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2014 (1) TMI 949 - ITAT CHENNAIAllowability to Set off - Cost of erection of barricades and maintenance to be set off against advertisement income – Held that:- If the cost of barricades and maintenance are to be considered as a part of pre-operative expenditure, then the income arising out of advertisement placed on such barricades, would only go to reduce the pre-operative expenditure - It is not akin to interest on fixed deposits - Interest earned on deposit, is considered under the head "Income from other sources" when surplus funds are kept in bank - On the other hand, erection of barricade was a necessary operation required for execution of the project of the assessee, which was construction of roads. Earning of income from advertisement placed on such barricades, might have been incidental, but nevertheless, without such barricades, the income could not have been earned - If the advertisement income is to be considered under the head "income from other sources", then necessarily cost of barricades had to be considered as expenditure wholly and exclusively incurred for the purpose of making such income - If, on the other hand, the cost of barricades were to be considered as preliminary and pre-operative expenditure, revenue earned on advertisement would only go to reduce such expenditure - the assessee was entitled for claiming the barricade expenditure as expenses against income on advertisement – Decided in favour of Assessee.
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