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2022 (6) TMI 1056 - ITAT PUNENature of expenditure - Allowability of general management fees incurred when the assessee is still in the process of completing the project of IT/ITES project - Assessing Officer as well as the ld. CIT(A) took a stand that since the appellant is a process of setting up a SEZ project, the revenue expenditure incurred till the completion of the projects are required to be capitalized - whether the assessee can be said to have commenced/setup business in the facts of the present case or not? - HELD THAT:- In the present case, except making a bald statement before us that the assessee is engaged in real estate business, no evidence was filed before us. The material on record clearly shows the assessee is into process of setting up SEZ project, wherein, SEZ provider creates assets in the form of building and let out/the building. This activity cannot said to be in relation to the real estate business. Therefore, it is a case where the assessee in the process of SEZ project and all the project expenditures have been directly related to the project, the decision of the Hon’ble Supreme Court in the case of Challapalli Sugars Ltd.[1974 (10) TMI 3 - SUPREME COURT] is squarely applicable to the present case. In the said decision, the Hon’ble Supreme Court held that the revenue expenditure incurred till the business is set-up should only add to the capital cost of the project. Thus we uphold the action of the lower authorities in disallowing claim for allowance of expenditure. Thus, we do not find any merit in the present appeal filed by the assessee company on merits of the issue in appeal. Application of principle of consistency - As in the previous year the claim of the assessee came to be allowed by the Assessing Officer. However, the action of the Assessing Officer in the present year taking different view following the decision of the Hon’ble Supreme Court in the case of Challapalli Sugars Ltd. (supra), cannot be faulted with. The doctrine res-judicata has no application to the income-tax proceedings merely because the claim came to be in the earlier years, it is does not mean that the Assessing Officer should allow the same when he is conscious of the non-allowability of the claim in view of well settled position of law in this issue. Thus, we are of the considered opinion that claim of appellant cannot be allowed invoking the principle of consistency. Accordingly, the same is dismissed.
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