Delhi ITAT allows deduction
u/s. 37(1) to PepsiCo India (assessee) for sponsorship fees paid to ICC during
AY 2009-10; Rejects Revenue’s stand that since the expenditure benefitted other
group entities across the globe, it could not be said to have been incurred
wholly and exclusively for the business of the assessee; ITAT clarifies that
“Benefit factor to other related parties is relevant under transfer pricing
provision and not while allowability of business expense u/s. 37(1)”; Observes
that the commercial expediency was not disputed, further acknowledges that
owing to large viewership of Cricket, advertising on such platforms is common;
Separately, treats subsidy received under West Bengal Incentive Scheme of 2004
as a capital receipt as it was given for the purpose of industrialization of
the State, notes that it was based upon fixed capital investment made by
assessee and only the mode of disbursement was in the form of re-payment of
sales tax paid.:ITAT
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