Case Law Details
Gist of Decision: It is a case where while examining the claim of the assessee regarding advertisement and publicity a question was put by the AO to the assessee and a detailed reply was submitted along with necessary details and in such a situation, where the AO has enquired into an issue and being satisfied not made any addition, there is no requirement in law to make a detailed discussion of that issue in the assessment order passed by the AO an enquiry was put by the AO and detailed reply was given and after being satisfied the AO had accepted the claim of the assessee. The view adopted by AO also cannot be described to be impossible view because with the help of decisions of High Courts it has been demonstrated by Authorised Representative that in a case where assessee is engaged in the business activity of real estate, the business is set up when first activity is started i.e., purchase of land. Here in the present case it is the case of CIT that the lease agreement was entered into by the assessee in subsequent assessment year and, therefore, even purchase of land was not effected during the year under consideration. As against that assessee has been able to show that entire sale consideration of the purchase of land was paid during the year under consideration and details of such payments are incorporated in the letter submitted by the assessee with CIT. Therefore, the findings of CIT that business of assessee was not set up in the year under consideration for the reason that lease deed was executed in subsequent year is not factually correct. The business of the assessee was set up with the acquisition of land which even according to lease deed was acquired w.e.f. 22nd Dec., 2003. The genuineness of lease deed cannot be doubted as the same is executed between the assessee and President of India through administration office of DDA. A question was raised by the AO and reply was given by the assessee to contend that advertisement and publicity expenses are allowable. Thus, the view taken by AO cannot be said to be erroneous which will render the assessment order as erroneous. Neither the AO has drawn incorrect assumption of facts nor AO has rendered incorrect application of law when he accepted the claim of the assessee that advertisement and publicity expenses were allowable as business expenditure. When an order cannot be said to be erroneous then it cannot be prejudicial to the interests of Revenue as lawful loss of revenue only can cause prejudice to the Revenue.
