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2015 (12) TMI 192 - ITAT AHMEDABAD

2015 (12) TMI 192 - ITAT AHMEDABAD - TMI - Additions on account of capitalization of pre-commencement of expenses pertaining to a project under consideration - CIT(A) deleted the addition - Held that:- ACIT vs. Ashima Syntex Ltd.(2008 (10) TMI 298 - ITAT AHMEDABAD-B) has 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 sh .....

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vs. Ashima Syntex Ltd.(supra), we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. - Decided against revenue

Disallowance u/s.40(a)(ia) - CIT(A) deleted the addition - Held that:- We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgement relied upon by the parties. There is no dispute with regard to the fact that there was no finding for treating .....

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anjan, AR ORDER Per Shri Kul Bharat, Judicial Member This appeal by the Revenue is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-XV, Ahmedabad ['CIT(A)' in short] dated 02/07/2012 pertaining to Assessment Year (AY) 2007-08. The Revenue has raised the following grounds of appeal:- 1) The Ld.Commissioner of Income-Tax (Appeals-XV, Ahmedabad has erred in law and on facts in directing to delete the additions of ₹ 35,02,119/- and of ₹ 18,643/- on account .....

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t 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.Commissioner of Income-Tax(Appeals)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer. 4) It is therefore, prayed that the order of the Ld.Commissioner of Income-tax(Appeals)-XV, Ahmedabad may be set-aside and that of the Assessing Officer be restored. 2. Briefly stated facts are that the case of the assessee was picked .....

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being aggrieved by the assessment order, preferred an appeal before the ld.CIT(A), who after considering the submissions of the assessee allowed the appeal and directed the AO to delete the disallowances. Aggrieved by the order of the ld.CIT(A), now the Revenue is appeal before us. 3. First ground is against deletion of addition(s) of ₹ 35,02,119/- and of ₹ 18,643/-. The ld.Sr.DR Shri Narendra Singh vehemently argued that the ld.CIT(A) was not justified in deleting the disallowances. .....

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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 Bench of this Tribunal [ITAT Ahmedabad Bench 'B' .....

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find that the ld.CIT(A) has deleted the addition in para-5 of his order, by observing as under:- "5. I have perused the facts of the case and considered the contention of both A.O. and appellant. I have perused various case laws as relied on by appellant. After careful consideration of facts, I am inclined to accept the contention of the appellant that expenses related to sales & promotion and administrative expenses are allowable revenue expenditure in view of the appellant's busi .....

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tnership 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 .....

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s directed to delete the addition of ₹ 35,02,119 and ₹ 18,643, The appellant gets relief accordingly. In reference to disallowance of ₹ 5,61,200 u/s.40(a)(ia) of the Act, I am inclined to accept the contention of the appellant that since the same had already been paid and nothing remain payable as on 31st March of previous year, as per the ratio of Hon'ble special Bench of ITAT Vishakhapatnam in the case of M/s.Marilyn Shipping & Transport vs. ACIT(supra) there remains .....

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was filed, the AO was bound to carry out the assessment by applying the provisions of that Act and not to go beyond the said return. 4.2. Further, the Hon'ble Special Bench in the case of ACIT vs. Ashima Syntex Ltd.(supra) has 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 .....

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