ITAT Upholds ₹680.62 Cr Ad, Marketing & Cooler Expense Deductions, Remands Section 80G Claim

By CA Sandeep Kanoi Income Tax Judiciary August 6, 2026

Case Name: DCIT Vs Coca Cola India Pvt. Ltd. (ITAT Pune)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2018-19
Courts: All ITAT, ITAT Pune

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DCIT Vs Coca Cola India Pvt. Ltd. (ITAT Pune)

The Revenue filed an appeal before the Income Tax Appellate Tribunal (ITAT), Pune against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 18.03.2025 for Assessment Year 2018-19.

The assessee, engaged in the manufacture and sale of non-alcoholic beverage bases (concentrates), Georgia Coffee/Tea premix and dairy whiteners, had filed its return declaring total income of ₹848.17 crore. During scrutiny assessment, the Assessing Officer (AO) disallowed multiple claims including advertisement and sales promotion expenses, marketing support expenses, service charges and reimbursements, depreciation on coolers, and deduction under Section 80G. The assessment was completed determining total income at ₹1,535.58 crore.

Advertisement and Sales Promotion Expenses

The AO disallowed advertisement and sales promotion expenditure of ₹563.86 crore under Section 37(1), holding that the assessee had failed to establish that the expenditure was incurred wholly and exclusively for its own business. The AO also observed that earlier Tribunal decisions in favour of the assessee had been challenged before the Bombay High Court and, therefore, the issue was kept alive by making the disallowance.

Before the CIT(A), the assessee relied upon consistent Tribunal decisions in its own case from Assessment Years 1997-98 to 2016-17. The CIT(A) held that the Tribunal had consistently found:

a direct nexus between the expenditure and the assessee’s concentrate business;
the assessee to be the primary beneficiary of the expenditure;
the expenditure to have been incurred on grounds of commercial expediency;
incidental benefit to bottlers or the brand owner not to affect deductibility under Section 37(1).

Following the earlier Tribunal orders, the CIT(A) deleted the entire addition.

The ITAT upheld the CIT(A)’s order. It observed that the AO had merely relied upon earlier assessment orders and that pendency of Revenue appeals before the High Court was not a valid ground to sustain the additions when identical issues had already been decided by the Tribunal in the assessee’s own case.

Marketing Support Expenses

The AO disallowed marketing support expenditure of ₹32.91 crore under Section 37(1), treating the expenditure as not incurred wholly and exclusively for business purposes.

The CIT(A), following Tribunal decisions for Assessment Years 1997-98 to 2016-17, held that these expenses, consisting of rebates, discounts and incentives to bottlers, had a direct nexus with the assessee’s concentrate business, were incurred wholly and exclusively for business purposes, encouraged higher concentrate sales, and were distinct from advertisement expenditure.

The Tribunal affirmed the deletion, observing that the CIT(A) had correctly followed the earlier decisions of the Tribunal in the assessee’s own case and no distinguishing feature had been brought on record by the Revenue.

Service Charges and Reimbursement

The AO disallowed service charges and reimbursements aggregating to ₹12.62 crore paid to Coca-Cola India Inc., holding that the assessee had failed to establish that the services were rendered exclusively for its business.

The CIT(A) deleted the disallowance by following earlier Tribunal decisions, which had consistently held that:

there was a direct nexus between the services and the assessee’s concentrate business;
incidental benefit to bottlers did not negate deductibility under Section 37(1);
the expenditure had been incurred wholly and exclusively for the assessee’s business.

The Tribunal noted that identical issues had already been decided in favour of the assessee in earlier years, including consolidated orders covering Assessment Years 1998-99 to 2016-17. Since no contrary material was produced by the Revenue, the Tribunal upheld the deletion of the addition.

Depreciation on Coolers

The AO disallowed depreciation of ₹71.23 crore on coolers under Section 32, holding that the coolers were used by bottlers and retailers rather than by the assessee in its own business.

The CIT(A), following earlier Tribunal decisions, held that:

the coolers had a direct nexus with the assessee’s concentrate business by promoting sales of chilled beverages;
the assets were used for the assessee’s business purposes within the meaning of Section 32;
the assessee retained ownership and control over the coolers;
providing coolers was a normal commercial practice in the beverage industry.

The Tribunal observed that identical issues had consistently been decided in favour of the assessee from Assessment Years 2000-01 to 2016-17. Respectfully following those decisions, it upheld the deletion of the disallowance.

