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2015 (10) TMI 1276 - AT - Income TaxDisallowance of project development expenses claimed by the assessee as revenue expenditure u/s 37(1) - assessing officer has taken the view that the expenditure claimed by the assessee is not allowable, since the assessee itself has treated the same as capital expenditure - Held that:- In the instant case, there is no dispute that the nature of business activities of all the stores, i.e., already opened and that are going to be opened, is identical in nature. It is also not in dispute that the assessee is already operating certain stores and it was in the process of opening more number of stores. Hence, we are of the view that it is a case of expansion of business activities. Hence, the view entertained by Ld CIT(A) that the opening of new stores give rise to new sources of income is, in our view, not justified. These expenditures incurred by the assessee are for the purposes of expansion of its business and those expenditure are in the nature of revenue (being mostly paid to employees). These are allowable in the year itself as per ratio of aforementioned decision of the Hon‟ble Bombay High Court in the case of CIT V/s Kothari Auto Parts Manufactures Pvt Ltd (1975 (12) TMI 28 - BOMBAY High Court) and Hon‟ble High Court of Gujarat in the case of CIT V/s Alembic Glass Industries Ltd (1975 (11) TMI 42 - GUJARAT High Court). These expenditures did not create any asset and also did not provide enduring benefit to the business of the assessee so as to say that the expenditure was capital in nature Therefore, we hold that expenditure are allowable in the year under consideration irrespective of the fact that assessee has given dual status to such expenditure in its books of account vis-à-vis computation of income filed along with return - Decided in favour of assessee.
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