Case Law Details
Infosys Ltd Vs ACIT (ITAT Bangalore)
ITAT Bangalore held that expenditure reduced from export turnover should also be reduced from total turnover while computing deduction under section 10AA of the Income Tax Act.
Facts- During the relevant previous year, the assessee had incurred brand building expenses of Rs.81,79,53,112/-. The brand building expenditure were in the nature of subscription to research reports by research agencies and advisory services, participation/sponsorship in seminars, exhibitions, marketing and sales events, retainership amounts paid towards public relations agencies, annual and periodic customer and sales meets, etc.
Notably, Brand building expenses are included and shown under ‘Selling and Marketing expenses’ in the financial statements and claimed as revenue expenditure.
In the draft assessment order, the AO treated the brand building expenses, as deferred revenue expenditure, and allowed 20% of the said expenditure amounting and held that the balance sum constituting 80% of the expenditure will be amortized over the next 4 years.
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