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TMI Blog2022 (6) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 before the appeal hearing." 3. Briefly, the facts of the case are that the appellant is a private limited company incorporated under the provisions of the Companies Act, 1956. It is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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. Asahi India Safety Glass, 15 taxmann.com 382 (Delhi) and the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Oriental Carpet Manufactures (India) P. Ltd., 86 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 8. On the other hand, ld. CIT-DR placed reliance on the orders of the lower authorities. 9. We heard the rival submissions and perused the material on record. The issue in the present appeal rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity 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 of the said judgment of the Hon'ble Supreme Court is as under :- "It would appear from the above that the accepted accountancy rule for determining the cost of fixed assets is to include all expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital. 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, three other High Courts have taken the contrary view and have held that interest paid in such circumstances can be capitalised and included in the actual cost of the machinery and plant. The decision of the Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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