Tally for CAs in Industry Silver Edition (Single User) Tally Renewal (Auditor Edition) Need Tally for Clients? (Tie-up with us!!!)
Open DEMAT Account with in 24 Hrs and start investing now!
« ITAT-Constitution of Benches »
Open DEMAT Account in 24 hrs
 ITAT can t dismiss application merely on the basis of seeking frequent adjournments: Delhi High Court
 Society registered outside India not eligible for Income Tax Exemption: ITAT
 ITAT stays recovery of outstanding Tax Arrears to the tune of Rs.1260.56 Crores against Google India
 ITAT confirms disallowance of Advertisement Expenses relating to Construction of Swimming Pool Setback to Himalaya
 ITAT grants relief to Atos India Assessment framed for Non-Existent Authority is null & Void
 Capital Gain Deduction claim can be invoked during Re-Assessment if Assessee failed to file Returns: ITAT
 Vodafone Idea Limited is not required to Deduct Tax u/s 194H on Prepaid SIM Cards: ITAT
 Activities performed in ‘Virtual Classrooms’ also comes under the Definition of ‘Education’: ITAT grants relief to NIIT Foundation
 Scrutiny Assessment without Notice is Defective in Law: ITAT
 No Exempt Income Received or Receivable, No Disallowance under Section 14A: ITAT
 Bonus allocated to Policyholders is not Taxable as Income from Insurance Company: ITAT
 Yahoo gets Income Tax Relief from ITAT
 ITAT upholds Addition of 12.5% for taking Bills without Delivery of Goods
 No Capital Gain Tax on Amount Received by Retiring Partner: ITNo Capital Gain Tax on Amount Received by Retiring Partner: ITATAT Read more at: https://www.taxscan.in/no-capital-gain-tax-on-amount-received-by-retiring-partner-itat/56137/

ITAT confirms disallowance of Advertisement Expenses relating to Construction of Swimming Pool Setback to Himalaya
December, 08th 2020

The Income Tax Appellate Tribunal (ITAT), bangalore confirmed the disallowance of advertisement expenses relating to the construction of the swimming pool.

The AO noticed that the assessee firm, Himalaya Drug Company has contributed a sum of Rs.99.66 lakhs to a School named M/s Mallya Aditi International school, Yelahanka, Bangalore for the purpose of construction of a swimming pool in that school.

The assessee claimed the payment as advertisement expenditure. In support of the said claim, it was submitted that the “name of the assessee company” is displayed near the swimming pool and hence the same would promote the brand of the assessee company.

 

It was submitted that over 500 children study in that school. Apart from them, parents of the children also visit School and the alumni of the school hold events etc., who will happen to see the advertisement Board.

Accordingly, it was submitted that the assessee’s brand would get promoted in this process. It was claimed that the above said contribution is in the nature of advertisement expenditure only.

The AO however, noticed that the children of Mr.Meeraj Alim Manal had studied in the school and the children of Ms. Lubna Manal, daughter of Shri Meeraj Alim Manal (i.e., grand children of Mr. Meeraj Alim Manal) continues to study in this school.

Hence, the AO took the view that the contribution for the construction of the swimming pool was made by Mr. Meeraj Manal on account of his personal gestures only and hence it is clearly in the nature of personal expenditure. i.e., there is no commercial consideration involved in it. Accordingly, the AO disallowed the above said claim of Rs.99.66 lakhs.  The DRP upheld the view so taken by the AO.

 

The coram headed by President N.V. Vasudevan noticed that the main objective of making a contribution to the school was on account of personal consideration & gesture of the ultimate owner of the assessee firm and no commercial consideration relating to the assessee herein was attached thereto. Therefore, the ITAT held that the AO was justified in treating the expenditure as not related to the business activity carried on by the assessee. Accordingly, confirmed the disallowance made by the AO.


Home | About Us | Terms and Conditions | Contact Us
Copyright 2021 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting