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2018 (7) TMI 1813 - AT - Income TaxExpenditure towards acquiring and oping of retail outlets / stores - Disallowance of claim for deduction in respect of revenue expenditure - contention of the assessee that expenditure incurred under the head ‘pre-operative expenses and treated as capital work-in-progress are in the nature of revenue expenditure being rent, salary and other general overhead expenses, which are incurred in connection with running of day to day business of expansion of its existing business by acquisition of new outlets - Held that:- The expenditure are in the nature of salary, electricity, audit fee etc. incurred for expansion of existing line of business that is setting up of more number of stores/speciality stores or for maintenance of already established stores - Operations of these stores at various locations is one composite business and once business had been started then the expenditure can not be linked only to the stores which became operational during the year under consideration. Respectfully following the decision of Hon’ble Bombay High Court in the case of M/s Reliance Footprint Ltd (2013 (12) TMI 161 - ITAT MUMBAI), we are of the considered view that the AO was erred in disallowing revenue expenses claimed by the assessee in the statement of total income, but treated as pre-operative expenses to be capitalized under the head, ‘capital work-in-progress’ in books of account. Therefore, we direct the AO to delete addition made towards disallowance of expenses. - Decided in favour of assessee.
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