2014 (1) TMI 949

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.... by the assessee, its grievance is that cost of erection of barricades and maintenance Rs. 52,20,830/- was not allowed to be set off against advertisement income of Rs. 30,60,000/-. 2. Facts apropos are that assessee, engaged in construction of a portion of OMR from Madhya Kailash of Adyar upto Siruseri, was doing the project on build, operate and transfer basis. Expenditure incurred for constr....

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....et a part of the cost of barricades, advertisements were placed thereon. Therefore, as per the assessee, the barricades were necessary expenditure incurred for earning the advertisement income which had to be allowed to be set off. However, the Assessing Officer was not impressed. According to him, barricades erected were only to control vehicular traffic and assessee's business was not to earn re....

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.... for such reduction. Ld. CIT(Appeals) gave a finding that assessee's claim of the expenditure as a business outgo, could not be accepted. 4. Now before us, learned A.R., strongly relying on clause (iii) of Section 57 of Income-tax Act, 1961 (in short 'the Act'), submitted that but for the barricades, advertisement income could not have been earned. Barricades were necessarily used for earning t....

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....rom other sources". As against this, assessee's claim is that expenditure incurred on barricades should not be considered as a part of pre-operative expenditure, but had to be allowed for set-off against advertisement revenue. In our opinion, if the cost of barricades and maintenance are to be considered as a part of pre-operative expenditure, then the income arising out of advertisement placed on....