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2021 (10) TMI 174 - HC - Income TaxNature of expenditure - Deduction on account of capital work-in-progress written off in computation of its income - expenditure was incurred for creation of new projects and these projects were capital assets of its business which were to yield enduring benefit - AO held that by parking such expenditure under the head capital work-in-progress respondent itself has admitted that those expenses were capital in nature and reduction in capital asset on account of abandoned project for incurring a capital loss cannot be set off or reduced from the income as revenue loss thus denied claim of writing off capital work-in- progress - ITAT held that the expenses incurred were in connection with the existing business and admittedly were of routine nature like salary professional fees etc. and these expenses are otherwise clearly of revenue in nature thus allowable as revenue expenses - HELD THAT - A judgment of this Court in CIT-3 Vs. Idea Cellular Ltd. 2016 (10) TMI 181 - BOMBAY HIGH COURT where the Court held that where new cellular towers were constructed by cellular operator in addition to existing tower and no new business was set up if project was abandoned expenditure so far incurred would be allowed as business expenditure. When we brought this judgment to the notice of Mr. Suresh Kumar and observed that the facts in this case are also identical to the facts of the appeal at hand Mr. Suresh Kumar as an officer of the Court agreed. He also states that an SLP against this judgment is pending but there is no stay. ITAT s view that if an expenditure is incurred for doing the business in a more convenient and profitable manner and has not resulted in bringing any new asset into existence then such expenditure is allowable business expenditure is correct. - Decided against revenue.
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