Deduction under Section 80G

The AO rejected deduction of ₹6.78 crore under Section 80G because the assessee had not furnished supporting documents such as receipts, eligibility of recipient organisations and proof of payment.

The CIT(A), after examining donation details on a sample basis during appellate proceedings, directed deletion of the disallowance.

The Tribunal held that, for claiming deduction under Section 80G, the assessee was required to furnish complete supporting details including donation receipts, eligibility of recipient organisations and proof of payment through banking channels. It observed that the CIT(A), although possessing co-terminus powers with the AO, had examined only sample documents before allowing the entire claim.

Accordingly, the Tribunal restored the issue to the Assessing Officer with a direction to verify the relevant details and allow the deduction upon satisfaction. This ground was allowed for statistical purposes.

Final Decision

The Tribunal:

upheld the CIT(A)’s deletion of disallowances relating to advertisement and sales promotion expenses;
upheld deletion of marketing support expenses;
upheld deletion of service charges and reimbursement expenses;
upheld deletion of depreciation disallowance on coolers;
restored the issue relating to deduction under Section 80G to the Assessing Officer for verification.

Accordingly, the Revenue’s appeal was partly allowed for statistical purposes.

FULL TEXT OF THE ORDER OF ITAT PUNE

This appeal filed by the Revenue is directed against the order dated 18.03.2025 of the Ld. CIT(A), Pune-13 relating to assessment year 2018-19.

2. Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacturing and sale of concentrate / beverage bases (known as Non-alcoholic beverage bases – NABB) and Georgia Coffee / Tea premix and dairy whiteners during the relevant previous year. It filed its return of income on 30.11.2018 declaring total income of Rs.848,17,99,820/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) accepting the returned income. Subsequently the case was selected for scrutiny and accordingly notice u/s 143(2) was issued and served on the assessee.

Thereafter, notice u/s 142(1) along with a questionnaire was issued and served on the assessee in response to which the assessee filed the requisite details from time to time.

3. During the course of assessment proceedings the Assessing Officer noted that the assessee has debited an amount of Rs.563,86,10,000/- towards advertising and sales promotion expenses and an amount of Rs.32,90,64,000/- on account of marketing support expenses. He asked the assessee to furnish all such details especially in respect of the expenses so as to establish that the same were genuine expenses pertaining to the year under consideration and had been laid out wholly and exclusively for its business only. The assessee in response to the same filed the reply which has been reproduced by the Assessing Officer and which reads as under:

Advertisement and Sales Promotion Expenses:

Advertising and sales promotion expenses incurred by your assessee have been disallowed in the assessment since AY 1997-98. This issue has been decided by the Hon’ble Income Tax Appellate Tribunal (ITAT), Pune for the assessment years 1997-98 to 2004-05 in favour of the Assessee. Copy of orders of the Hon’ble ITAT, Pune for AY 1997-98 dated 30th June 2008 and for AY 1998-99 to 2004-05 dated 31st March, 2010 are enclosed for your ready reference as Annexure 7 and Annexure 8. The Hon’ble DRP has also relied upon the ITAT order for AY 1997-98 to AY 2004-05 and gave direction to AO for not disallowing Advertisement and Sales Promotion expenses as proposed by him in his draft assessment order for AY 2009-10, AY 2010-11 and AY 2011-12.

In view of the above, we respectfully submit that the issue of allowability of advertisement and sales promotion expenses is now squarely covered in favour of your assessee by the above referred judgments of the Hon’ble Tribunal in assessee’s own case.

During the AY 2018-19, your assessee has incurred Rs. 563,86,10,000/- towards advertisement and sales promotion and claimed the same as deductible expenditure under Section 37(1) of the Income-tax Act, 1961. We request your goodself to allow the expenditure in the assessment in view of the decision of the Hon’ble ITAT, Pune relating to AYs 1997-98 to 2004-05.

In this respect, we would also like to submit that the department has filed appeals before the Hon’ble High Court of Mumbai against the aforesaid orders of the Hon’ble ITAT.

Marketing Support Expenses

Marketing Support Expense has been disallowed by the AO on the same grounds on which advertisement and sales promotion expenses were disallowed in earlier assessment years, and our appeals for earlier years are pending before the Hon’ble Income Tax Appellate Tribunal (ITAT).

It is submitted that these expenses are in the nature of rebates and discounts given to the bottlers to increase the sale of concentrate to the bottlers. During AY 2018-19, your assessee has incurred Rs. 32,90,64,000/- towards marketing support expenses and claimed the same as deductible expenditure under Section 37(1) of the Income-tax Act, 1961.

