9911796707
TMI Blog2022 (2) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- 1. The order of the Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case. 2. The Commissioner of Income tax (Appeals) erred in holding that business has not commenced. 3. The CIT(A) ought to have appreciated that the appellant has incurred expenditure for project related activities and also incurred other fixed administrative costs. These fixed costs are administrative in nature required for running the business but not related to construction activities and there will not be any revenue corresponding to these activities as they are administrative in nature. Hence these expenses are allowed to be claimed. The Commissioner of Income tax (Appeals) failed to appreciate that the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though the assessee did not generate any business income but claimed the construction expenses in the computation of income. It was submitted by the assessee that the expenditure incurred for project development was capitalized under work-in-progress which would be claimed in the year in which the project would be completed. However, for income tax purposes, since these expenditures are revenue in nature, the same has been claimed as per consistent method of accounting as followed in earlier years. In other words, the expenditures are to be claimed in the year in which the same has actually been incurred whereas income would be offered to tax in the year of receipt. However, rejecting the same, Ld. AO disallowed the expenditure of Rs. 277.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er expenses as debited in Profit & Loss Account for Rs. 69.29 Lacs (page-2 & 10 of paper-book dated 06.06.2019) and the details of construction expenses of Rs. 277.70 Lacs (page 13 of same paper-book), would show that the set of expenditures are altogether different and therefore, it is not a case where the assessee has claimed deferred revenue expenditure. The findings rendered by Ld. AO are not correct. 8. In the background of above observations, we are convinced with Ld. AR's submissions that since the genuineness of the expenditure is not under question, the capitalization of the same as work-in-progress may be allowed. These submissions find all the more favor in the background of the fact that the assessee is following percentage ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
