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TMI Blog2018 (12) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... proved that these expenses are directly relatable to the project undertaken by the assessee to be capitalized to work-in-progress account - neither the assessee has justified its allocation of 10% expenses to work-in-progress nor the AO has justified in allocating the expenditure on the basis of work-in-progress to total asset ratio. A reasonable percentage of expenditure debited under the head ‘other expenses’ needs to be allocated to work-in-progress account. Accordingly, we direct the AO to allocate 25% of other expenses of ₹ 24,74,231 as directly related to the project to be capitalized under the head ‘work-in-progress account’. We, order accordingly. - I.T.A No.3474/Mum/2017 - - - Dated:- 3-10-2018 - Shri Joginder Singh (J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, on 08-02-2015 determining total income at ₹ 50,72,210 by making addition towards disallowance of proportionate revenue expenditure claimed by the assessee for ₹ 11,26,059. 3. Aggrieved by the assessment order, assessee preferred appeal before the CIT(A). Before the CIT(A), the assessee submitted that the AO was erred in disallowing revenue expenses being MCGM property tax and other expenses debited to the P L account on adhoc basis without assigning any reasons as to how such revenue expenditure is directly related to work-in-progress. The assessee further submitted that it has debited all direct expenses incurred on the project to work-inprogress account; however, the remaining expenses in the nature of revenue exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for allocation of 10% of such expenses to work-in-progress account and re-worked other expenses on the basis of work-in-progress account to total assets and determined disallowance of ₹ 11,26,059. Neither, the assessee has furnished any details and reasons for allocating adhoc 10% of other expenses to work-in-progress account nor the AO has given any reasons for adopting the basis of capital deployment, i.e. work-in-progress ratio to the total assets ratio to allocate other expenses. The assessee as well as the AO has gone on adhoc basis of allocation of expenses. From this, it is clear that neither the assessee has justified treatment of other expenses being revenue in nature, nor the AO has proved that these expenses are directly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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