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TMI Blog2021 (11) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... e case. 2 The learned Commissioner of Income-tax (Appeals) ought to have concluded that the appellant who is in the business of real estate development, having invested sufficient funds in the projects and disclosing the same as inventories in the balance sheet, had set-up and also commenced the business operations as soon as purchase of inventory being land was made in earlier years. 3 The learned Commissioner of Income-tax (Appeals) erred in holding that the concept of setting up and commencement is different for manufacturing, trading and real estate businesses. 4 The learned Commissioner of Income-tax (Appeals) erred in considering that the routine business expenses which does not result in, any enduring benefit are capital expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sses. Subsequently, the case was selected for scrutiny and accordingly, statutory notices were issued to the assessee, against which the assessee produced books of account and other information called for. 3.1. During the course of assessment proceedings, the AO observed that the assessee had debited an amount of Rs. 69,19,950/- to the profit & loss account towards legal, professional and consultancy charges under the head "Administrative Expenses". When the details were called for by the AO, the assessee furnished the same. On examination of the details furnished by the assessee, the AO observed that an amount of Rs. 43,18,262/- was incurred towards employees services rendered from M/s. NCC Urban Infrastructure Ltd. for day-to-day adminis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory audit fee 3,00,000/- Watch and ward expenses 1,64,645/- 6.1. He submitted that out of the said expenditures, the AO did not allow the legal, professional and consultancy charges of Rs. 69,19,950/- as revenue expenditure, which is not justified. In support of his arguments he relied on the following judgments: 1. HMS Real Estate Pvt. Ltd., ITA No. 3289/Del/2018, dated 27/12/2018 2. Dhoomketu Builders & Development (P) Ltd., [2013] 34 Taxmann.com 18 (Delhi) 3. Sardar Sarovar Narmada Nigam Ltd., [2012] 25 Taxmann.com 198 (Ahd. - Special Bench) 4. Swire Holdings (P) Ltd. (2006) 6 SOT 621 (Bangalore - SMC) 5. Arcane Developers (P) Ltd. {2014} 42 Taxmann.com 10 (Delhi - HC) 6. Arkaaye Builders & Developers (P) Ltd. [2018] 96 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consultancy charges of Rs. 69,19,950/- is hereby allowed as revenue expenditure. Our decision is support by the judgment of the Hon'ble High Court of Delhi in the case of Indian Railway Stations Development Corporation Ltd. Vs. Pr. CIT, [2019] 107 Taxmann.com 79 (Delhi), wherein the Hon'ble Court has held as under: "The commercial activity the assessee is, undoubtedly, engaged in is setting up as an SPY providing services. These services are of specific kind, i.e., preparation of development plans and projects for the development of railway stations. The Indian Railways apparently conceived the idea of setting up the assessee as a special purpose vehicle to re-develop its railway stations. Each of the railway stations. therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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