2012 (10) TMI 1052 - AT - Income Tax

Summary

Issues involved: Appeal against the order of the Commissioner of Income Tax (Appeals) relating to assessment year 2009-10 under section 143(3) of Income Tax Act, 1961.

Issue 1: Allowance of appeal without appreciating the facts of the case
The Revenue contended that the learned CIT(A) erred in allowing the appeal of the assessee without appreciating the facts of the case. The learned counsel for the assessee stated that the issue in the present appeal is identical to previous assessment years. The Tribunal had previously held that the expenditure incurred by the assessee was not capital expenditure but rather expenses for carrying out normal farming activities. The Tribunal upheld the order of the CIT (Appeals) based on previous decisions, and dismissed the ground of appeal raised by the Revenue.

Issue 2: Treatment of land development expenditure
The Revenue challenged the deletion of the addition of Rs. 80,90,000 being land development expenditure incurred by the assessee and treated as revenue expenditure. The Assessing Officer disallowed a portion of the expenditure as capital expenses incurred for developing the land. However, the Tribunal, based on previous rulings, allowed the claim of the assessee in its entirety. The Tribunal held that the expenses were for furthering business objectives and not of a capital nature. The Tribunal upheld the order of the CIT (Appeals) and dismissed the appeal of the Revenue.

In conclusion, the Tribunal upheld the order of the CIT (Appeals) in both issues, and the appeal of the Revenue was dismissed.