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2020 (12) TMI 291 - AT - Income TaxNature of expenses - demarcation/survey expenses - revenue or capital expenditure - CIT-A deleted the disallowance - HELD THAT:- This issue is, thus, squarely covered by the decision of the Tribunal vide common order [2018 (2) TMI 2013 - ITAT CHANDIGARH] wherein held plots have to be physically marked before handing over to the allottees which requires proper survey and lining of contours. Since the allotment of plots is a regular and recurring activity so as the expenses incurred hence the expenses are to be allowed as revenue expenditure. Addition on account of administrative expenses paid as salary etc. to the employees of Department of Urban Estates. - AO disallowed the said expenditure holding that the employees to whom the salary was paid were not employees of the assessee, rather, those were the employees of the Department of Urban Estates - HELD THAT:- The employees of the Department of Estates have been working owing to the reasons of transfer of functions overtaken by the HUDA. Since these employees are certainly working for HUDA fully and wholly it cannot be said that the salaries paid to the employees is not for business purpose. In the absence of diversion of employees from Department of Estates, HUDA would have to hire outside manpower and also require to pay them accordingly. Keeping in view the functions performed by the employees for HUDA the expenses out of salary cannot be treated as non business expenditure. The principle whether to allow these expenditure are not when the profits are estimated and the arguments taken by both the parties on this aspect are found to be not applicable in the peculiarities of the facts emerging out of the issue of drafting of employees of Department of Estates to work for HUDA. The addition confirmed by the Ld. CIT(A) is hereby directed to be deleted. Expenditure on account of payment to Delhi Metro Corporation on account of expansion of metro services from Delhi to Gurgaon - Whether an allowable expenditure made wholly and exclusively for the business purposes of the assessee - HELD THAT:- The contribution to Delhi Metro can be treated as step in furtherance of the business of the assessee as it improves the accessibility and facilities for the public at large and increases the demand of the land and plots of the assessee. Certainly the connectivity by the metro line will certainly enhanced the business of the assessee and increases the marketability of the plots. The contribution to the metro is akin to construction of the road which will be used by the residents approaching through the road hence the expenditure can be treated as an allowable expenditure laid down for wholly and exclusively for the business purpose. Disallowance of expenditure on account of payment of sale tax - HELD THAT:- Irrespective of the reasons the amount paid as taxes (in this particular instance sales tax) is undisputedly eligible for deduction. There is neither any factual nor legal in congruency. By no stretch of imagination the sales tax paid can be treated as capital expenditure in the facts of this case. Hence we decline to interfere in the well reasoned order of the Ld. CIT(A) in deleting the addition.
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