9911796707
TMI Blog2023 (8) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the assessee. This shows that in the books of account the expenditure have been wrongly capitalized by the assessee. Though we fully agree with the learned assessing officer that the guiding principles classifying the expenditure as revenue on as a capital expenditure cannot be different for the books of account of the assessee and to claim as deduction in the income tax return. The video shooting expenditure does not give any enduring benefit to the assessee. Therefore, the above expenditure may be wrongly capitalized in the books of account. However for the income tax purposes, the learned dispute resolution panel after considering the facts of the case held that the same is revenue expenditure. The learned departmental represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sented by IRP, wherein the return of income of the assessee field on 30th November, 2011 at a total income of ₹86,23,89,109/- is assessed at ₹97,95,23,830/-. 02. There are only two disputes in this appeal. 03. First dispute is with respect to the video shooting expenses of ₹3,33,41,372/-, claimed by the assessee as revenue expenditure in the computation of income but capitalized into the books of accounts and shown in the balance sheet. The learned Assessing Officer made the addition of the same in the draft assessment order dated 9th March, 2015. On objections before the learned Dispute Resolution Panel, the learned Assessing Officer was directed to delete the addition. Therefore, no addition was made in the final a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account the expenses are capitalized whereas in the computation of total income, it was treated as revenue expenditure. The learned Assessing Officer disallowed the same and held it to be capital expenditure. The learned Assessing Officer was of the view that revenue expenditure or capital expenditure is not defined under the Income Tax Act. It is a matter of common understanding under certain principles that there cannot be an item of expenditure which is accounted for as capital expenditure in books of accounts and treated as revenue expenditure in the Income Tax Act. He was of the view that the same principles apply under the Income Tax Act, as well as the Companies Act to treat the expenditure as capital or revenue. Accordingly, he dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure is allowable to the assessee. This shows that in the books of account the expenditure have been wrongly capitalized by the assessee. Though we fully agree with the learned assessing officer that the guiding principles classifying the expenditure as revenue on as a capital expenditure cannot be different for the books of account of the assessee and to claim as deduction in the income tax return. The video shooting expenditure does not give any enduring benefit to the assessee. Therefore, the above expenditure may be wrongly capitalized in the books of account. However for the income tax purposes, the learned dispute resolution panel after considering the facts of the case held that the same is revenue expenditure. The learned departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emium account should be allowed as deduction under Section 37(1) of the Act is the funds raised by the assessee by issue of nonconvertible debentures is used for the working capital and therefore takes the character of expenditure incurred for raising of the funds for the working capital and hence allowable as deduction under section 37 (1) of the act. The learned Assessing Officer once again for the similar reason as given for disallowance of video shooting expenditure held that the claim of the assessee is different in the books of account and in the computation of total income. At one time, place in the books of account, the claim of the assessee is that it is a capital expenditure whereas in the income tax return it is claiming as reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l contentions and find that there is no infirmity in the order of the learned Dispute Resolution Panel. The learned Dispute Resolution Panel has categorically held that expenditures incurred on issue of non-convertible debentures are similar to the expenditure incurred as interest on non-convertible debentures. The learned Dispute Resolution Panel has further restricted disallowances of such expenditure to the extent of proportionate amount invested in fixed assets which have not been put to use during the year. The learned Assessing Officer could not show any infirmity in the order of the learned Dispute Resolution Panel. Further, apparently the accounting treatment given by the assessee by reducing share premium account by expenditure inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
