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| The Tax Publishers2019 TaxPub(DT) 0351 (Del-Trib) INCOME TAX ACT, 1961
Section 37(1)
Since AO had not proved that expenditure in question was not genuine or not incurred for the purpose of business, AO had no power to treat the expense as deferred revenue expenditure and expenditure had to be allowed in full under section 37(1).
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Business expenditure - Expenditure in terms of agreement spread over 5 years - Whether deferred revenue expenditure -
Assessee engaged in advertising activities entered into agreement with 'Municipal Corporation of Delhi' (MCD) for maintaining and operating public urinals in lieu of 'OOH' advertisement media display on operation maintenance and transfer basis. In pursuance of said agreement, assessee incurred an expenditure of Rs. 1,20, crores and claimed deduction thereof. AO considering the terms of agreement, i.e., 5 years treated the expenditure as deferred revenue, and accordingly allowed only 20% thereof. Held: Once assessee claimed deduction for expenditure, in the year in which it was incurred, and AO had not proved that expenditure was not genuine or not incurred for the purpose of business, the expenditure had to be allowed in full under section 37(1).
Relied:CIT v. Citi Financial Consumer Fin. Ltd. (2011) 335 ITR 29 (Del) : 2012 TaxPub(DT) 0100 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
INCOME TAX ACT, 1961
Section 14A
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