INCOME TAX ACT, 1961

--Capital or revenue expenditure--Advertisement and sales promotion expensesAO had not dealt with the factual matrix in detail--Assessee was engaged in the manufacture and sale of moped and bikes, etc. It claimed advertisement expense as a revenue expenditure but AO treated the same as a capital expenditure on the ground that it was incurred for enduring benefit to business of assessee. There was no discussion of factual aspects, nature, type, purpose or objective behind the said expenditure. CIT(A) and Tribunal treated the same as revenue expenses. Held: Given the factual matrix, it was difficult to hold that the expenses were incurred for setting the profit earning machinery in motion or not for earning profits, therefore, the impugned expenses were a periodical expenses which were incurred continuously in view of the nature of the business.

Income Tax Act, 1961, Section 37(1)