN OFF IN FULL. TH E AUDITORS HAVE POINTED OUT THAT THE AMOUNT WAS SHOWN UNDER DEFERRE D REVENUE EXPENDITURE. THE AUDITORS HAVE EXPRESSED THEIR OWN VIEWS. THAT MAY BE CORRECT OR MAY NOT BE CORRECT. BUT IN THE P RESENT AUDIT NOTE, THEY HAVE NOT MENTIONED AS TO WHY THIS DEFERR ED REVENUE EXPENDITURE SHOULD BE TREATED AS A CAPITAL EXPENDIT URE. A DEFERRED REVENUE EXPENDITURE IPSO FACTO DOES NOT BECOME CAPI TAL EXPENDITURE. IT IS CALLED AS DEFERRED REVENUE EXPE NDITURE, FOR THE REASON THAT IT IS NOT A CAPITAL EXPENDITURE. THERE FORE, THE AUDIT I.T.A. NO. 972/MDS/2014 10 OBJECTION IS ITSELF OBJECTIONABLE. AN OBSERVATION IN THE AUDIT REPORT COULD BE A VALID REASON FOR THE COMMISSIONER TO EXE RCISE HIS JURISDICTION UNDER SEC.263, IF ON HIS EXAMINATION, HE FINDS THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO TH E INTERESTS OF THE REVENUE AS POINTED OUT IN THE AUDIT REPORT. W ITHOUT SUCH A FINDING AND THE AUDIT REPORT ALSO NOT BEING CLEAR O N THAT, IT IS NOT POSSIBLE TO REVISE THE ORDER OF THE ASSESSING OFFIC ER. 8. THE CONTENTS OF SHOW CAUSE NOTICE AND AUDIT REPO RT SHOW THAT THE COMMISSIONER OF INCOME TAX SOLELY ON THE B ASIS OF AUDIT OBJECTION HAS INVOKED HIS REVISIONAL POWERS U/S.263 . FROM THE IMPUGNED ORDER OR THE SHOW CAUSE NOTICE IT IS NOT M ADE OUT AS TO HOW THE ADVERTISEMENT EXPENDITURE ALLOWED AS REVEN UE EXPENDITURE IS ERRONEOUS. THE COMMISSIONER OF I NCOME TAX HAS GONE BEYOND HIS JURISDICTION IN INVOKING THE PROVIS IONS OF SECTION 263 TO SUPER-IMPOSE HIS VIEW, ON ONE OF THE POSSIBL E VIEWS TAKEN BY THE ASSESSING OFFICER IN ALLOWING THE EXPENDITUR E CLAIMED BY THE ASSESSEE. 9. THE LD.DR IN ORDER TO SUPPORT HIS SUBMISSIONS TH AT THE AUDIT OBJECTION IS NO BAR FOR INVOKING PROVISIONS OF SECT ION 263, HAS PLACED RELIANCE ON THE DECISION OF HON'BLE GAUHATI H IGH COURT IN I.T.A. NO. 972/MDS/2014 11 THE CASE OF CIT VS. B&A PLANTATION AND INDUSTRIES LTD., (SUPRA). IN THE SAID CASE, THE HON'BLE HIGH COURT HAS UPHELD THE REVISIONAL JURISDICTION EXERCISED BY THE COMMISSIONER OF INCOM E TAX FOR THE REASON, THE ASSESSING OFFICER HAD FAILED TO TAKE IN TO ACCOUNT THE FACT THAT THE ASSESSEE HAS ALREADY AVAILED THE SAME DEDUCTIONS IN EARLIER AY WHICH WAS NOT DISPUTED BY THE ASSESSEE. IT WAS NOT A CASE WHERE THE REVISIONAL AUTHORITY HAD SUBSTITUTED ITS OPINION FOR THAT OF THE ASSESSING OFFICER. THE ASSESSING OFFIC ER HAD MADE ASSESSMENT ON WRONG ASSUMPTION OF FACTS AND WITHOUT APPLICATION OF MIND. IT WAS UNDER THESE CIRCUMSTANCES THE HON' BLE COURT HAD OBSERVED THAT MERE FACT THAT THE AUDIT PARTY HAD AL SO RAISED SOME OBJECTION DO NOT AFFECT THE JURISDICTION OF THE REV ISIONAL AUTHORITY. THE FACTS OF THE CASE ON WHICH THE DR HAS PLACED RE LIANCE ARE ENTIRELY DIFFERENT FROM THE FACTS OF THE CASE IN HA ND. