9911796707
TMI Blog2017 (9) TMI 1954X X X X Extracts X X X X X X X X Extracts X X X X ..... es merely on the submission of the assessee without appreciating that business expenses is only allowable as per Income Tax Act when it is incurred wholly and exclusively for the purpose of business. Expenses incurred for the charitable purposes can be termed as noble but they cannot be allowed to be deducted while computing taxable income." 2. We have heard the arguments advanced by the parties in view of the orders of the authorities below and materials available on record. In the captioned appeal, there is only one issue regarding admissibility of project expenses - whether capital or revenue in nature. The ld. Assessing Officer disallowed the expenditure observing as under : "The case of assessee can be examined on these lines. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals of the Revenue filed before the ITAT for A. Yrs. 2008-09 and 2009-10, the Tribunal in ITA Nos. 1700 & 4796/Del./2012 has decided the issue in the identical facts and circumstances, as under : 7. Having gone through the orders of the authorities below, we find that following note (assessment year 2008-09) was filed before the authorities below on the objectives and project of the society to establish its contention by the assessee that the purpose was not to earn profit but to help the ruler poor: "Nature of' Project Expenses Debited in Profit & Loss account: IFFDC has debited Project Expenses of Rs. 3 ,18,74,470.70 (Rupees Three Crore Eighteen Lakhs Seventy Four Thousands Four Hundred Seventy and Seventy Paise only) which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;executed by them. To Project Expenses represents the amount spent by the assessee society against the grant received from various institutions or reimbursement of expenses made on behalf of the funding agencies. The grant received by IFFDC against the project expenses is also credited as income. Thus, the assessee society (IFFDC) has no basis to capitalize the project expenses of Revenue nature in their hooks." 7.1 Considering the above submissions, the Learned CIT(Appeals) has given following findings in the assessment year 2008-09: "5. I have carefully considered the above submissions and have gone through the annual report and details of various projects undertaken by IFFDC Ltd. To state a few examples, the Society has carried out a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer that the expenditure had not been incurred wholly and exclusively for the purpose of the business, and that alternatively it was capital in nature. The net project expenditure of Rs. 3,18,74,074 is held to have been incurred solely for the furtherance of the enterprise. The appellant, therefore, succeeds at ground of appeal No.2. 7.2 On above consideration, we find that the Assessing Officer has treated the claimed expenditure as capital in nature keeping in mind that the purpose of business of the assessee society is trading of fertilizers, which is not correct rather the assets created namely forest on waste land, check dams ponds etc. became the property of the villages managed through village community and the assessee society ..... X X X X Extracts X X X X X X X X Extracts X X X X
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