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2018 (5) TMI 1101 - HC - Income TaxTPA - Preoperative expenditure treated as deferred revenue expenditure to be written off over a period of five years - Held that:- Tribunal was influenced by the fact that the assessee had started commercial production in the month of January 2002. The assessee had incurred preoperative expenditure of ₹ 5.29 crores upto 31.12.2001, which was prior to the commencement of commercial production. Out of this amount, an expenditure of ₹ 3.54 crores was nonoperating in nature. It was accounted as deferred revenue expenditure for the year under consideration, which came to ₹ 70.98 lakhs (rounded off). Since the expenditure was non-operating in nature, the assessee had disallowed the same while computing the income in order to claim markup on such operating costs. The Tribunal, therefore, was of the opinion that the issue was in tune with Para4 of the Agreement, under which the associate enterprise had agreed to reimburse the assessee the operational costs and besides others, 05% markup on such operational costs. We are partly in agreement with the view of the Tribunal and no question of law arises in this respect and therefore, they are not considered.
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