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1 - 2 of 2 (0.17 seconds)The Triveni Engg. Works Ltd. vs Dy. Commissioner Of Income Tax, Special ... on 5 July, 2003
13. We have considered the rival submissions. From the reading of
the AO's order it is clear that he has proceeded on the basis that the
expenditure in question would bring enduring benefit to the
Assessee for a period beyond the previous year. In our view, this is
6 ITA No.880(B)/2011
not the basis on which it can be said that the expenditure was
capital expenditure. It has not been denied that the payments were
made to persons engaged in market research and that the amount in
question was paid for analyzing the level of brand awareness of the
assessee's product. Such understanding of the consumer and the
market expenses incurred for doing so are purely revenue expenses.
The Bombay Bench of the Tribunal in the case of MIRC Electronic
Works Ltd., in ITA No.1652/Mum/2010 has held that spending
money for analysis of market and trends in the market is revenue
expenditure. So also the Delhi Bench of the Tribunal in the case of
KJS India (P)Ltd.,(2011) 45 SOT 17, taken a similar view. We are
also of the view that the decision of the Hon'ble Delhi High Court in
the case of Triveni Engg.Works Ltd., (supra) is not applicable to the
facts of the assessee's case. The expenditure in that case, was in
connection with manufacture of a new product, whereas the
expenditure in the case of the asseseee in this appeal is in respect of
existing product. For the reasons given above, we direct that the
expenditure in question be allowed as deduction.
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