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2023 (4) TMI 313 - ITAT AHMEDABADClaim of expenses pertaining to abandoned project - demonstrate incurrence of the expenditure itself - Second round of proecedings before ITAT - HELD THAT:- ITAT in the first round held that the claim of expenditure incurred by the assessee on the abandoned project, was allowable to it subject to the assessee demonstrating the fact that it had incurred the expenditure itself, and not through Gujarat Acrylics Ltd., an Joint Venture entity of the assessee and others. This fact, we find, has been suitably demonstrated by the assessee, by pointing out that the Shareholders agreement between the JV partners entered on 06/01/1995 required the respective parties to the JV to bear costs upto 31-12-1994 and the assessee had till then incurred this cost of 20.51 lacs. As per the terms of agreement between the JV partners costs incurred upto 31-12 -1994 was to be borne by the partners themselves. There was no question therefore of the JV company, i.e Gujarat Acrylics Ltd, bearing any expenditure upto 31-12-1994 . The impugned expenses incurred by the assessee of 20.51 lacs have been suitably demonstrated as incurred upto 31-12-1994. Revenue does not dispute this fact - no doubt in the fact that the said expenses have been incurred by the assessee itself, the Shareholders agreement ruling out in clear terms the JV company from bearing these expenses. Assessee had established clearly that this expenditure had been incurred by the assessee itself. We find that the assessee had sufficiently demonstrated compliance with the conditions stipulated by the ITAT for theallowance of the claim, and we hold that the assessee is entitled to the said claim of project expenses in terms of the direction of the ITAT in the first round. Basis of the Revenue for rejecting the claim missed the crux and contents of the directions of the Tribunal, which was simply to the effect that the assessee had to demonstrate incurrence of the expenditure itself, and for the said purpose, the Tribunal had gone to the extent of directing assessee to demonstrate mode of payment and details of payment etc. Facts demonstrated by the assessee clearly showed that the expenditure had been incurred by the assessee itself. There is no question of denial of claim to the assessee. Thus, ground no.2 and 2.1 are allowed. Claim of wage settlement - in first round directions of the ITAT were to allow claim of wage settlement on thefinal settlement of the wages and on its actual payment. It was on the fulfillment of both the conditions that claim was to be allowed to the assessee - AO in the second round denied the claim finding that the same was not settled by the assessee in the impugned year - HELD THAT:- As assessee was unable to controvert the factual finding that to the extent of the claim of wages was not settled in the impugned year. Inviewof the same, we see no reason to interfere in the order of the ld.CIT(A) disallowing the claim of wages to the extent of Rs.81 lakhs. At the time same, we agree with the contentions of the assessee that the said claim be allowed in the year in which it is actually paid by the assessee. With this direction to the AO, ground of appeal are allowed in the above terms.
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