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2016 (4) TMI 388 - AT - Income TaxPreparatory expense - revenue v/s capital expenditure - Held that:- The preparatory expenses are necessity in a construction work and cannot be bifurcated from the actual construction work. Thus, the Ld. DR’s contention fails and the said receipt has to be treated as revenue receipts only. The reliance of the Assessing Officer on Section 35D of the Act is not relevant in the present case. Section 35D provides for amortization of certain preliminary expenses incurred by an assessee before commencement of his business or after the commencement of his business but in connection with the extension of the undertaking or setting up a new unit. The assessee herein neither commenced its business during the assessment year in question nor did it incur the expenses in question for setting up any new unit or for extension of its undertaking. The expenses incurred for obtaining feasibility report, on the possibility of setting up projects, etc. is revenue in nature. - Decided in favour of assessee
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