Tigre SAS Liquors India Pvt. Ltd Vs DCIT (ITAT Delhi)
The order concerns appeals filed by the assessee before the Income Tax Appellate Tribunal against separate orders of the Commissioner of Income Tax (Appeals) dated 18.09.2018 for Assessment Years 2013–14 and 2014–15. As several issues were interconnected, both appeals were heard together and disposed of through a common order.
For AY 2014–15, the assessee had declared a loss and was engaged in the business of manufacturing and dealing in alcoholic products. The Assessing Officer made additions by disallowing legal and professional expenses related to trademark registration, label registration fees, and marketing expenses, treating them as capital in nature. The CIT(A) partly upheld these disallowances.
On the issue of legal and professional expenses and label registration fees, the Tribunal noted that such expenditure related to trademark and brand registration. Referring to Section 32(1)(ii), it held that trademarks constitute intangible assets and such expenditure is capital in nature, eligible for depreciation. Accordingly, the disallowance upheld by the CIT(A) was confirmed and the assessee’s grounds were dismissed.
Regarding marketing expenses, the Tribunal observed that the expenditure was incurred wholly for business purposes and supported by records such as bills and ledger accounts. It held that the expenses satisfied commercial expediency and should be allowed as revenue expenditure. Consequently, the addition partly sustained by the CIT(A) was deleted and the assessee’s claim was allowed.
