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which is written off over the period of the debentures."

She thus submitted that there may be circumstances when the expenditure incurred in a particular year can be spread over a period of enduring years. More particularly, when allowing the expenditure in one year may give a distorted picture of the profits of a particular year. She bolstered this submission in the present case on the ground that the assessee on the leasing business was itself spreading the income over the years keeping in view the period covered by the lease agreement, in such circumstances, argued the learned Senior Counsel, allowing the entire expenditure in one year would give distorted picture and the „matching concept‟ of income and expenditure would clearly be attracted.

7. Mr. C.S. Aggarwal, learned Senior Counsel appearing for the assessee refuted the aforesaid submissions and sought to justify the approach of the Tribunal allowing the expenditure as revenue expenditure. His submission was that in order to allow the expenditure as revenue expenditure, the relevant factor to be seen was that the expenditure was incurred in the year in question and the same was for business purposes. The question of such an expenditure of enduring benefit would not be of any relevance, in such circumstances, having regard to the judgment of the Supreme Court in Empire Jute Co. Ltd. Vs. Commissioner of Income Tax, 124 ITR 01. He further submitted that accrual of income and incurring of expenditure were entirely two different aspects and he also submitted that „matching concept‟ would not apply in the instant case as held in Commissioner of Income Tax Vs. Industrial Finance Corporation of India Ltd. 185 Taxman 296. He further submitted that the judgment in Madras Industrial Investment Corporation Ltd.(supra) relied upon by the Revenue was duly considered and explained by this Court in the same judgment i.e. IFCI (supra).

(c) The expenditure incurred in the nature of advertisement and publicity is incurred forever and in no manner any portion thereof reverts back to the assessee.

9. The aforesaid facts would demonstrate that the ingredients of Section 37 of the Act stand satisfied. Therefore, normally the expenditure is to be allowed as business expenditure in the year in question in which the same is incurred. In this backdrop, we have to consider the arguments of the Revenue predicated on the so called enduring benefit which is the expenditure on account of advertisement and publicity confers. This argument is based on the judgment of the Apex Court in Madras Industrial Investment Corporation Ltd.(supra). In that case, the Supreme Court had referred to this „matching concept‟. It was held that ordinarily revenue expenditure incurred wholly or exclusively for the purpose of business, can be applied in the year in which it is incurred. However, the facts may justify spreading the expenditure and claiming it over a period of ensuing years, where allowing the entire expenditure in one year could give a very distorted picture of the profits of a particular year. One such instance was issuing debentures at discount. The Supreme Court was of the opinion that though in such cases the assessee had incurred the liability to pay the discount in the year of issue of debentures, the payment is to secure the benefit over a number of years. There was a continuing benefit to the assessee of the company over the entire period and, therefore, the liability was to be spread over the period of debentures.

10. We are unable to persuade ourselves by the aforesaid submission of the learned counsel for the Revenue. Identical argument was taken by the Revenue in IFCI (supra). Explaining the ratio of Supreme Court in Madras Industrial Investment Corpn. Ltd. (supra), the argument of the Revenue was rejected in the following manner:-

"The judgments on which reliance is placed by the learned Counsel for the Revenue would be of no avail in the instant case. The learned Counsel for the Revenue had strongly argued that matching concept is to be applied, as per which part of the expenditure had to be deferred and claimed in the subsequent years and, therefore, approach of the AO was correct. However, this argument overlooks that even in Madras Industrial Investment Corporation (supra), on which the reliance was placed by Ms. Bansal, the general principle stated was that ordinarily revenue expenditure incurred wholly and exclusively for the purpose of business can be allowed in the year in which it is incurred. Some exceptional cases can justify spreading the expenditure and claiming it over a period of ensuing years. It is important to note that in that judgment, it was the assessee who wanted spreading the expenditure over a period of time as was justifying such spread. It was a case of issuing debentures at discount;