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS CONSIDERED THE EXPE NDITURE CLAIMED BY THE ASSESSEE AND AFTER SEEKING EXPLANATI ON, ACCEPTED THE CLAIM OF THE ASSESSEE. THE ASSESSING OFFICER H AS TAKEN FAIRLY POSSIBLE VIEW FOR TREATING THE ADVERTISEMENT EXPEND ITURE AS REVENUE EXPENDITURE. IT IS NOT A CASE WHERE THE ASSESSING OFFICER HAS PROCEEDED ON ASSUMPTIONS AND INCORRECT FACTS. THEREFORE, THE ORDER OF THE ASSESSING OFFICER CANNO T BE TERMED AS ERRONEOUS. RATHER, COMMISSIONER OF INCOME TAX WI THOUT I.T.A. NO. 972/MDS/2014 12 INDEPENDENT APPLICATION OF MIND HAS REPLICATED AUDI T OBJECTIONS IN THE SHOW CAUSE NOTICE ISSUED U/S.263 OF THE ACT. 10. THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CAS E OF SH.JASWINDER SINGH VS. CIT (SUPRA) HAS HELD THAT EXERCISE OF REVISIONAL POWER ON THE BASIS OF AUDIT OBJECTION IS NOT TENABLE IN LAW. THE CO-ORDINATE BENCH OF THE TRIBUNAL WHILE C OMING TO SUCH A CONCLUSION HAS TAKEN INTO CONSIDERATION THE DECISIO N OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SOHANA WOOLLEN MILLS REPORTED AS 296 ITR 238 AND THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF JEEWANLAL (1929) LTD., VS. ACIT REPORTED AS 108 ITR 407 (CALCUTTA). THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SOHANA WOOLLEN MILLS (SUPRA) HAS HELD THAT MERE AUDIT OBJECTION AND MERELY BECAUSE A DIFFERENT VIEW CAN B E TAKEN ARE NOT ENOUGH TO SAY THAT ORDER OF THE ASSESSING OFFIC ER IS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. 11. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE COMMISSIONER OF INCOME TAX WITHOUT EXAMINING THE RECORDS AND PROPER APPLICATION OF MIN D HAS INVOKED THE PROVISIONS OF SECTION 263 IN DISALLOWING THE AD VERTISEMENT I.T.A. NO. 972/MDS/2014 13 EXPENDITURE CLAIMED BY THE ASSESSEE. THERE IS NOTH ING ON RECORD TO SUGGEST THAT THE ORDER OF ASSESSING OFFICER IS N OT SUSTAINABLE IN LAW. WE DO NOT FIND ANY ERROR IN THE FINDINGS OF A SSESSING OFFICER IN ACCEPTING THE CLAIM OF THE ASSESSEE WITH REGARD TO TREATING ADVERTISEMENT EXPENSES AS REVENUE IN NATURE. IN VI EW OF THE ABOVE, THE IMPUGNED ORDER IS SET ASIDE AND THE APPE AL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON TUESDAY, THE 09 TH SEPTEMBER, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( ! ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) '#$ / VICE PRESIDENT % &' / JUDICIAL MEMBER (% /CHENNAI, )& /DATED: 09 TH SEPTEMBER, 2014 TNMM &* +,-, /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ./0 /CIT(A) 4. . /CIT 5. ,12 3 /DR 6. 245 /GF