AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 742
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.... 4,46,984/- of fabric unit of the appellant company. 2. That the ld. CIT(A) has failed to appreciate that the expenses related to business which the appellant company was duly authorized to carry on by its Memorandum of Association and, therefore, there is no justification in rejecting the claim of expenses by treating the same to be in the nature of capital expenses. 3. That the appellant has failed to appreciate that the expenses of Rs. 4,46,984/- relating to fabric unit were fully allowable business deduction as the same were written off since the business could not take off as expected and, therefore, the expenditure was incurred in the course of carrying on of the business and was allowable deduction." 3. Learned A.R. of the asse....
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....usiness and the same cannot be termed as any business not connected to the appellant. The ld. Assessing Officer has treated the expenses related to fabric unit to be expenses of a new line of business separate from the existing business and has proceeded to disallow the expenses and according to him the same is not allowable u/s 37 of the I. T. Act." 7. Before Ld. CIT(A) also, reliance was placed by the Ld. A.R of the assessee on the same judicial pronouncements as has been placed before us. Ld. CIT(A) has considered all the judgments and thereafter decided the issue against the assessee by holding that in the facts of the present case, the expenses in dispute are capital expenditure to start a new line of business and the same are not ....
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....eld by the Hon'ble Guwahati High court that expenses incurred for preparation of feasibility report is Revenue expenditure because no new capital assets has come into existence. In the present case, the true nature of expenses has not been brought on record and therefore, this judgment is not rendering any help to the assessee in the present case. 9. The second judgment cited is a decision of Special Bench of the Tribunal referred in the case of Punjab State Industrial Development Corporation Ltd. Vs. DCIT (Supra). In that case, the facts were that promotion of projects was a major activity of assessee corporation and the expenses incurred on such projects during the implementation stage was charged to the revenue for the year in which the....
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....f raw material even during periods of acute shortage. The expenditure incurred on such project which could not materialize was held to be revenue expenditure by Hon'ble Calcutta High Court in that case. In our considered opinion, the facts of that case are totally different because in that case, the project was in respect of exploring availability of raw material of the existing project and therefore, the new project being setup was not independent of the existing project as in the present case. Therefore, this judgment is also not rendering any help to the assessee in the present case. 11. The next judgment on which reliance has been placed by the Ld. AR of the assessee is a judgment of the Hon'ble Calcutta High Court rendered in the case....
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....h it has shown receipts and offered income there from. In the year under consideration, the assessee had ventured into service industries in fleet management service and providing security products and networking solutions. For the purpose of this service industry, the assessee has entered into a consultancy agreement. The expense in dispute was regarding Rs. 42.36 lakh out of consultancy charges and Rs. 10.00 lacs out of travelling expenses. Under these facts, we find that the consultancy agreement was for such a new line of business which is very closely linked with existing business of trading and transportation service. When the assessee is already in the business of transportation service, fleet management service and providing securit....