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that the term “advertising” is a term of art for Federal income
tax purposes. Indeed, respondent implicitly concedes that the
rules with respect to advertising govern the deductibility of the
litigated expenses, although, under respondent's interpretation
of those rules, the litigated expenses are not deductible
business expenses because they are capital expenses. Moreover,
respondent called as an expert witness Mukesh Bajaj, Ph.D.,
senior associate, Business Valuation Services, Inc. Dr. Bajaj
was accepted by the Court as an expert in corporate finance and
business valuation, and his written report was received into
evidence as his expert testimony. Dr. Bajaj testified that there
is an accepted textbook definition of advertising.5 On cross-
examination, he conceded that cigarette package graphic designs
qualify as advertising under that definition. On brief,
respondent agrees that cigarette pack graphic designs fit the
textbook definition of advertising. We are, thus, satisfied
4 (...continued)
product, convey information, attract attention at point of sale
when the retailer displays the pack, and other purposes.”, with
(2) “The advertising for a product or group of products serves to
convey information, project the image chosen for the positioning
of the product or products, attract consumer attention to the
product or products, and other purposes.”
5 Dr. Bajaj testified that the accepted, current textbook
definition of advertising is the 1948 definition of the American
Marketing Association, which he summarized as follows: “any paid
form of non-personal presentation and promotion of ideas, goods,
or services by an identified sponsor, which involves the use of
mass media.” (Emphasis omitted.)
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