2022 (2) TMI 696

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....5. The grounds raised by the assessee read as under:- 1. The order of the Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case. 2. The Commissioner of Income tax (Appeals) erred in holding that business has not commenced. 3. The CIT(A) ought to have appreciated that the appellant has incurred expenditure for project related activities and also incurred other fixed administrative costs. These fixed costs are administrative in nature required for running the business but not related to construction activities and there will not be any revenue corresponding to these activities as they are administrative in nature. Hence these expenses are allowed to be claimed. The Commissioner....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s and capitalized under the head inventories. The Ld. AO held an opinion that though the assessee did not generate any business income but claimed the construction expenses in the computation of income. It was submitted by the assessee that the expenditure incurred for project development was capitalized under work-in-progress which would be claimed in the year in which the project would be completed. However, for income tax purposes, since these expenditures are revenue in nature, the same has been claimed as per consistent method of accounting as followed in earlier years. In other words, the expenditures are to be claimed in the year in which the same has actually been incurred whereas income would be offered to tax in the year of receip....