9911796707
TMI Blog2014 (9) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... taken up for scrutiny assessment and Assessment Order dated 18.12.2008 was passed by the Assessing Officer, disallowing expenditure of Rs. 42,60,293/- on the ground that it should be capitalized as it was "project work in progress". 3. The aforesaid finding was reversed by the Commissioner of Income Tax (Appeals) and the said order has been affirmed in favour of the respondent-assessee by the impugned order dated 06.12.2013 of the Income Tax Appellate Tribunal (ITAT). 4. Basic facts may be noticed. The respondent assessee was engaged in activity of providing consultancy services to Indian and foreign companies and with effect from 01.06.2004, they expanded into rendering venture capital advisory services to global funds in relation to In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected. 5. The Commissioner of Income Tax (Appeals) accepted the plea and contention of the respondent-assessee, inter alia recording that at the time of finalization of accounts for the assessment year 2007-08, the assessee was advised to claim deduction of the expenditure in respective assessment years to which it pertained, since the same was in the nature of revenue expenditure incurred in the course of business and was allowable under Section 37 of the Act in accordance with the accepted principles of taxation. The revised return was filed in this year and similar expenditure was claimed in the income tax return filed for the assessment year 2007-08. The Commissioner of Income Tax (Appeals) noticed that for the assessment year 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty was an extension of the existing business and also by examination of the nature and character of the expenses. The Assessing Officer, unfortunately, has not dealt with and examined the said aspect but made the addition. We do frequently come across the cases where prior period expenses stand disallowed by the Assessing Officer on the ground that the expenditure should have been claimed in the earlier years. We are not inclined to remand the matter as in the subsequent years, the assessee has followed the same method of computing income without any addition on the said account. Moreover, even if addition of Rs. 42,60,293/- is made in this year, the said expenditure will have to be allowed as a deduction in the subsequent years. The income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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