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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 ..... ich is to be treated as assessee started its business in the line of real estate business. The case law relied upon by the ld. AR support the assessee's case. The expenditure incurred by the assessee towards legal, professional and consultancy charges is hereby allowed as revenue expenditure. Our decision is support by the judgment of Indian Railway Stations Development Corporation Ltd [ 2019 (4) TMI 816 - DELHI HIGH COURT] as opined that the assessee's activity, which it claims to be preliminary steps towards the fulfilment of the purpose, which is embodied in the MoU clearly indicates that it had set up its business and that these steps were for the ultimate fulfilment of its purposes, which was the preparation of development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that entering into joint development agreements evidences the setting up as well as commencement of real estate business, in which the assessee is operating. 5. The learned Commissioner of Income-tax (Appeals) erred in sustaining disallowance u/s. 14A r.w.r 8D made by the learned Assessing officer. 7. Any other ground of appeal that may be pleaded with the prior approval by the Hon'ble Tribunal during the course of appellate proceedings. The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if considered necessary. 2. Ground Nos. 1 7 are general in nature, hence, need no adjudication. Ground No. 6 regarding disallowance u/s. 14A rw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax at source thereon and the balance amount of ₹ 26,01,688/- was spent towards due diligence and legal opinion obtained from various consultants for purchase of land and drafting of agreements. The assessee submitted that since the said expenditures was treated as revenue in nature, debited to the Profit Loss account. 3.2. After considering the submissions of the assessee, the AO treated the said expenditures as capital expenditure on the ground that the same were incurred before the commencement of business. 4. When the assessee preferred an appeal before the CIT(A), the CIT(A) confirmed the order of AO. 5. Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT. 6. Before us, the ld. AR of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Taxmann.com 152 (Delhi Tribunal) 7. Carefour WC C India (P) Ltd. [2015] 52 taxmann.com 289 (Delhi - HC) 8. Hagwood Commercial Developers (P) Ltd. [2017] 82 Taxmann.com 475 (Mumbai Tribunal) 9. Omniglobe Information Tech India (P) Ltd. [2016] 68 Taxmann.com 112 (Delhi HC) 7. The ld. DR, on the other hand, relied on the orders of revenue authorities. 8. After hearing both the parties and perusing the material on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, as part of its plan needs to be bid for separately and each station needs to be presented with a development plan. Not only was the SPY/assessee required to draw a development plan but also engaged itself in the entire project. It is well settled that there is no bright line that can be determinative as to when business commences. In case of the service sector, where the entity has involved itself in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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