The assessee has written off 1/5th of deferred revenue expenditure in its books of account and claimed the expenditure on deferred basis in its return of income.
AS 22 deferred revenue expenditure
the CIT (A) allowed full expenditure. The ITAT confirmed the findings of the CIT (A). On appeal by the department, the High Court dismissed the appeal filed by the revenue with following observations:
(i) The revenue expenditure, which is incurred wholly and exclusively for the purposes of business, must be allowed in its entirety in the year in which it is incurred. It cannot be spread over a number of years even if the assessee has written it off in his books over a period of a number of years.
(ii) There is no prohibition on the powers of the Tribunal to entertain an additional ground which according to the Tribunal arises in the matter for just decision of the case. Therefore, there was no infirmity in the order of the Tribunal