TaxTMI 
TaxTMI 
2014 (6) TMI 226
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....Having heard counsel for the parties, we are inclined to frame the following substantial question of law:- Whether the Income Tax Appellate Tribunal was right in holding that expenses incurred by the appellant assessee in respect of the project should be capitalized?? 3. With the consent of the parties, the appeal is taken up for hearing today itself. 4. The appellant for the Assessment Year 2008-09 had filed return on 26.08.2009 declaring nil income. They had claimed expenses of Rs.32,33,814 and had shown interest income and miscellaneous receipts, but no business income. The assessment order records that the assessee had shown closing stock of land of Rs.12,91,08,447/-, an in....
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....e development, bank guarantee, process charging paid to the bank etc. Apart from development of this project, it has not carried out any other business. It itself is capitalizing the expenses which are relatable to the project. No doubt, the business of the assessee has been set up. It is entitled for the expenses which are necessary for day to day business activity of the assessee but the expenses which are relatable to the project for which assessee itself capitalizing the expenses such expenses are to be capitalized. From the analysis of the details, it revealed that assessee has a interest income. It has worked out the loss by claiming certain expense equivalent to the interest income so that both can be set off. In our opinion, after t....
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....We find merit in the contention raised and submission made by the Senior Standing Counsel. It is the case of the appellant that they were/are engaged in the real estate development business and had undertaken development of the project. It has to be examined whether the expenditure incurred on development of the project should be taxed by applying Accounting Standard No.7 and in case, the said Accounting Standard has not been followed, the effect thereof has to be ascertained and considered. The said exercise has not been undertaken in this case. Tribunal in the impugned order without dwelling on the said aspect, held that the expenditure was capital, as corresponding income from the project was not recorded or brought to tax. 11. Learned ....