In this regard, we would like to clarify that the marketing support expenditure is mainly in the nature of discounts, rebates and incentives given by your assessee to its customers to increase the sale of concentrate. Therefore, it has a direct nexus with the assessee’s business. Since this expenditure is incurred on account of rebates and discounts given to the customers in relation to the sale of concentrates, this should be allowed as business expenditure under Section 37(1) of the Income-tax Act, 1961.

4. However, the Assessing Officer was not satisfied with the submissions made by the assessee on the ground that the assessee has not proved that the entire expenditure has been incurred wholly and exclusively for the purpose of assessee’s own business. Further, he also held that the decision of the Tribunal has not been accepted by the department and the Revenue has filed an appeal before the Hon’ble Bombay High Court which is pending. Therefore, to keep the issue alive, he made addition of Rs.563,86,10,000/- on account of advertisement and sales promotion expenses.

5. So far as market support expenses is concerned, the Assessing Officer held that the DRP has confirmed the addition made by the Assessing Officer for the impugned assessment year holding that the expenses incurred on account of marketing support charges amounting to Rs.32,90,64,000/- has not been incurred wholly and exclusively for the business purpose in terms of section 37. He accordingly made addition of the same u/s 37(1) of the Act.

6. The Assessing Officer noted that the assessee has incurred expenses on account of service charges and reimbursement of expenses paid to Coca-Cola India Inc. The total expenditure on service charges and reimbursement of service charge during the year is at Rs.11,79,28,955/- & Rs.82,88,463/- respectively totaling to Rs.12,62,17,418/-. The assessee has claimed expenses towards such service charges and reimbursement in earlier years also. On a detailed examination of the nature and purpose of such expenses, he found that the assessee has not been able to prove without doubt, that the services had been rendered by various persons of CCI Inc. to the assessee company and that the expenses were for the business of the assessee. He, therefore, asked the assessee to furnish the reasoning of allowability of these expenditure as business expenditure. Rejecting the various explanations given by the assessee and observing that the decision of the Tribunal has not been accepted by the Revenue and an appeal has been filed before the Hon’ble Bombay High Court, the Assessing Officer disallowed the claim of deduction in respect of service charges and reimbursements amounting to Rs.12,62,17,418/-.

7. The Assessing Officer further noted that the assessee during the year under consideration has claimed depreciation on coolers at Rs.71,23,35,620/-. He noted that as per the practice followed by the assessee, all these coolers are installed at the premises of retailers selling the final product i.e. bottled beverages manufactured by bottlers. He, therefore, asked the assessee to justify the claim of depreciation on these coolers as neither these coolers were being used by the assessee for its own business nor are those being used for the products of assessee. Rejecting the various explanations given by the assessee, the Assessing Officer disallowed the claim of depreciation on coolers amounting to Rs.71,23,35,620/- by observing as under:

12.2. The contention made by the Assessee is duly considered and found unacceptable as under:

12.3. In earlier years, depreciation on coolers was disallowed by the department and the Hon’ble ITAT has upheld the addition for Assessment Years 2000-01 to 2004-05. For Assessment Years 2005-06 to 2014-15, the Hon’ble DRP/CIT(A) has upheld the addition made by the department. Further, in the recent decision of the Hon’ble Tribunal, Pune Bench, vide composite order dated 22/08/2019 for A.Ys. 1998-99 to 2004-05, the disallowance made by the AO on depreciation on coolers has been confirmed. Thus, it is clear that the appellate authority has also accepted that depreciation on coolers is not allowable expenditure for the assessee.

12.4. It is seen that the coolers are being provided either to the bottlers or to the vendors who are engaged in the business of sale of beverages, i.e., soft drinks. The assessee, however, is a manufacturer of soft drink concentrate. It cannot be argued that these coolers are being used for storing such concentrate. The only logical conclusion that follows from these facts is that the coolers are being used by parties other than the assessee and not by the assessee itself for its business or for its products.

12.5. There is no agreement between the manufacturer of the soft drinks and the assessee company which makes it obligatory for the assessee to provide coolers to them or their vendors/retailers for carrying their respective business activities, i.e., sale and manufacturing of beverages.

12.6. Recently, the Hon’ble DRP has confirmed the order of the AO for A.Ys. 2014-15, 2015-16 and 2016-17 on this issue.

12.7. In view of the above, it is concluded that the assessee has not been able to justify the claim of depreciation on coolers by meeting the conditions laid out in Section 32 of the Income-tax Act, 1961, simultaneously and cumulatively. The entire claim of depreciation on coolers amounting to Rs. 71,23,35,620/- is hereby disallowed.

