2011 (2) TMI 1404

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....cept difference in amount. In the Assessment Year 2005-06, the issue relates to deletion of addition of ` 33,21,429/- on account of development expenses and in Assessment Year 2006-07, the amount involved is ` 32,01,030/-. 2. The only issue for consideration, which is common in both the appeals relates to deleting of additions on account of development expenses. The A.O., while completing assessment, disallowed development expenses following his order for the Assessment Year 2003-04. On appeal, Ld. CIT(A) deleted the addition in both the years following the decision of ITAT for the Assessment Year 2002- 03. 3. Before us, when the case come up for hearing, Ld. A.R. for the assessee submitted that the issue is covered by the decision of....

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....ons of each unit and amongst all units of the business as a whole and, thus, it is the claim of the assessee that these are allowable. The Assessing Officer treated them capital expenditure and after allowing depreciation, a sum of `19,49,054/- was added back to the income of the assessee. It was submitted before the Assessing Officer that the CIT(A) has allowed similar claim of the assessee for assessment year 2002-03. However, the A.O. has mentioned that the said order of the CIT(A) has not been accepted by the Revenue and an appeal has been filed against that order. The CIT(A) has admitted the claim of the assessee following the order of the CIT(A) for assessment year 2002-03 and for assessment year 200102. The revenue is aggrieved, henc....

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....lhi High Court in the case of CIT vs. Modi Industries Ltd., 200 ITR 341 has held that the expenditure incurred by the assessee in the year in which the unit had not started working is allowable as a business expenditure since the management of the new unit and the earlier business were the same and there was unit of control and a common fund. It has further been held that the manufacturing of another product is only the extension of assessee's business and not a new business. It is further mentioned that the identical issue came up for consideration before the Income-tax Appellate Tribunal Delhi Bench "E", in the case of Dalmia Cement (Bharat) Ltd., in I.T.A. Nos. 685/Del/97 & 4/Del/97, for assessment year 1991-92, wherein the tribunal has ....