ACIT v. Ludhiana Beverages P. Ltd. (2024) 114 ITR 81 (SN)(Amritsar)(Trib)

S. 37(1) : Business expenditure-Entertainment expenses-Major expenses are through banking channel-Rebates and discounts-Revenue cannot decide what constitutes reasonable expenditure-Enterprise resource planning software expense-Capitalised in books of account-Allowable as revenue expenditure, though the claim was not made in the original or revised return-Advertisement expenses-Purchase of Ice boxes, plastic tables and chairs, bearing logo-Allowable as business expenditure. [R. 46A]

Held that entertainment expenses  are through banking channel hence, addition is deleted. As regards  rebates and discounts, the  Revenue cannot decide what constitutes reasonable expenditure-Disallowance is deleted.  Enterprise resource planning software expense which is  capitalised in books of  account,  allowable as revenue expenditure, though the claim was not made in the original or revised return. As regards advertisement expenses, such as  purchase of  Ice boxes, plastic tables and chairs, bearing logo, disclosed declared rate of profit  hence  no further disallowance can be made.  (AY.2016-17)

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