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TMI Blog2015 (12) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... acts in directing to delete the additions of Rs. 35,02,119/- and of Rs. 18,643/- on account of capitalization of pre-commencement of expenses pertaining to a project under consideration. 2) The Ld.Commissioner of Income-tax(Appeals)-XV, Ahmedabad has erred in law and on facts in deleting the disallowance of Rs. 5,61,240/- made by the Assessing Officer u/s.40(a)(ia) of the Act. 2b*) The Ld.Commissioner of Income-Tax(Appeals)-XV, Ahmedabad has erred in law and on facts in holding that the disallowance under provision of Section 40(a)(ia) of the Act, would be attracted only in respect of the 'payable' amount of expenditure as on 31st March of the relevant previous year. 3) On the facts and in the circumstances of the case, the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INIT Design Studios and GIHED in connection with sponsoring of GIHED property show and Rs. 18,643/- under the head 'Establishment and Administrative expenses'. The AO treated both the expenditure as pre commencement expenditure. 3.1. On the contrary, the ld.counsel for the assessee supported the order of the ld.CIT(A) and submitted that the issue is covered in favour of assessee by the judgement of the Hon'ble Supreme Court in the case of Taparia Tools Ltd. vs. Jt.CIT in Civil Appeal Nos.6366-6368 of 2003, dated March 23, 2015. The ld.counsel for the assessee drew our attention towards page No.20 of the said judgement. Further, the ld.counsel for the assessee submitted that the issue is also covered by the decision of Special B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. In the case of firm, the moment partnership agreement is there and required capital is brought by partner, the business commences irrespective of the fact whether appellant follow project completion method or percentage completion method. If A.O. is disallowing such expenditure, the same be forming part & parcel of work in progress and allowable as expenses. On the other hand if such expenditure is allowed now the same being business loss and carried forward, will be adjusted against business profit. Hence, in both the cases there is no revenue effect. As per the A.O.'s contention that there is no business income and as per matching principal such expenditure be treated as per commencement of business expenditure is based on worng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that so far as corporate advertisement expenses, computer software expenses, public relation expenses quota expenses, sales promotion expenses, fixed deposit expenses and exhibition expenses are concerned, those expenses should be allowed in the year in which they are incurred. In the case in hand, the assessee has claimed expenditure in the year those were incurred. The AO disallowed on the ground that the expenditure related to the pre-commencement of the business. However, the ld.CIT(A) deleted the disallowance. In the light of the judgement of the Hon'ble Apex Court rendered in the case of Taparia Tools Ltd. vs. Jt.CIT(supra) and decision of the Coordinate Bench in the case of ACIT vs. Ashima Syntex Ltd.(supra), we do not see a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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