8. The Assessing Officer further noted that the assessee during the year under consideration has claimed deduction u/s 80G of the Act to the tune of Rs.6,77,72,729/-. However, the assessee failed to furnish the details along with any documentary evidence in support of its claim including receipts, eligibility of the organizations for 80G claim, payment made via bank account etc. He, therefore, in absence of supporting evidences to claim such deduction rejected the claim of deduction u/s 80G and made addition of Rs.6,77,72,729/-. Thus, the Assessing Officer completed the assessment determining the total income of the assessee at Rs.15,35,57,99,590/- as against the returned income of Rs.8,48,17,99,820/-.

9. In appeal, the Ld. CIT(A) deleted all the additions. So far as the deletion of advertisement and sales promotion expenses of Rs.563,86,10,000/- is concerned, the Ld. CIT(A) deleted the same by observing as under:

6.3 Findings and Reasons

I have carefully perused and considered the contentions, submissions, including the evidence and case laws, and the arguments put forth by the Appellant as well as those put forth by the AO in his assessment order.

At the outset it must be pointed out that appellant’s claim with respect to the allowability of expenses relating to advertising and sales promotion expenses has been consistently allowed by the Hon’ble Pune Tribunal from AY 1997-98 to AY 2016-17. Key aspects emanating from the rationale underlying the decision of the Hon’ble Tribunal are as follows—

1. Direct Nexus: The tribunal found a direct relationship between CCIPL’s business and the advertising expenditure. An increase in beverage sales directly led to an increase in the sale of concentrates manufactured by CCIPL.

2. Primary Beneficiary: The tribunal determined that the primary beneficiary of the advertising and sales promotion expenditure was CCIPL itself, as the sales of concentrate directly depended on beverage sales. The benefits to bottlers or the parent company were considered incidental.

3. Commercial Expediency: The expenditure was incurred based on commercial expediency. The tribunal was satisfied that the requirements of section 37(1) of the Income-tax Act were met.

4. Economic Cost Recovery: The economic cost of advertising and services is indirectly recovered from the bottlers through higher concentrate prices, resulting in a high gross profit (GP) margin of CCIPL.

5. Incidental Benefit to Third Parties: Even if the brand owner or bottlers benefit from the advertisement expenditure, it should still be allowed as a deduction if it was incurred for promoting CCIPL’s business, and any incidental, direct or indirect benefit to any other party should not be a ground for disallowance.

6. Wholly and Exclusively: Expenses incurred voluntarily and without necessity are permissible for deduction if it promotes CCIPL’s business.

7. Consistency with Tribunal Orders: The ITAT consistently followed its own rulings in the assessee’s case for earlier Assessment Years (AY 1997-98 onwards) where the deduction for advertisement expenses had been allowed.

Respectfully following the decision of Hon’ble Tribunal in appellant’s own case from AY 1997-98 to AY 2016-17, I hold the expenditure to be allowable and therefore delete the entire addition of Rs. 563,86,10,000/- made on account of disallowance of advertising and sales promotion expenses by the AO.

The appellant succeeds on this ground of appeal; the ground is allowed.

10. So far as the disallowance of marketing support charges of Rs.32,90,64,000/- is concerned, the Ld. CIT(A) deleted the same by observing as under:

7.3 Findings and Reasons

It must be pointed out that appellant’s claim with respect to the allowability of expenses under the head / relating to marketing support charges has been consistently allowed by the Hon’ble Pune Tribunal from AY 1997-98 to AY 2016-17. Key aspects emanating from the rationale underlying the decision of the Hon’ble Tribunal are as follows—

1. Direct Nexus with the Assessee’s Business: The ITAT recognised a direct and clear link between the marketing support expenses and the assessee’s business of selling concentrate. These expenses, in the form of rebates, discounts, and incentives given to the bottlers, were aimed at increasing the sale of concentrate.

2. Wholly and Exclusively for Business Purpose: The ITAT accepted the assessee’s contention that the marketing support expenses were incurred wholly and exclusively for the purpose of its own business as required under Section 37(1) of the Act. The Tribunal found that these expenses were a legitimate business expenditure incurred to boost the volume of concentrate sold to the bottlers, ultimately leading to an increase in the assessee’s revenue.

3. Encouraging Bottler Sales: The ITAT underscored that by providing marketing support, the assessee was encouraging the bottlers to promote and sell more of the finished beverages in their respective areas. This increase in beverage sales directly translates to a higher demand for the concentrate manufactured by the assessee.

