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| The Tax Publishers2019 TaxPub(DT) 5259 (Mum-Trib) INCOME TAX ACT, 1961
Section 37(1)
Merely for the reason that assessee had shown some revenue from road transport/sea transport, that too from its group company, it could not be said that assessee's main business of infrastructural development had been set up especially when assessee was in process of acquisition of land at various places and had capitalized all direct and indirect expenses, including finance cost incurred for development of projects, therefore, expenditure debited to profit and loss account could not be allowed as deductible under section 37(1).
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Business expenditure - Allowability - Assessee not having set up main business activity -
Assessee-company claimed deduction of various expenses under section 37(1). AO disallowed deduction on the ground that business of assessee, i.e., development of infrastructure projects had not been set up. Assessee challenged this on the ground that it had shown income from operations in the form of road transport and sea transport from a group company of assessee.Held: Merely for the reason that assessee had shown some revenue from road transport/sea transport, that too from its group company, it could not be said that assessee's main business of infrastructural development had been set up, especially when assessee was in process of acquisition of land at various places and had capitalized all direct and indirect expenses, including finance cost incurred for development of projects, therefore, expenditure debited to profit and loss account could not be allowed as deductible under section 37(1).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11 to 2014-15
INCOME TAX ACT, 1961
Section 14A
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