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2016 (7) TMI 696 - AT - Income TaxProject development expenditure - Treatment of expenditure in the return of income - disallowance of claim for deduction u/s 37(1) - Held that:- Under the income-tax law, the profit of a particular store cannot be separately computed. Thus, the profits of the retail business have to be computed by taking the entire business as ‘one’. Since the assessee is already having incomes from its retail business, the admitted fact would be that the business of the assessee is already ‘set up’ as per facts and well settled legal position. It is well settled position of law that all the expenses incurred subsequent to the setting up of the business shall be allowable to the assessee. The assessee had wrongly capitalised these expenses under some misconception and misunderstanding of accounting standards. Hon’ble Supreme Court in the case of Taparia Tools Ltd vs JCIT (2015 (3) TMI 853 - SUPREME COURT) wherein observed that the fact that a different treatment was given in the books of account by an assessee could not be a factor which would bar the assessee from claiming the entire expenditure as a deduction. Once a return is filed in a particular manner, the AO is bound to carry out the assessment applying the provisions of the Act and not to go beyond the return. There is no estoppel against the statute and the Act enables and entitles the assessee to claim the entire expenditure in the manner it can be claimed under the law. It has been further clarified by the Hon’ble Supreme Court that under the income-tax, there is no concept of deferred revenue expenditure in the Act, except under specific section, i.e. where amortisation is specifically provided for such as in section 35D of the Act. In the case before us, no such law has been applied by the AO. The assessee has claimed the entire expenditure as revenue expenditure. Keeping in view the nature of these expenses and business of the assessee, we find no reason and justification to deny the claim of the assessee - Decided in favour of assessee
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