TMI Blog2021 (11) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... were directly attributable to the project of NTPC and the said expenses to be capitalized. And it is further noted that the Tribunal confirmed the action of Ld. CIT(A) allowing other expenditure claims as revenue expenditure which were exclusively related to the running of the business. Thus, we note that for A.Y. 2012-13 and A.Y. 2013-14, so far as the expenditure related to the NTPC project was concerned, the Ld. CIT(A) held it to be expenses related to pre-operative stage and disallowed it as revenue expenditure and directed it to be capitalized, which action of Ld. CIT(A) has been upheld by the Tribunal [ 2021 (11) TMI 363 - ITAT JODHPUR] - And we note that in those appeals, the assessee has not pressed the C.O. which was challengi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that the assessee was engaged in the business of providing mining services. The A.O. noted that in A.Y. 2011-12, the assessee was awarded a contract for mine development and operation for the Pakri Barwadih Coal Project in Jharkhand from National Thermal Power Corporation Limited (hereinafter 'NTPC') for mining of coal. The A.O. issued show-cause notice to the assessee as to why the expenses claimed in the Profit Loss A/c should not be treated as pre-operative expenses and capitalized. Pursuant to the SCN, the assessee brought to the notice of the A.O. that the issue of set up of business has been decided in favour of the assessee by the Ld. CIT (Appeals)-18 vide his order dated 19th August 2016 for A.Y. 2012-13. It was point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved 23,44,133/- as advance for executing the project. If appellant wants to claim revenue expenditure then on the basis of principle of matching revenue, appellant should also offer Income out of ₹ 23,44,133/-. However, this has not been done. Hence all expenses related to the project should be capitalized. In the previous assessment years for 2012-13 and assessment year 2013-14, the CIT(A) has taken the view that the expenses which are directly related to the project work have to be capitalized. The appellant apparently accepted such capitalization of the expenses related to project work. This is evident from the order of the Hon'ble ITAT, Kolkata wherein the cross objections filed by the appellant for assessment years 2012-13 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced the details of the employees and the salary paid which is around ₹ 3,22,06,253/-. Out of the total cost of ₹ 8,60,72,020/- an amount of ₹ 3,22,06,253/- requires to be capitalized and the balance needs to be allowed as revenue expenditure. 6.7 In view of the above discussion, legal expenses of ₹ 53,49,119/-, community expenses of ₹ 79,87,741/- and salary expenses of ₹ 3,22,06,253/- are held to be capital in nature as the same are related to setting up of the project. The AO is directed to rework the revenue expenses to be allowed keeping the above observations in mind. Subject to above, the ground no. 2 is partly allowed. 7. Aggrieved by the aforesaid action of the Ld. CIT(A) of partial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure and directed it to be capitalized, which action of Ld. CIT(A) has been upheld by the Tribunal (supra). And we note that in those appeals, the assessee has not pressed the C.O. which was challenging the action of the Ld. CIT(A) directing the capitalization of expenditure related to expenditure incurred in respect of NTPC project. So the action of Ld. CIT(A) to that extend got crystallized. 8. In the light of the aforesaid discussion, we confirm the impugned action of the Ld. CIT(A) in giving partial relief to the assessee on the issue agitated by the Revenue, since we are bound by the decision of the Coordinate Bench in assessee's own case for A.Y. 2012-13 and 2013-14. 9. In the result, the appeal of the Revenue stands ..... X X X X Extracts X X X X X X X X Extracts X X X X
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