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2021 (3) TMI 351 - ITAT DELHIDisallowing security expenses incurred on factory - non capitalization of security expenses to Factory building - HELD THAT:- Assessee was in the business of manufacturing and trading of mosaic and stone tiles. On its factory premises (unit-2) which was part of its business asset and business activity, it had debited expenditure of security expenses and electricity expenses for sums aggregating to ₹ 10,00,264/-. This expenditure has been claimed in the Financial Year 2011-12. The AO and ld. CIT (A) have disallowed the said claim of expenses on the ground that the factory was sold on 07.05.2012 and assessee had received certain advances in the month of January and February, 2012. The sale deed was executed in the Financial Year 2012-13 and hence, it cannot be said that these expenditure were not incurred in F.Y. 2011–12. Even though assessee may not have full-fledged operations from the said factory, but if the factory was under the control of the assessee and certain stocks were lying, then electricity and security expenses cannot be held to be for non-business purpose, because during the year the factory premises was with the assessee. Accordingly, the security expenditure of ₹ 3,86,549/- and electricity expenses of ₹ 6,13,715/- which are duly supported by relevant bills and vouchers are allowed. Appeal of the assessee is allowed.
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