9911796707
TMI Blog2022 (6) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... ence was filed before us. The material on record clearly shows the assessee is into process of setting up SEZ project, wherein, SEZ provider creates assets in the form of building and let out/the building. This activity cannot said to be in relation to the real estate business. Therefore, it is a case where the assessee in the process of SEZ project and all the project expenditures have been directly related to the project, the decision of the Hon ble Supreme Court in the case of Challapalli Sugars Ltd.[ 1974 (10) TMI 3 - SUPREME COURT] is squarely applicable to the present case. In the said decision, the Hon ble Supreme Court held that the revenue expenditure incurred till the business is set-up should only add to the capital cost of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2013-14. 2. The appellant raised the following ground of appeal :- Ground 1: Treating general management fees paid by the Appellant to be capital in nature On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Learned Assessing Officer holding that general management fees of INR 1,41,15,081 paid by the appellant to Ascendas Services (India) Private Limited for availing general management services should be regarded as capital in nature. The Appellant craves leave to add to, alter or omit, all or any of the above grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services to ASIPL in terms of the agreement entered on 18.12.2015 between appellant company and ASIPL. The nature of services provided is mentioned in the letter addressed by the Assessing Officer on 28.12.2015, which is extracted in para 4.1 of the assessment order. The Assessing Officer denied the claim of the appellant company that it is of revenue expenditure as expenditure is incurred to carry on the business of the assessee does not result into creation of any capital assets and, therefore, the same should be allowed as revenue expenses placing reliance on the decision of the Hon ble Supreme Court in the case of Empire Jute Co. Ltd. vs. CIT, 124 ITR 1 (SC), also the decision of the Hon ble Delhi High Court in the case of ACIT vs. Asa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the ld. CIT(A), the appellant is in appeal before us. 7. It is submitted before us that the expenditure incurred for running the business, which are not directly relatable to fixed asset is allowable as revenue expenditure placing reliance on the decision of the Co-ordinate Bench of the Tribunal in the case of M/s. Surya Infra IT Parks Pvt. Ltd. vs. CIT in ITA No.863/Hyd/2014 for the assessment year 2009-10, order dated 30.11.2015. It is also submitted that in the previous year the claim of the assessee came to be allowed. Hence, on the principle of consistency, in this year, the claim should be allowed by the Assessing Officer. In support of this, the assessment orders for the previous assessment years have been filed before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us. The material on record clearly shows the assessee is into process of setting up SEZ project, wherein, SEZ provider creates assets in the form of building and let out/the building. This activity cannot said to be in relation to the real estate business. Therefore, it is a case where the assessee in the process of SEZ project and all the project expenditures have been directly related to the project, the decision of the Hon ble Supreme Court in the case of Challapalli Sugars Ltd. vs. CIT, 98 ITR 167 (SC) is squarely applicable to the present case. In the said decision, the Hon ble Supreme Court held that the revenue expenditure incurred till the business is set-up should only add to the capital cost of the project. The relevant part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st is paid on money raised to defray expenses of the construction of any work or building or the provision of any plant in contingencies mentioned in that section even though such money constitutes share capital. The same principle, in our opinion, should hold good if interest is paid on money not raised by way of share capital but taken on loan for the purpose of defraying the expenses of the construction of any work or building or the provision of any plant. The reason indeed would be stronger in case such interest is paid on money taken on loan for meeting the above expenses. .......... It may be mentioned that as against the view taken by the Andhra Pradesh High Court in the judgment which is the subject-matter of the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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