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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
C I T – Appellant
Versus
M/S GLAXO SMITHKLINE CONSUMER HEALTHCARE LTD. – Respondent
JUDGMENT :
JAGMOHAN BANSAL, J.
1. The appellant through instant appeal under Section 260A of the Income Tax Act, 1961 (for short ‘1961 Act’) is seeking setting aside of order dated 21.03.2007 passed by Income Tax Appellate Tribunal, Chandigarh (for short ‘ITAT’).
2. The appellant has raised following questions for adjudication by this Court:-
(i) Whether on facts and in the circumstances of the case, the ITAT is right in law in treating the expenditure incurred on promotional and trade marketing as revenue expenditure, when the purpose of the expenditure & its intended reality is to obtain benefit of enduring nature?
(ii) Whether on the facts and in the circumstances of the case, the ITAT was right in holding that Excise Duty and Sales Tax will not form part of "total turnover" while computing deduction u/s 80HHC?
(iii) Whether on the facts and in the circumstances of the case the ITAT was right in law in allowing the deduction u/s 80-I of the I.T. Act, 1961, in as much as the machinery had been installed in the same existing factory premises, which is an expansion of the existing factory?
3. Learned counsel for the parties are ad idem that questions No.2 and 3 stand answered against Rev
Legitimacy of business expenses and their allowance as a deduction under Section 37 of the Income Tax Act, 1961.
The Tribunal correctly classified pre-operative and advertising expenses as legitimate business expenditures, reinforcing the distinction between the setting up and commencement of business.
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