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2021 (11) TMI 769 - AT - Income TaxDisallowance of expenses u/s 37(1) - legal, professional and consultancy charges was not allowed by treating the same as capital expenditure - CIT(A) observed that this expenditure may be allowed u/s. 35D, but not u/s. 37(1) - HELD THAT:- We observe that the assessee has entered joint development agreement on 18/01/2008 for the development of the land, which means, the commencement of the business was started in case of real estate business, which the assessee is doing. Therefore, there is no confusion in this regard that the assessee has not started its business. JDA was entered for development of the property which is to be treated as assessee started its business in the line of real estate business. The case law relied upon by the ld. AR support the assessee's case. The expenditure incurred by the assessee towards legal, professional and consultancy charges is hereby allowed as revenue expenditure. Our decision is support by the judgment of Indian Railway Stations Development Corporation Ltd [2019 (4) TMI 816 - DELHI HIGH COURT] as opined that the assessee's activity, which it claims to be preliminary steps towards the fulfilment of the purpose, which is embodied in the MoU clearly indicates that it had set up its business and that these steps were for the ultimate fulfilment of its purposes, which was the preparation of development plans leading to the projects. - Decided in favour of assessee.
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