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TMI Blog2020 (2) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... d the expenditure have to be taken compositely. The apportion of the expenditure in a consultancy firm like the assessee against each project is not in tune with the standard accounting practices. This is not a case of construction of buildings or townships wherein the expenditure incurred against each project is considered separately depending upon the method of accounting followed by the assessee. The assessee is in the business of providing consultancy and fund management, financial advisory wherein the expenditure and the revenue has to be taken into account in running accounting methods. Revenue has primarily disallowed this expenditure because the assessee has filed a revised return of income which were hitherto claimed under work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding the same to be capital in nature. 2.2 alleging that the appellant has failed to offer any explanation in support of its claim that the expenditure is allowable under section 37(1). 2.3 in affirming the action of AO and not appreciating that the above expenditure, being revenue in nature, is allowable as a deduction under section 37 of the Act. 3. The assessee company fi led the return of income for the AY 2011-ficer to claim the revised loss. The assessee has submitted before the Assessing Officer as under: it is submitted that the assessee has revised its return for the AY 2011-12 for claiming the expenditure booked under the head work in progress. It is further submitted that the said expenditure was in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccountant but have not offered the any explanation to why the return was revised would be capital loss and not allowable as revenue expenditure. 5. Therefore, AO held them to be not revenue in nature and disallowed. 6. The ld. CIT (A) confirmed the addition holding that the expenditure was incurred for the proposed new projects. He held that the expenditure pertaining to the new projects have to be debited against the income of the new project only which was treated as work in progress earlier. 7. Before us, the ld. AR argued that the assessee is engaged in the business of investment banking that provides strategic advisory, financial advisory and capital raising services to corporations, partnerships, and Institutions. Cutting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revised the return of income for relevant assessment year on September, 28,2012 to claim thereof. It was argued that the assessee was constantly engaged in meeting potential clients, undertaking negotiations for entering into the contracts with such clients. It is submitted that it is only on account of persistent efforts made by the assessee in the relevant assessment year, it was successful in obtaining new business vide various contracts entered into in the subsequent years. The above expenditure has been duly recorded in the books of account and audited. The assessee has accordingly prepared original return of income on the above basis. The details of the revenue expenditure incurred by the assessee (categorized as project work in progr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure have to be taken compositely. The apportion of the expenditure in a consultancy firm like the assessee against each project is not in tune with the standard accounting practices. This is not a case of construction of buildings or townships wherein the expenditure incurred against each project is considered separately depending upon the method of accounting followed by the assessee. In the instance case, the assessee is in the business of providing consultancy and fund management, financial advisory wherein the expenditure and the revenue has to be taken into account in running accounting methods. We find that the revenue has primarily disallowed this expenditure because the assessee has fi led a revised return of income which were h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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