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2015 (9) TMI 1008 - AT - Income TaxDisallowance of pre-operating expense for a “Mawa Project” - revenue v/s capital expenditure - expenditure incurred for expansion of the dairy business of the assessee as held by CIT(A) in deleting the disallowance - what is the nature of the "Mawa‟? Is it a milk product or not and if fails in the scope of the assessee's business of not? - Held that:- The undisputed facts include that the "Mawa" is made up of the milk product and therefore, it is a dairy product and they same is covered within the scope of the declared business of the assessee. We have considered the Ld DRs argument is the preoperative expenditure incurred before a new product is launched constitutes a new business and reject the same. The ice-cream and the Mawa fall in the genus of the dairy/milk products and they are covered by the nature of declared business of the assessee. As such, the impugned expenditure claimed by the assessee does not include any expenditure of capital nature. The control and management, accounts, CEOs for both the dairy /milk products is one and the same. AO has not made out the absence of interlacing of the above. Under the factual matrix of the case, we find the claim of the assessee is allowable. Accordingly, the AO is directed to delete the addition. The order of the CIT (A) is thus, affirmed. - Decided in favour of assessee.
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