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2017 (3) TMI 1464 - AT - Income TaxAllocation of the administrative expenses on proportionate basis towards work in progress - whether expenses in question are directly relatable to the projects - Held that:- The expenses out of the administrative expenses of ₹ 1,11,31,064/- which are related directly to the work in progress in respect of three projects, cannot be decided by apportioning the expenses in the ratio of work in progress to total turnover including work in progress. The Assessing Officer is required to examine the expenses case to case basis, in the light of the decision of the Tribunal in the case of Sutlej Cotton Mills Ltd.(1998 (1) TMI 107 - ITAT DELHI-D ) to ascertain whether same are related directly to the three projects in reference. The expenses on Director’s remuneration have already been held by the learned Commissioner of Income-tax (Appeals) as not relatable to any of the projects and already excluded for the purpose of valuation of work in progress and that finding has not been challenged by the Revenue before us. In view of above, we reject the allocation of the administrative expenses on proportionate basis towards work in progress and restore the matter to the file of Assessing Officer with the direction to examine all expenses under administrative expenses, other than Director’s remuneration on case to case basis, to find out whether same are directly related to any of the three projects in reference and then includes the specific expenses which are directly related to the projects to the work in progress.
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