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2012 (4) TMI 448 - HC - Income TaxDisallowance of expenses for the period prior to date of Set up of business by AO – Held that:- It cannot be said that the business had commenced only from 1st June, 2001, when the assessee acquired the rights under the agreement dated 21st May, 2001 - Tribunal has rightly kept in mind the difference between setting up of business and commencement of business - the assessee is in a complete state of readiness to undertake its activity, it can be said that it has set up its business, the actual commencement of business may be at a later date – in favour of assessee. Capitalization of expenses and consultancy paid to the architects by AO – Tribunal treated expenditure incurred in respect of leasehold premises on account of electrical work, wooden partitions, laying down of cables, false flooring etc and consultancy to architect makes no addition of extension of the premises taken by the assessee on lease as nothing was added to the profit making apparatus hence no merit in the treating all such expenditure as capital in nature - Held that:- Break up and particulars regarding the expenditure is not available and referred to and no information about the said expenditure was towards purchase and installation of air conditioners/air conditioning plant, furniture etc- Since the factual details have not been considered by the tribunal - set aside the findings recorded by the tribunal and pass an order of remand for fresh decision after ascertaining the factual aspects. Legal and professional charges treated as revenue in nature by ITAT - Held that:- This expenditure was in connection with the transfer of assets and liabilities therefore, should be treated as a part of cost of acquisition of the business/asset - an order of remit with a direction to first examine and decide the factual aspects.
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