Case Law Details
Brief of the Case
ITAT Delhi held In the case of DCIT vs. M/s. Spice Retail Ltd. that the expenditure incurred by the assessee on advertisement has been treated as revenue in nature. It is not open for the AO to treat an expenditure as party revenue in nature and balance 25% as deferred revenue expenditure. The whole expenditure is allowable in the year in which it was incurred.
Facts of the Case
The assessee is engaged in the business of retail trading of mobile handsets and other electronic items and their accessories and also carrying repair works. For the year under consideration, the assessee declared loss of Rs.38.42 crores whereas AO computed the loss at Rs.38.22 crores by disallowing on account of 25% of advertisement and marketing expenses amounting Rs. 13,60,184 and Training and recruitment charge treated as capital expenditure amounting Rs. 6,60,826.
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