9911796707
TMI Blog2014 (3) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... an Mass Transit Ltd., for the assessment year 2007-08. 2. The assessee, a public limited company, was a joint venture enterprise of the Central Government, the State of Andhra Pradesh and the State Transport Service Operator and Infrastructure Leasing and Financial Services Ltd. It was set up in the financial year 1993- 94 to undertake comprehensive mobility studies and consultancy to the State Government and local bodies, aimed at restructuring and reforming public transport delivery system. It received an advance for equity to the extent of Rs. 7 Crores from the Central Government and started its business in the year 1994. The amounts given by the Central Government were deployed in investments. There is no dispute that the corresponding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to the arrangement with the Central Government etc. Its contentions were rejected by the CIT (A). In these circumstances, it approached the ITAT which ultimately allowed the appeal. 5. The Revenue contends that the Assessing Officer's order allowing only 1/12th of the interest u/s 35D was justified given the circumstances; it was submitted that having regard to the circumstances, the AO's conclusion that the assessee had not commenced its business and, therefore, the amounts were not deductible was correct in law. It was next contended that the AO had noticed that apart from interest income, the assessee had not earned any other amount. The only activity of the assessee was investing Rs. 7 Crore fund and enjoying the interest. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. DR's objection the assessee should have made a provision in 2001 itself in its books of a/c, assessee has contended that it as looking for efforts with the government to retain its equity. However, finding that it was reluctant, it felt desirable that the amount is refunded along with returns as claimed by the government. Assessee cannot be held to be wrong as in this proposition avenging government would have proved very costly to the assessee's existence and its reputation. Therefore, assessee refunded the amount along with the returns thereon. Assessee has also demonstrated that looking at the right conduct of assessee, Central government has subsequently approved funds to it and many projects including Delhi have been o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalization is relatable to this year, in view thereof, we hold that the amount of return is allowable to the assessee in this year as business expenditure. Since we have held that assessee 's business has already commenced the entire amount paid to M/s Wilbur Smith Associates is to be allowed to the assessee being professional fee for consultancy services. In view thereof, the grounds of the assessee are allowed." 7. The findings of fact by the Tribunal that the assessee's business of consultancy was set up in 1994-95 and that it earned substantial revenue for the next two years cannot be disputed - we noticed that this finding was arrived at after considering the materials including the additional evidence adduced before it. In these ..... X X X X Extracts X X X X X X X X Extracts X X X X
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