{"id":20819,"date":"2021-08-05T17:54:39","date_gmt":"2021-08-05T12:24:39","guid":{"rendered":"https:\/\/itatonline.org\/digest\/honda-motorcycle-and-scooter-india-p-ltd-v-dcit-2021-187-itd-264-delhitrib\/"},"modified":"2021-08-05T17:54:39","modified_gmt":"2021-08-05T12:24:39","slug":"honda-motorcycle-and-scooter-india-p-ltd-v-dcit-2021-187-itd-264-delhitrib","status":"publish","type":"post","link":"https:\/\/itatonline.org\/digest\/honda-motorcycle-and-scooter-india-p-ltd-v-dcit-2021-187-itd-264-delhitrib\/","title":{"rendered":"Honda Motorcycle and Scooter India (P.) Ltd. v. DCIT (2021) 187 ITD 264 (Delhi)(Trib.)"},"content":{"rendered":"

Assessee claimed that expenditure had been incurred towards maintenance charges of a Government school for benefit of children of employees of assessee-company.\u00a0 Expenditure was on certain renovation work at training centre at Mohindergarh including providing chairs and tables by assessee. The\u00a0 expenses were debited on account of tools for training center lab. Tribunal held that\u00a0 since all expenses were incurred for efficiently carrying out business of assessee, same fulfilled condition of ‘wholly and exclusively for purpose of business’. Tribunal held that expenditure\u00a0 incurred\u00a0 towards composition fee for regularizing deviation in building structure and issuance of occupancy certificate,.\u00a0 Regularisation was within permissible limits.\u00a0 In case irregularity was continued, structure had to be broken down. Not penalty allowable as revenue expenditure.\u00a0 <\/strong>Expenditure incurred on repair and maintenance of existing structure was to be allowed as revenue expenditure. Expenditure incurred on acquisition of chairs is held to be\u00a0 capital in nature.\u00a0 Assessee-company, engaged in manufacture of two wheelers had debited certain expenditure in respect of glow sign board\/signages which were displayed at location of dealers. Tribunal held that\u00a0 once signage was fixed at dealer’s site, it would not satisfy test of ownership with assessee; expenditure to extent it was shared by assessee was to be allowed in hands of assessee; entire expenditure would not be allowed to assessee.\u00a0 Expenditure was incurred by assessee-company on sales tools fixtures which were placed at dealer’s outlets\u00a0 Assessee incurred such expenditure to maintain standard format of displaying its products all over India in order to induce prospective customers to clearly identify exclusive dealers of assessee’s products in India. These were specifically manufactured by third party manufacturers in accordance with specifications provided by assessee.\u00a0 As per terms of agreement between assessee and third party manufacturers, 50 per cent of price of ‘sales tools’ was directly paid by assessee as advance and balance 50 per cent was paid by authorized dealers at time of delivery at dealer’s outlet. Expenditure\u00a0 incurred was on account of running of business hence allowable as business expenditure. Assessee capitalised lump sum royalty payment in its books of account and same was not claimed as an expenditure in return of income. Tribunal held that since there is no estoppel in income tax law, impugned expenditure could be allowed in additional ground of appeal though assessee had not claimed same in return. Followed\u00a0 CIT v. Hero Honda Motors Ltd (2015) 230 taxmann.com 58 (Delhi)(HC). (AY. 2012-13)<\/p>\n","protected":false},"excerpt":{"rendered":"

S. 37(1) : Business expenditure-CSR-Allowable as business expenditure-Penalty-\tComposition fee paid for regularising deviation in building structure was allowable as revenue expenditure-Capital or revenue-Repairs and maintenance of plant and machinery-Allowable as revenue expenditure-Acquisition of chairs-Capital expenditure-Advertisement expenses-Signage for display of name of Company at dealer\u2019s premises-Expenditure to extent shared is allowable as revenue expenditure-Sales tools\/fixtures-Allowable as revenue expenditure-Lumpsum royalty-Additional ground-Capitalised in books-Claimed in return-Allowable as revenue expenditure. [S. 32] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-20819","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-5pN","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/20819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=20819"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/20819\/revisions"}],"predecessor-version":[{"id":20820,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/20819\/revisions\/20820"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=20819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=20819"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=20819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}