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2017 (7) TMI 1445 - AT - Income TaxDisallowance of revenue expenses - assessee has claimed part of employees cost, office and administrative expenses, selling and marketing expenses and interest charges as revenue expenditure - assessee has capitalised major part of these expenses under the head “land, construction and development - HELD THAT:- Annual Report filed by the assessee would show that the assessee is also engaged in other activities such as relating to acquisition of agricultural land, entering into developing agreement etc. Besides, being a limited company, the assessee is required to incur certain expenses for maintenance of the company. Hence, it cannot be said that development of present project of the assessee is the only activity carried on by it. Assessee has capitalised major part of the impugned expenses and it has claimed only a portion of the same as revenue expenditure, which was considered as relatable to the administrative and other activities carried on by the assessee. We notice that the tax authorities have not found fault with the segregation made by the assessee. However, they have taken the view that all expenses are required to be capitalized, since the project was under construction. We notice that the view taken by the tax authorities is not in accordance with the established accounting principles discussed above. An identical issue relating to the claim of employees cost in the case of M/s. Lodha Palazzo[2014 (12) TMI 1272 - ITAT MUMBAI] and the same was decided in favour of the assessee - we are of the view that the assessee was justified in claiming the above said expenditure as revenue expenses. Decided in favour of assessee.
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