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2017 (3) TMI 1668 - AT - Income TaxDisallowing deduction of depreciation, employees’ expenditure and general administrative expenses - Held that:- No business activity was undertaken by the assessee so as to generate revenue inasmuch as neither golf course was ready nor any membership was enrolled nor any business activity was undertaken. Assessee was at a very early stage of completion of golf courses, therefore, it cannot be held that assessee's business activity had commenced. Find merit in the arguments of the learned DR that expenses connected with office, personal, administrative expenses cannot be allowed to the assesseee, they are to be capitalized. Revenue's appeal is allowed. Allocation of expenditure - headwise allocation to land proportion - Held that:- CIT(A)’s order exceeds this tribunal’s observations from going beyond headwise allocation to land proportion. We observe in these facts that the said proportion formula is not a full proof one as both these are distinct projects of residential township and a championship golf course. We thus direct the Assessing Officer to strictly allocate expenditure in question proratawise of the two projects without taking into account the land component therein. He shall finalize the consequential computation going by the gross amount of expenditure vis-à-vis the two heads and the proportion involved therein. The assessee’s third substantive ground in all of its appeal is accordingly accepted for statistical purposes Capitalization of expenditure disallowed on account of non commencement of business - Held that:- CIT(A) has erred in not specifically adjudicating its plea that if the above stated expenditure had to be disallowed on account of non commencement of business and it ought to be capitalized, corresponding income of each assessment year has to be directed to be adjusted against such cost of the two projects. Learned Departmental Representative fails to dispute the above non-adjudication in the CIT(A)’s order. We however are of the opinion that this issue requires a detailed adjudication at assessing authority’s level first Additions of unexplained investments - Held that:- CIT(A) has already examined Assessing Officer’s conclusions in light of assessee’s disclosure during search as spread over to various assessment years to be already more than the amounts in question. Assessing Officer presumed the assessee to have paid the on money in question in respect of all of its land purchased regardless of the survey nos involved and also without indicating any evidence collected during search buttressing such an assumption. Ms. Bhalla fails to indicate any evidence in the case file which could lead us to a conclusion that the assessee has actually paid any on money in respect of all the land purchases. We thus find no merit in Revenue’s argument even quoting Section 292(C) of the Act. Shri Soparkar at this stage states very fairly that the assessee does not wish to press for its pleadings in the above cross objections keeping in mind the fact that we have already upheld CIT(A)’s order deleting the impugned additions in principle.
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