4. Distinction from Advertisement: The assessee’s clarification that marketing support expenses were mainly in the nature of discounts, rebates, and incentives based on sales volume, and were distinct from brand advertisement expenditure was found to be tenable by the Tribunal.

5. Recovered from Bottlers: Given that the advertisement cost is indirectly recovered from the bottlers (including HCCB) by way of higher margin/prices charged from them, it is wrong to assume the scheme’s sole motive is to reduce losses of HCCB.

6. Consistency with Earlier Tribunal Orders: The ITAT, in various orders across different Assessment Years (including AY 2005-06 to AY 2016-17), has consistently allowed the deduction for marketing support expenses in the assessee’s own case.

Respectfully following the decision of Hon’ble Tribunal in appellant’s own case from AY 1997-98 to AY 2016-17, I hold the expenditure to be allowable and therefore delete the entire addition of ₹32,90,64,000/- made on account of disallowance of marketing support charges by the AO.

11. So far as the disallowance of service charges and reimbursement of expenses of Rs.12,62,17,418/- is concerned, the Ld. CIT(A) deleted the same by observing as under:

8.3 Findings and Reasons

It must be pointed out that appellant’s claim with respect to the allowability of expenses under the head / relating to service charges and reimbursement to Coca Cola India Inc (CCII) has been consistently allowed by the Hon’ble Pune Tribunal from AY 1997-98 to AY 2016-17. Key aspects emanating from the rationale underlying the decision of the Hon’ble Tribunal are as follows –

1. Nexus to Assessee’s Business: The ITAT found a direct nexus between the services rendered by CCI Inc. (even those relating to bottlers’ plants or quality audits) and the assessee’s business of manufacturing and selling concentrate – an increase in beverage sales directly impacts the sale of the assessee’s concentrate.

2. Rejection of Strict Separate Entity View: While acknowledging the separate legal identities within the Coca-Cola group, the ITAT did not consider this a bar to deductibility if the expenditure ultimately served the assessee’s business objectives. The ITAT’s focus was on the economic benefit to the assessee’s concentrate business.

3. Wholly and Exclusively for Business (Section 37(1)): The ITAT considered the expenditure to be wholly and exclusively for the purpose of the assessee’s business under Section 37(1) of the Income Tax Act. Incidental benefit to third parties (like bottlers) does not negate this if the primary purpose serves the assessee’s business interests. The term ‘exclusively’ does not mean that only the assessee should benefit.

4. Consistency with Preceding Year Orders: The Tribunal followed its own rulings for immediately preceding assessment years, maintaining judicial consistency on the issue, even when the Revenue raised similar arguments, or that the service agreement(s) evolved over time.

Respectfully following the decision of Hon’ble Tribunal in appellant’s own case from AY 1997-98 to AY 2016-17, I hold the expenditure to be allowable and therefore delete the entire addition of Rs. 12,62,17,418/- made on account of disallowance of marketing support charges by the AO.

The appellant succeeds on this ground of appeal; the ground is allowed.

12. So far as the addition on account of disallowance of depreciation on coolers of Rs.71,23,35,620/- is concerned, the Ld. CIT(A) deleted the same by observing as under:

9.3 Findings and Reasons

It must be pointed out that appellant’s claim with respect to the allowability of expenses under the head / relating to depreciation on coolers has been consistently allowed by the Hon’ble Pune Tribunal from AY 1997-98 to AY 2016-17. Key aspects emanating from the rationale underlying the decision of the Hon’ble Tribunal are as follows—

1. Direct Nexus to Concentrate Business: The ITAT recognised a clear and direct link between the provision of chilled beverages through the placement of coolers and the increased sale of the assessee’s primary product, the concentrate. The logic here is that Coca-Cola India Pvt. Ltd.’s business is the manufacture and sale of concentrate or beverage base. This concentrate is then used by bottlers to produce the final beverages like Sprite, Fanta, and Thums-Up. If these final beverages are readily available and appealing to consumers (which is enhanced by being chilled in a cooler), the bottlers will sell more, and consequently, they will need to purchase more concentrate from the assessee. Therefore, the expenditure on coolers, which facilitates the sale of chilled beverages, directly fuels the demand for and sale of the assessee’s core business product, the concentrate. This intricate linkage was a key factor in the Tribunal’s reasoning.

