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2019 (9) TMI 1119 - HC - Income TaxExpenses incurred for the preoperative period towards the project development cost - capital expenditure OR revenue expenditure - HELD THAT:- Expenditure incurred for setting up new stores has been claimed as revenue expenditure to the extent the expenditure was revenue in nature and where capital expenditure was incurred, the same was not claimed as revenue expenditure. However, the Respondent in its books of accounts showed the entire expenditure i.e. even the expenditure which is claimed in the income tax return as revenue expenditure as capital expenditure. It was only on the above basis, AO and the CIT (Appeals) held that the revenue expenditure claimed by the Respondent in its return of income could not be allowed. Tribunal allowed the Respondent’s appeal, inter alia, pointing out that the treatment given in the books of account by the assessee would not be conclusive in income tax proceedings to decide whether the expenditure was revenue or capital. In support of its view, the Tribunal relied upon the decision of the Supreme Court in the case of Taparia Tools Ltd. v. JCIT [2015 (3) TMI 853 - SUPREME COURT] The Tribunal also relied upon upon the judgment of its Coordinate Bench in the case of Reliance Footprint Ltd. v. ACIT [2013 (12) TMI 161 - ITAT MUMBAI] for the assessment year 2008-09, on identical facts, holding that the revenue expenditure as claimed is allowable.
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