2019 (10) TMI 1573

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....a has erred in law and facts in upholding the contention of the learned A.O. in adding Rs. 44,57,98,668/- under section 35AD of the Income Tax Act, 1961 inspite of complete documents alongwith reason and not rebutting the deduction except stating that no plausible explanation submitted. 2. That the appellant reserves the right to add, amend or delete one or more of the grounds of appeal before the appeal is disposed off. 3. The only grievance of the assessee in this appeal relates to the sustenance of addition of Rs. 44,57,98,668/- made by the A.O. under section 35AD of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). During the course of hearing the Ld. Counsel for the Assessee at the very outset stated that the iss....

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....though the assessee had taken up the construction of warehousing facility during the year which is covered under the specified business, however, in view of the proviso to Section 35AD, the deduction was available to the assessee whose date of commencement of business is on or after 01.04.2009 and since in this case the assessee has existing business of warehousing and hence, it cannot be said that the assessee had commenced the business of warehousing during the year under consideration. He, therefore, disallowed the deduction claimed by the assessee u/s 35AD of the Act. The ld. CIT(A) upheld the above finding of the AO. 11. We have heard the rival contentions. To better understand the case, we deem it fit to first reproduce the p....

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....es operations of his specified business. 13. In our view, the lower authorities have wrongly interpreted the relevant provisions of the Act. There are two parts of the abovesaid provisions. In the first part, it has been mentioned that an assessee is eligible to claim deduction of the capital expenditure if such an expenditure has been incurred wholly and exclusively in a specified business. There is no condition of any date or year of commencement of specified business. However, in the second part, it has been provided that if such an expenditure has been incurred prior to the commencement of business and has been duly capitalized in the books of account, the claim will be allowed in the year in which the assessee commences operat....