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2022 (2) TMI 696 - ITAT CHENNAIExpenditure for project related activities and also incurred other fixed administrative costs - AR made limited alternative submissions that the business expenditure is genuine and therefore, the same may be allowed to be capitalized during this year - allowable business expenditure - HELD THAT:- It could be gathered that whether the business had been set up/commenced or not would not be much germane to the facts of the case since AO has already allowed admissible depreciation to the assessee which would establish that the fact of commencement of business has been accepted by AO. The finding that the expenditure has been claimed as deferred revenue expenditure in the books whereas full expenditure has been claimed in the computation of income, is not a correct finding. The perusal of details of other expenses as debited in Profit & Loss Account and the details of construction expenses would show that the set of expenditures are altogether different and therefore, it is not a case where the assessee has claimed deferred revenue expenditure. The findings rendered by Ld. AO are not correct. We are convinced with Ld. AR's submissions that since the genuineness of the expenditure is not under question, the capitalization of the same as work-in-progress may be allowed. These submissions find all the more favor in the background of the fact that the assessee is following percentage of completion method of accounting. Therefore, we direct Ld. AO to allow capitalization as 'other expenses'. No other ground has been urged before us.
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