2025 (2) TMI 1450

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....ase are that the Assessee is a Private Limited Company engaged in the business of providing software management consultancy and manpower outsourcing. The return of income for the impugned order was filed on 28.11.2014 declaring loss of Rs. 46,83,800/- under Income tax proceedings and book profit of Rs. 12,20,223/- u/s 115JB of the Act. The case of the assessee was selected for scrutiny and vide orders passed u/s 143(3) of the Act dated 15.12.2016 the total income of the assessee was assessed at Rs. 22,14,227/- by making disallowance u/s 40(a)(ia) of the Act of Rs. 3,23,910/- and further disallowance of Rs. 65,73,917/- out of Courseware Development Charges claimed by the assessee. In first appeal vide impugned order dated 27.02.2019 the Ld. ....

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....counts does not determine the allowability of expenditure in computation of total income as provision of Income-tax Act, 1961." 4. Since all the grounds of appeal are in relation to the disallowance of Rs. 65,73,917/- made out of Courseware Development Expenses therefore they are taken together for consideration. 5. Before us the Ld. AR of the assessee submitted that assessee has entered into a MOU with Rama Krishna Mission according to which training was to be imparted to its students so as to enable them to get better employment opportunities. The assessee in order to develop the coaching facilities for such training purpose, had started expansion in its centre by setting up fresh training facilities. For this purpose various expens....

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....in its books of account have shown the said amount as capital work in progress by treating the same as capital expenditure. He further submitted that the auditor in the notes on accounts has observed that the expenditure is towards the starting of new line of business i.e. training Institutions in Information security. The auditor further observed in note no. 2.19 that a proposal is to be submitted to National Skills Development Corporation for accreditation of the training course of information society and the Revenue is expected to generate in FY 2014-15 i.e. in subsequent assessment year. According to Ld. DR when assessee itself had observed that the income is to be generated in subsequent years how the expense could be allowed as revenu....