Satish Kumar Mittal, J. - (1.) THIS judgment shall dispose of one Income Tax reference i.e., IT Ref. No. 2 of 2000, sought by the Revenue, and ten Income Tax appeals i.e., IT Appeal Nos. 9 of 2002, 79, 200 and 201 of 2005, 159 and 160 of 2006, 452, 453, 527 and 528 of 2007, filed by the Revenue, in which the common questions of facts and law are involved, pertaining to different assessment years of one group of the assessee.
(2.) IN IT Ref. No. 2 of 2000, which is arising from the decision of the Income Tax Appellate Tribunal (Delhi Bench 'A', New Delhi) (hereinafter referred to as 'the Tribunal') in case of the assessee for the asst. yr. 1988 - 89, the following substantial question of law has been referred for opinion of this Court: Whether on the facts and in the circumstances of the case, the Tribunal was justified in confirming the orders of CIT(A) that expenses of Rs. 1,86,406 and Rs. 1,79,833 debited to publicity and advertisement account were of revenue nature. In all the 10 appeals, filed by the Revenue, which are arising from the orders of the Tribunal, pertaining to the different assessment years, the Revenue has raised the following substantial question of law for determination of this Court: Whether the Tribunal was right in law in confirming the order of CIT(A) that the expenses incurred on glow sign boards were of revenue nature? In three appeals i.e., IT Appeal Nos. 200 of 2005, 159 and 160 of 2006, the following additional substantial question of law has been raised by the Revenue: Whether the Tribunal was correct in law in allowing assessee's claim for deduction under Section 80 -I of the IT Act, 1961, when conditions laid down for grant of such deduction were not fulfilled?
(3.) IN all these 11 cases, the assessee is M/s Liberty Enterprises, Karnal, and M/s Liberty Group Marketing Division, Karnal. The assessee is engaged in manufacture and sale of leather footwears and shoe uppers, etc. During the course of assessment in the asst. yr. 1988 -89, the AO noticed a debit balance of Rs. 1,89,821 on account of publicity and advertisement. This debit balance was the cost of neon sign and glow sign boards deployed at various places or given to showrooms. The AO treated these expenses as expenses of capital nature and disallowed the same. He further noticed that an amount of Rs. 1,79,833 was also shown as expenses on advertisement. This amount also included Rs. 98,000 as cost of production of TV films, Rs. 75,833 as cost of neon and glow sign boards and Rs. 6,000 as insurance expenses. The AO also treated these expenses as of capital nature by placing reliance on the decision of the Bombay High Court in CIT v. : [1976]102ITR219(Bom) .;