2. Used for Business Purpose (Section 32): The ITAT interpreted the requirement of Section 32 of the Income Tax Act, which allows depreciation on assets “owned by the assessee and used for the purposes of his business or profession”, in a broad sense. The Tribunal accepted that even though the coolers were physically located at the premises of independent bottlers or retail vendors, they were still considered to be used for the business purposes of Coca-Cola India Pvt. Ltd. The critical aspect was that the coolers were instrumental in promoting the sale of the beverages made from the assessee’s concentrate. The Tribunal did not take a restrictive view that the asset must be used directly within the assessee’s own manufacturing facilities or offices. As long as the asset plays a crucial role in furthering the assessee’s business objectives, the condition of “used for the purposes of his business” is met. The fact that the ownership of the cooler always vested with the appellant further supported this view.

3. Normal Industry Practice: The ITAT acknowledged that the placement of branded coolers at retail outlets is a common and commercially necessary practice within the beverage industry. Ensuring that the final product, the chilled beverage, is readily available to consumers in optimal condition (i.e., chilled) is vital for driving sales in a competitive market. By investing in these coolers, Coca-Cola India Pvt. Ltd. was adopting a standard marketing and distribution strategy prevalent in the sector. This commercial expediency was considered a valid justification for incurring the expenditure and claiming depreciation on these assets. The Tribunal recognised that a prudent businessman would undertake such measures to promote their product.

4. Assessee’s Ownership and Control: A significant factor in the ITAT’s decision was that Coca-Cola India Pvt. Ltd. retained complete ownership of the coolers at all times. Furthermore, the assessee maintained a degree of control over the coolers, including the right to access outlets to verify their assets, move coolers between locations, and replace them as needed. These terms and conditions indicated that the coolers were not simply given away to the bottlers or vendors but remained the property and under the strategic control of the assessee, further solidifying their use for the assessee’s business.

5. Interlinked Businesses: The ITAT explicitly rejected the Assessing Officer’s argument that because the coolers store the final beverages (produced by the bottlers) and not the concentrate (manufactured by the assessee), they are not used for the assessee’s business. The Tribunal firmly established the inherent and inseparable connection between the assessee’s business of manufacturing concentrate and the bottlers’ business of producing and selling the final beverages. The demand for the final beverage directly dictates the demand for the concentrate. Therefore, any asset or

6. Consistency (in some cases): In certain instances, the ITAT observed that the Assessing Officer or the Commissioner of Income Tax (Appeals) had allowed similar depreciation claims on coolers in preceding assessment years.

13. So far as the disallowance of deduction u/s 80G of Rs.6,77,72,729/- is concerned, the Ld. CIT(A) deleted the same by observing as under:

10.3 Findings and Reasons

It has been claimed by the appellant that all necessary details as required for by the Assessing Officer relating to donations were submitted vide their submission dated 13th January 2021. It has further been submitted that AO’s allegation that the appellant has not submitted details relating to the eligibility of the organizations to which donations were made is wrong since he did not ask for the said details.

Be that as it may, during the appellate proceedings the details filed in respect of donation were checked, on a test-check basis, and it was observed that the donations have been made in accordance with and meet the requirements of the extant provisions.

Considering the above verification, on a sample basis, the claim of deduction u/s 80G of the appellant is held to be tenable in law. Consequently, the Assessing Officer is directed to delete the disallowance made on account of donations amounting to Rs. 6,77,72,729/-.

The appellant succeeds on this ground of appeal; the ground is allowed.

14. Aggrieved with such order of the Ld. CIT(A) the Revenue is in appeal before the Tribunal by raising the following grounds:

(1) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in allowing the Assessee’s claim of Advertisement and Sales Promotion Expenses incurred by the Assessee of Rs.5,96,76,74,000/- and disallowed by the Assessing Officer, the expenditures being not wholly and exclusively for the purpose of business of the Assessee?

(ii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in not appreciating that the Assessing Officer had disallowed the Advertisement and Sales Promotion Expenses on the ground that such expenses benefited the business of the bottlers of the beverages and the assessee also failed to establish that the economic cost of advertisement was recovered from the bottlers?

(iii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in allowing the Assessee’s claim of service charges incurred by the assessee of Rs.11,79,28,955/- and disallowed by the Assessing Officer?

(iv) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in not appreciating that the Assessing Officer had disallowed the service charges on the ground that such service charges benefited either the bottlers of the beverages or the owners of the brand and trademarks and thus such expenses do not have direct nexus with the business operation of the assessee company?

