9911796707
TMI Blog2013 (12) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee filed its return of income for the AY. 2009-10 on 25-09-2009 declaring its total income as Rs. 24,67,613/- under normal provisions and book profit of Rs. 1,45,64,342/- u/s. 115JB. The case of the assessee was selected for scrutiny and notice u/s. 143(2) of the Income Tax Act, 1961 (herein after referred to as 'the Act') was issued to the assessee on 30-08-2010. The Assessing Officer vide assessment order dated 08-12-2011, made additions/dis- allowances inter-alia towards preliminary and pre-operative expenses written off u/s. 35D incurred on account of expansion of business activities. The Assessing Officer also restricted the dis- allowance u/s. 80IB. Aggrieved against the assessment order, the assessee preferred an appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d back the preliminary and pre-operative expenses written off and the legal and consultancy fee in the total income returned by the assessee. On appeal, the CIT(Appeals) held that the expenditure incurred is for arranging the funds required for working capital. Therefore, preliminary and pre-operative expenses claimed by the assessee cannot be allowed without starting any new unit or extending the existing unit. 4. Shri R. Vijayaraghavan, Advocate, appearing on behalf of the assessee submitted that the commission and legal fees has been paid to raise the funds by private placement of equity shares for the purpose of extension/expansion of the undertaking. The ld. Counsel for the assessee placed on record a note giving details of expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not made available before the CIT(Appeals) or the Assessing Officer. 6. We have heard the submissions made by the representatives of both the sides. We have also perused the orders of the authorities below as well as the judgments relied on by the ld. Counsel for the assessee. The provisions of section 35D provides for amortization of certain preliminary expenses which are incurred before commencement of the business or incurred after the commencement of business in connection with the extension of undertaking or in connection with setting up of new unit. The ld. Counsel for the assessee has given the details of the expenditure incurred after raising of the funds through private placement of equity shares. The Counsel has also given the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as consultancy and legal charges incurred towards private placement of shares. 8. As regards the second issue in appeal relating to restriction of dis-allowance u/s.80IB is concerned, the ld. Counsel contended that the Assessing Officer has made certain additions in income returned by the assessee, therefore, the total income eligible for deduction u/s.80IB shall vary. The ld. Counsel further submitted that the assessee is maintaining separate books in respect of manufacturing activity eligible for deduction u/s.80IB according to which the profit eligible for deduction is Rs. 1,68,70,746/- and the amount of deduction on same would be Rs. 50,61,142/-. We find that the assessee had claimed deduction of Rs. 10,78,976/- u/s.80IB, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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