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TMI Blog2016 (7) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... ee from claiming the entire expenditure as a deduction. Once a return is filed in a particular manner, the AO is bound to carry out the assessment applying the provisions of the Act and not to go beyond the return. There is no estoppel against the statute and the Act enables and entitles the assessee to claim the entire expenditure in the manner it can be claimed under the law. It has been further clarified by the Hon’ble Supreme Court that under the income-tax, there is no concept of deferred revenue expenditure in the Act, except under specific section, i.e. where amortisation is specifically provided for such as in section 35D of the Act. In the case before us, no such law has been applied by the AO. The assessee has claimed the entire expenditure as revenue expenditure. Keeping in view the nature of these expenses and business of the assessee, we find no reason and justification to deny the claim of the assessee - Decided in favour of assessee - I.T.A. No. 1661/Mum/2013, I.T.A. No.1662/Mum/2013 - - - Dated:- 13-7-2016 - Shri Joginder Singh ( Judicial Member ) And Shri Ashwani Taneja ( Acountant Member ) For the Appellants : Shri Vijay Mehta (AR) For the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that identical issue arose in various group companies of the assessee, wherein identical issue has been decided in favour of the assessee by treating these expenses as revenue expenses. He relied upon the following judgements in support of his claim that the impugned expenses should be treated as revenue expenses: 1. Reliance Gems Jewels Ltd. v. DCIT in ITA No. 3855/Mum/2013 for A.Y. 2008-09 (Mumbai Bench), 2. Reliance Footpr int L td. v .ACIT I TA No. 5997/Mum/2011 for A.Y. 2008-09 (Mumbai Bench) 3. Reliance Footprint Ltd vs ACIT in ITA No.5997/Mum/2011order dt. 27.11.2013 (Mumbai Bench) 4. Reliance Supply Chain Solutions Ltd. in ITA No.5759/Mum/2012 for A.Y. 2008-09 order dt. 27.11.2013 (Mumbai Bench) 5. Reliance Supply Chain Solutions Ltd. ITA 6342/Mum/2013 for A.Y. 2009-10 order dt 25.03.2015 (Mumbai Bench) 6. Reliance Supply Chain Solutions Ltd, order dt 13.08.2015 in ITA 1273/Mum/2014 for A.Y. 2010-11 (Mumbai Bench) 7. Reliance Wellness Ltd. v. DCIT in ITA No. 3444,4273/Mum/2013 for A.Y.2008-09 and A.Y.2009-10 order dt 09.09.2015 (Mumbai Bench) 8. Reliance Home Store Ltd. v. ACIT in ITA No.5996/Mum/2011 order dt 15.10.2015 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Salaries Wages 3,499.45 Contribution to Provident Fund, Superannuation Fund, Gratuity and Leave Encashment 911.23 Employee Welfare and other amenities 472.12 Travelling Expenses 110.36 Professional Fees 90.57 Communication Expenses 49.71 Printing and Stationery 26.21 Hire Charges 112.21 Other Project Development Expenditures Others 397.89 5,669.76 Less: Miscellaneous Income (7.39) Pre-Operative Expenses 5,662.37 8. But in the return of income filed by the assessee, the assessee deducted these expenses from the net profit by claiming the same as revenue expenditure. The AO disallowed the same on the ground that the assessee has itself capitalised the same under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bited the same under the head Project Development Expenditure . The assessment of the return has to be made on the basis of return filed by the assessee supported with the accounts of the assessee. While examining the accounts, the return cannot be ignored. The return must take precedence over the accounts in respect of legal claims. The accounts have to be seen only to verify the facts. The admissibility of a claim or otherwise should be primarily and predominantly on the basis of claims made by the assessee in the return of income, unless the assessee claims otherwise subsequently during the course of assessment proceedings. From the discussion made above and the facts before us, following position emerges: (1) The impugned expenses are revenue in nature; (2) The assessee has wrongly capitalised the same in its books of account; (3) In the return filed by the assessee, the assessee claimed the same as revenue expenses; (4) The expenses have been incurred after the setting- up of the business; (5) The expenses pertained to the same business, income of which has been shown in the return and assessed as such by the AO; and (6) The genuineness of the expenses has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade before the AO and have not been controverted by the AO and disallowance is made mainly on the ground that the assessee cannot give dual status to these expenditures i.e. as capital in books of account and as revenue for Income tax purposes. However, such view of the AO cannot be upheld in view of the decision of Hon ble supreme Court in the case of Kedarnath Jute Mfg. Company Ltd. (supra) wherein it has been held that the issue that whether the assessee is entitled to a particular deduction will depend upon the provisions of law relating thereto and not on the view which the assessee might take of his rights; nor can the existence or absence of entries in his books of account be decisive or conclusive in the matter. 6.1 From the submissions made by the assessee before the AO it is also clear that opening of stores at various places was one composite business of the assessee and in that course the assessee had started operation of its stores at Bangalore and Hyderabad. It was the contention of the assessee that operations of these stores at various locations is one composite business and once business had been started operation of its stores at Bangalore and Hyderabad. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stage, for the sake of completeness, the judgement of Hon ble Supreme Court in the case of Taparia Tools Ltd vs JCIT 372 ITR 605 (SC) wherein it has been observed by Hon ble Supreme Court that the fact that a different treatment was given in the books of account by an assessee could not be a factor which would bar the assessee from claiming the entire expenditure as a deduction. Once a return is filed in a particular manner, the AO is bound to carry out the assessment applying the provisions of the Act and not to go beyond the return. There is no estoppel against the statute and the Act enables and entitles the assessee to claim the entire expenditure in the manner it can be claimed under the law. It has been further clarified by the Hon ble Supreme Court that under the income-tax, there is no concept of deferred revenue expenditure in the Act, except under specific section, i.e. where amortisation is specifically provided for such as in section 35D of the Act. In the case before us, no such law has been applied by the AO. The assessee has claimed the entire expenditure as revenue expenditure. Keeping in view the nature of these expenses and business of the assessee, we find no re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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