(v) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in not considering the fact that the assessee has not discharged its onus to prove that the service charges were wholly and exclusively incurred for the purpose of the assessee’s business?

(vi) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in allowing depreciation on coolers without appreciating the fact that one of the conditions mentioned u/s 32 of the Income-tax Act, 1961, to claim depreciation as an eligible expense viz. asset should be used for business/profession of the assessee is not fulfilled, since the coolers were used for the purpose of business activities of the bottlers and assessee’s business did not include bottling of concentrates from 30/11/1997 onwards?

(vii) On the facts and in the circumstances of the case and in the law, the Ld. CIT(A) erred in allowing the deduction u/s 80G of the Income Tax Act, 1961 without providing any opportunity to the Jurisdictional Assessing Officer to examine the additional evidence submitted during the appellate proceedings as per Rule 46A of the Income Tax Rule, 1962.

(viii) The appellant craves to ad amend, alter or delete any of the above ground of appeal during the course of appellate proceedings before the Hon’ble Tribunal.

15. In grounds of appeal No.1 and 2 the Revenue has challenged the order of the Ld. CIT(A) in deleting the addition made by the Assessing Officer of Rs.5,96,76,74,000/- towards advertisement and sales promotion expenses of Rs.563,86,10,000/- and marketing support expenses of Rs.32,90,64,000/-.

16. After hearing both the sides, we do not find any infirmity in the order of the Ld. CIT(A) on this issue. We find the Assessing Officer while making the disallowance has relied on the assessment orders for earlier years i.e. from assessment year 2006-07 to 2017-18. We find the issue has already been decided by the Tribunal in assessee’s own case for various assessment years. Merely because the Revenue has not accepted the order of the Tribunal and has challenged the same before the Hon’ble Bombay High Court which is pending and therefore, to keep the matter alive the additions have been made cannot be a ground to sustain such addition. Since the Ld. CIT(A) while deleting the additions has followed the decision of the Tribunal in assessee’s own case for the past so many years, therefore, respectfully following the decision of the Tribunal in assessee’s own case and in absence of any distinguishing features brought before us, we uphold the order of the Ld. CIT(A) on this issue. The grounds of appeal No.1 and 2 raised by the Revenue are accordingly dismissed.

17. Grounds of appeal No.3, 4 and 5 relate to the order of the Ld. CIT(A) in deleting the addition of Rs.11,79,28,955/- on account of service charges incurred by the assessee.

18. After hearing both the sides we find the Assessing Officer while making the addition has referred to the past assessment orders and the orders of the DRP from assessment year 1998-99 to 2016-17. We find the Ld. CIT(A) while deleting the addition relied on the decision of the Tribunal in assessee’s own case for the preceding assessment years. We find the Tribunal in assessee’s own case vide ITA Nos.1258/PUN/2003, 182/PUN/2004 and ITA No.237/PUN/2004 for assessment years 1998-99 and 1999-2000 at paras 12 and 13 of the order has decided the issue in favour of the assessee by observing as under:

“12. The only issue raised in the cross appeals for the assessment year 1999-2000 is about the extent of deductibility of service charges paid by the assessee to CCI Inc. For this year also, the assessee claimed deduction of service charges amounting to Rs.45,27,29,472/- after adjustment of certain debit notes with the gross amount at Rs.54,22,93,800/-. The AO, following the parity of reasoning given for the earlier years, disallowed the full amount of service charges. The ld. CIT(A), however, restricted the disallowance to 30%. Both the assessee as well as the Revenue have come up in cross appeals on their respective stands.

13. We have heard both the sides and gone through the relevant material on record. At the very outset, the rival parties fairly conceded that the facts and circumstances of the appeals for the instant year are mutatis mutandis similar to those of the preceding year, which was argued by them at length. In fact, the parties simply adopted their arguments made for the assessment year 1998-99. The only distinguishing feature brought to our notice was that the assessee did not carry out any bottling activity in the instant year. Having regard to the fact that there is no distinction in the facts and circumstances of the case qua the Service charges paid by the assessee to CCI Inc., following the view taken by the Tribunal for the preceding years, we direct to allow the deduction for service charges in full. At the cost of repetition, it is once again made clear that the deduction is being allowed so as to maintain consistency in the view of the Tribunal as the matter is sub judice before the Hon’ble High Court notwithstanding the fact that the Department has a good arguable case.”

