Income Tax Appeal No. 140 of 2007 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. --- Income Tax Appeal No. 140 of 2007 Date of decision: 28.2.2011 Commissioner of Income Tax (Central) Ludhiana --- Appellant Versus M/s. Liberty Shoes Ltd. --- Respondent CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- Present: Ms. Urvashi Dhugga, Senior Standing Counsel for the appellant-Revenue. Mr. S.K. Mukhi and Ms. Jyoti, Advocates for the respondent. --- AJAY KUMAR MITTAL, J. The paper-book of this case has not been received from the concerned Branch as the same is said to have burnt in the fire incident that took place in the premises of this Court on the night of 30th of January, 2011. Learned counsel for the appellant has made available two copies of paper-book to the Court for reconstruction of the file. The said copies are taken on record and the file of the appeal is treated as having been re-constructed. 2. This appeal under Section 260A of the Income-Tax Act, 1961 (for short “the Act”) has been filed by the Revenue against the order dated Income Tax Appeal No. 140 of 2007 2 14.7.2006, passed by the Income Tax Appellate Tribunal Delhi Bench ‘D’, Delhi (in short “the Tribunal”) in ITA No. 2368(Del)2002, relating to the assessment year 1997-98. 3. The following substantial question of law has been claimed for determination by this Court: “Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in confirming the order of the CIT(A) that expenses of Rs. 1,28,280/- incurred on glow signs were of revenue nature? 4. The facts, in brief, necessary for adjudication as narrated in the appeal, are that the respondent-assessee is manufacturer of leather and non-leather shoes. The assessee filed return for the assessment year in question declaring income of Rs. 3,03,15,470/- on 28.11.1997. The assessing officer made disallowances and additions and treated the investment of Rs. 1,28,280/- on Neon Sign Boards as expenditure of capital nature. The assessment under Section 143(3) of the Act was completed at an income of Rs. 3,11,22,740/- vide order dated 29.2.2000. The Commissioner of Income-tax (Appeals) {in short “the CIT(A)”}, in the appeal preferred by the assesses following the orders under Section 250 (6) for the assessment years 1995-96 and 1996-97 and of the Tribunal for the assessment years 1996-97 and 1997-98, passed in the case of sister concern of the assessee, M/s. Liberty Group Marketing Division, allowed the deductions claimed by the assessee, vide order dated 5.3.2002. The appeal carried by the Revenue against the order of the CIT(A) was dismissed by the Tribunal vide order dated 14.7.2006 and this is how the Revenue is in appeal before this Court now. Income Tax Appeal No. 140 of 2007 3 5. We have heard learned counsel for the parties and have perused the record. 6. The only issue in this appeal that calls for adjudication is regarding nature of the expenses incurred by the assessee on the glow sign boards. According to the revenue, the expenses incurred on that account are capital in nature whereas the assessee has claimed it to be revenue expenditure. 7. The issue is no longer res integra This Court in Commissioner of Income Tax vs. Liberty Group Marketing Division, (2009) 315 ITR 125 considered the similar question and held that glow sign board is not an asset of permanent nature but requires frequent replacement. It was further held that expenditure incurred on glow sign boards is to facilitate business operation and is allowable as revenue expenditure. 8. In view of the above, the substantial question of law is answered against the Revenue and finding no merit in the appeal the same is accordingly dismissed. (AJAY KUMAR MITTAL) JUDGE (ADARSH KUMAR GOEL) February 28, 2011 JUDGE *rkmalik*