Case Law Details
Goodyear India Ltd. Vs NeAC (ITAT Delhi)
Coming to Ground raised by the assessee against the making of adhoc disallowance amounting to Rs.3,52,33,953/- being 30% of the total expenditure of 11,74,46,510/- incurred by the assessee on advertisement and publicity.
CIT DR submitted that the AE of the assessee company would certainly be benefitted by expenditure incurred on advertisement and publicity of the products of the AE in India since the advertisement and the publicity would certainly have impact. He therefore, strongly supported the orders of the authorities below.
Assessing Officer observed during the assessment proceedings that during Financial Year 2015- 16, the assessee company had incurred a total sum of 11,74,46,510/- towards advertisement, publicity and sales promotion. The assessee was show-caused as to why the expenditure incurred on advertisement should not be disallowed being in nature of brand building activity. In response thereto, the assessee filed a detailed reply stating that the assessee company is engaged in the manufacturing/trading of tyres and related products. It had incurred these expenses for promoting its sale and to beat its competitor companies as its competitors were also expending on advertisements of their products. It was stated that benefit of such expenditure was derived entirely by the assessee company and not by an affiliate company.
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