19. We find, following the above order, the Tribunal vide bunch of appeals filed by the assessee as well as the Revenue in assessee’s own case for assessment years 2001-02 to 2004-05 vide consolidated order dated 29.04.2022 at para 13 of the order has deleted the entire service charges by observing as under:

“13. Third assessment year herein 2002-03 involves the assessee’s and the Revenue’s cross appeals ITA No. 256 & 356/Pun/2007. The assessee’s 13th to 18th substantive grounds and the Revenue’s second to fourth substantive grounds raise the common issue of disallowance of service charges made by the Assessing Officer to the extent of Rs.5,45,88,227/- as restricted to 30% only in the CIT(A)’s order. We draw support from our foregoing discussion to delete the impugned disallowance in entirety and accept and reject the assessee’s and the Revenue’s corresponding substantive grounds. Latter’s appeal ITA No. 356/Pun/2007 fails accordingly.”

20. We find this view has been followed by the Tribunal in assessee’s own case in a batch of appeals filed by the assessee as well the Revenue for assessment years 2005-06 to 2016-17 vide consolidated order dated 12.01.2023 and decided the issue in favour of the assessee. Since the Ld. CIT(A) while deleting the addition has relied on the decision of the Tribunal in assessee’s own case for the preceding assessment years, therefore, in absence of any contrary material brought to our notice by the Revenue on this issue, we uphold the order of the Ld. CIT(A) on this issue. The grounds of appeal No.3, 4 and 5 raised by the Revenue are accordingly dismissed.

21. Ground of appeal No.6 relates to the order of the Ld. CIT(A) deleting the addition on account of depreciation on coolers.

22. After hearing both the sides we find the Assessing Officer while making the disallowance followed his order for earlier assessment years stating that the coolers are being provided either to the bottlers or to the vendors who are engaged in the business of sale of beverages i.e. soft drinks. The assessee however, is a manufacturer of soft drink concentrate. According to the Assessing Officer it cannot be argued that these coolers are being used for storing such concentrate. Therefore, the only logical conclusion that follows from these facts is that the coolers are being used by the parties other than the assessee and not by the assessee itself for its business or for its products. Further, according to the Assessing Officer, there is no agreement between the manufacturer of the soft drinks and the assessee company which makes its obligatory for the assessee to provide the coolers to them or their vendors / retailers for carrying their respective business activities i.e. sale and manufacturing of beverages. He, therefore, following the decision of the DRP for assessment years 2014-15, 2015-16 and 2016-17 on this issue disallowed the claim of depreciation. We find the Ld. CIT(A) relying on the decision of the Tribunal in assessee’s own case from assessment year 2000-01 to 2016-17 deleted the addition, the reasons of which have already been reproduced in the preceding paragraphs. Since the Ld. CIT(A) while deleting the addition has followed the decision of the Tribunal in assessee’s own case for the preceding assessment years, therefore, respectfully following the decision of the Tribunal in assessee’s own case for assessment years 2000-01 to 2016-17, we uphold the order of the Ld. CIT(A) deleting the addition made by the Assessing Officer. Ground of appeal No.6 raised by the Revenue is accordingly dismissed.

23. Ground of appeal No.7 relates to the order of the Ld. CIT(A) in deleting the disallowance made by the Assessing Officer on account of claim of deduction u/s 80G of the Act.

24. After hearing both the sides, we find the Assessing Officer rejected the claim of deduction u/s 80G on account of failure of the assessee to furnish the details along with documentary evidence in support of the claim including receipts, eligibility of the organizations for 80G claim, payment made via bank account etc. We find the Ld. CIT(A), on the basis of certain additional evidences and on a sample basis, deleted the addition, the reasons of which have already been reproduced in the preceding paragraphs. In our opinion, for claiming the deduction u/s 80G, it was incumbent upon the assessee to submit all the details such as copy of receipts, eligibility of the organizations, issuing receipts for claim of 80G deduction, payments made through banking channel etc. Although the Assessing Officer has not asked for the details relating to the eligibility of the organization to which donations were made and made the addition on that account, however, in our opinion the powers of the Ld. CIT(A) are co-terminus with that of the Assessing Officer. He should have called for those details. He has merely checked some receipts on sample basis and allowed the entire claim of deduction u/s 80G amounting to Rs.6,77,72,729/-. Under these circumstances, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to verify the details and upon satisfaction, allow the claim of deduction of Rs.6,77,72,729/- claimed by the assessee u/s 80G. Ground of appeal No.7 raised by the Revenue is accordingly allowed for statistical purposes.

25. In the result, the appeal filed by the Revenue is partly allowed for statistical purposes.

Order pronounced in the open Court on 27^th July, 2026.