TaxTMI 
TaxTMI 
2020 (2) TMI 451
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.... in the circumstances of the case and in law, the ld. CIT (A) has erred both in law and on facts in confirming the action of AO in completing the assessment at alleged loss of Rs. 2,75,105/- as against the returned loss of Rs. 55,16,277/-. 2. That the ld. CIT (A) has erred in law and on facts in: 2.1 disallowing expenses amounting to Rs. 52,41,172/- by holding the same to be capital in nature. 2.2 alleging that the appellant has failed to offer any explanation in support of its claim that the expenditure is allowable under section 37(1). 2.3 in affirming the action of AO and not appreciating that the above expenditure, being revenue in nature, is allowable as a deduction under section 37 of the Act." 3....
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....e that the expenses being attributable, to prof it which would lead to enduring benefit ought to be capitalized. Thereafter, when the assessee decided to close down those projects, by some stroke of genius suddenly realized that they were revenue in nature and revised the return. The assessee has taken the plea that they has done so under the advice of their chartered accountant but have not offered the any explanation to why the return was revised would be capital loss and not allowable as revenue expenditure." 5. Therefore, AO held them to be not revenue in nature and disallowed. 6. The ld. CIT (A) confirmed the addition holding that the expenditure was incurred for the proposed new projects. He held that the expen....
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....e incurred in the course of business and allowable deduction u/s 37 of the Act in accordance with the accepted principles of taxation. Accordingly, the said expenditure amounting to Rs. 52,41,172/- incurred in respect of existing/new/proposed projects in the relevant assessment year, was disallowed in the return for assessment year 2012-13 as prior period expenses and the assessee revised the return of income for relevant assessment year on September, 28,2012 to claim thereof. It was argued that the assessee was constantly engaged in meeting potential clients, undertaking negotiations for entering into the contracts with such clients. It is submitted that it is only on account of persistent efforts made by the assessee in the relevant asses....
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.... into as a composite activity of the assessee and the receipts and the expenditure have to be taken compositely. The apportion of the expenditure in a consultancy firm like the assessee against each project is not in tune with the standard accounting practices. This is not a case of construction of buildings or townships wherein the expenditure incurred against each project is considered separately depending upon the method of accounting followed by the assessee. In the instance case, the assessee is in the business of providing consultancy and fund management, financial advisory wherein the expenditure and the revenue has to be taken into account in running accounting methods. We find that the revenue has primarily disallowed this expendit....