2020 (10) TMI 648

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....llowance of Rs. 65,86,224 being office, administrative costs and other relevant expenses as prior period expenses by holding that in order to claim the expenditure as deduction, it is necessary to declare income under the provisions of Chapter XIV-C of the Act. 3. The brief facts of the case are that the AO noticed that assessee has not declared any income from business operations, whereas it has claimed other expenditure and loss at Rs. 65,86,224. As expenditure was claimed without declaring any income and claiming loss, the claim was not allowed by the AO within the meaning of section 28 while computing income u/s. 29 of the Act. Therefore the entire amount of expenditure of Rs. 65,86,244 to the extent of loss claimed was disallowed. ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on. Bombay High Court-26 ITR 151 4 ESPN Software India (P.) Ltd [2009]-Hon. Delhi High Court- 184 TAXMAN 452 5      Saurashtra Cement & Chemical Industries Ltd. [1973R-ion. Gujarat High Court- 91 ITR 170 6 Dhoomketu Builders & Development (P.) Ltd. [2013]-Hon. Delhi Court-34 taxmann.com 18 7 UE Development India (P.) Ltd. [2013]-Hon. Bangalore ITAT- 35taxmann.com 607 6. We have heard the parties and perused the record. In our opinion, there is merit in the plea of assessee. The Hon'ble Delhi High Court in the case of CIT v. Dhoomketu Builders & Development (P) Ltd., 34 taxmann.com 18 (Delhi) has held that having regard to the business of the assessee, which is the development of real estates, the pa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....et-up and it was ready to commence business. The revenue would, however, state that till the land is acquired, the business is not set-up. The difficulty in accepting the argument is that an assessee may not be successful in acquiring land for long period of time though he is ready to commence his business in real estate, and that would result in the expenses incurred by him throughout that period not being computed as a loss under the head 'Business' on the ground that he is yet to set-up his business. That would be an unacceptable position. The other argument of the revenue that the tax auditors of the assessee have themselves pointed out that the assessee is yet to commence its business is also relevant because of the distinction....