M/s. Atlanta Global Real Est. India (P) Ltd., Baroda V. The Dy.CIT, Circle-1(1), Baroda

ITA 1882/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8361 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 23-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P PATHAK

Judgement Text

, *MH* *MH* *MH* *MH* IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW;] ] ] ] U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 1882/AHD/2015 ( / ASSESSMENT YEAR : 2011-12) M/S. ATLANTA GLOBAL REAL EST. INDIA PVT. LTD., B-9, 2 ND FLOOR, VANDEMATRAM FLAT 42/1, ARUNODAY SOCIETY, ALKAPURI, BARODA. / VS. DCIT, CIRCLE 1(1), BARODA. ./ ./ PAN/GIR NO. : AAGCA 3046 D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SUNIL TALATI, A.R. / RESPONDENT BY : SHRI O. P. PATHAK, SR.D.R / DATE OF HEARING 02/05/2018 !'# / DATE OF PRONOUNCEMENT 09/05/2018 $% / O R D E R PER PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, VADODARA [CIT(A) IN SHORT] DATED 28/04/2015 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 26/03/2014 RELEVANT TO ASSESSMENT YEAR (AY) 2011-12. ITA NO.1882/AHD /2015 M/S. ATLANTA GLOBAL REAL EST. INDIA PVT. LTD. VS. D CIT ASST. YEAR 2011-12 - 2 - 2. THE ASSESSEE IN THE CAPTIONED APPEAL HAS DISPUTE D THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.2,0 2,017/- OUT OF RS.2,37,295/-, TREATING THE SAME TO BE OF CAPITAL N ATURE ALLEGEDLY IN DISREGARD OF PROVISIONS OF SECTION 35D OF THE ACT. 3. BRIEFLY STATED, THE ASSESSING OFFICER IN THE COU RSE OF THE SCRUTINY ASSESSMENT OBSERVED THAT THE ASSESSEE HAS WRONGLY C LAIMED DEDUCTION OF RS.2,02,017/- ON ACCOUNT OF PRELIMINARY EXPENSES WR ITTEN OFF AND ANOTHER AMOUNT OF RS.35,278/- TOWARDS PRE-INCORPORATION EXP ENSES. THE AO DREW INFERENCE AGAINST THE ASSESSEE, ON THE GROUND THAT THE AUDITOR'S REPORT IN FORM NO 3CD DOES NOT PERMIT AMORTIZATION OF SUCH EX PENSES. THE AGGREGATE AMOUNT OF RS.2,37,295/- WAS THUS DISALLOW ED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A) FOUND MERIT IN THE CLAIM OF EXPENSES TO THE EXTENT OF RS.35,278/- TOWARDS PRE-INCORPORATION EXPENSES AND THUS ALLOWED THE AFORESAID AMOUNT. HOWEVER, WITH REGARD TO THE PRE-OPERATIVE EXPENSES OF RS.2,02,017/-, THE CIT(A) DID NOT FIND ANY GOOD RE ASON TO REVERSE THE ACTION OF THE AO AND TO ALLOW THE CLAIM OF AMORTIZA TION OF EXPENDITURE IN TERMS OF SECTION 35D OF THE ACT. ITA NO.1882/AHD /2015 M/S. ATLANTA GLOBAL REAL EST. INDIA PVT. LTD. VS. D CIT ASST. YEAR 2011-12 - 3 - 5. FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 6. THE LD. AR FOR THE ASSESSEE MR. SUNIL TALATI SUB MITTED AT THE OUTSET THAT THE DISALLOWANCE IN QUESTION OF RS.2,02 ,017/- MAINLY COMPRISES OF AMOUNT DEPOSITED WITH THE REGISTRAR OF COMPANIES TOWARDS INCORPORATION AND OTHER INCIDENTAL EXPENSES SUCH AS PRINTING OF MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATI ON AND STAMPING CHARGES ETC. HE THUS SUBMITTED THAT MERELY ON ACCOU NT OF DELINQUENCY ON THE PART OF THE TAX AUDITOR IN NOT COMMENTING ON IT S ALLOWABILITY, THE EXPENDITURE WHICH IS OTHERWISE PERMISSIBLE IN LAW, CANNOT BE DENIED TO THE ASSESSEE. 7. THE LD. DR RELIED UPON THE ORDER OF THE AUTHORIT IES BELOW. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO N AND PERUSED THE ORDER OF THE AUTHORITIES BELOW. IT IS APPARENT THA T THE EXPENSES INCURRED TOWARDS FILING FEES, STAMP DUTY, PRINTING CHARGES OF MEMORANDUM OF ASSOCIATION ETC., ARE CLEARLY AMORTIZABLE EXPENDITU RE WITHIN THE SPHERE OF SECTION 35D OF THE ACT. THE REVENUE HAS NOT DISPUTE D ANY OTHER ASPECT OF SECTION 35D FOR ALLEGED INELIGIBILITY. WE THUS FIND MERIT IN THE PLEA OF THE ASSESSEE FOR ALLOWABILITY OF AMORTIZATION OF EXPEND ITURE AS CLAIMED. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO D ELETE THE DISALLOWANCE ON THIS SCORE. ITA NO.1882/AHD /2015 M/S. ATLANTA GLOBAL REAL EST. INDIA PVT. LTD. VS. D CIT ASST. YEAR 2011-12 - 4 - 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 09/05/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; IZNHI DQEKJ DSFM ;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (MADHUMITA ROY) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 09/05/2018 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)- 1, VADODARA. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 03/05/2018 (DICTATION-PAD 3 PAGE S ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04/05/2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER