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2014 (7) TMI 640 - AT - Income TaxExpenses related to raw material Commencement of Business or not Capital expenses or not Held that:- the performance of any activity of business would lead to commencement of business and the business would be held to be set up - The carrying on the first activity is the integral part to the carrying on the business leads up to setting up of or commencement of business - From the facts of the assessee's case, the main business activity being production of sponge iron, the procurement/purchase of raw material being coal and iron ore is thus very much a business activity. Working capital employment means that the working of the business has started and that means when no doubt that business has commenced its working - the nature of the expenses incurred i.e. interest on working capital, upfront free and insurance and other charges are in the nature of revenue expenditure Decided in favour of Assessee. Carry forward of business loss Assessment u/s 153A - Non filing of return u/s 139(1) Held that:- the assessee is not supposed to file its return of income u/s 139(1) of the Act because he statutorily required to file return of its income in response to notice u/s. 153A of the Act and he has done accordingly and make claim of loss - Neither the AO nor CIT(A) has doubted the genuineness of claim of loss rather on technical issue that it has not claimed the loss in the return of income to be filed u/s. 139(1) of the Act, disallowed the loss - the claim of loss of assessee is allowed decided in favour of Assessee. Reduction of income Already offered to tax Held that:- The assessee rightly stated that three amounts totalling to ₹ 12,37,178/having been already subjected to tax, a sum of ₹ 64,53,786/standing on the debit side of P&L Account under the head 'Pre-commissioning Revenue Expenses' should be increased to ₹ 76,90,964/during the relevant assessment year - the plea of assessee is genuine and accordingly, the matter is remitted back to the AO Decided in favour of Assessee.
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