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2020 (2) TMI 451 - AT - Income TaxClaim of expenditure in the revised return - Expenditure incurred for the proposed new projects - allowable deduction u/s 37 - whether expenditure pertaining to the new projects have to be debited against the income of the new project only which was treated as work in progress earlier? - HELD THAT:- Assessee has incurred the expenses on account of salary, telephone and travelling in order to obtain the business which has been procured in the further years down the lines. The business has to be looked into as a composite activity of the assessee and the receipts and the expenditure have to be taken compositely. The apportion of the expenditure in a consultancy firm like the assessee against each project is not in tune with the standard accounting practices. This is not a case of construction of buildings or townships wherein the expenditure incurred against each project is considered separately depending upon the method of accounting followed by the assessee. The assessee is in the business of providing consultancy and fund management, financial advisory wherein the expenditure and the revenue has to be taken into account in running accounting methods. Revenue has primarily disallowed this expenditure because the assessee has filed a revised return of income which were hitherto claimed under work in progress. Once, the assessee has realized that the claim was wrongly not made, the assessee has every right to revise the return indicating correct taxable income. What is to be examined is whether the claim of the assessee is correct or not but not whether the correct claim is filed with the original return or revised return. Since, the claim of the assessee can be accepted with regard to the expenditure involved as allowable expenditure for the year, we hereby hold that no disallowance on this account is required and the addition made is hereby directed to be deleted. Appeal of the assessee is allowed.
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