Expenditure Incurred After Set-Up of Business Is Allowable As Deduction, Even If No Business Income Is Earned By The Assessee : ITAT Chennai
2 years, 5 months ago

Expenditure Incurred After Set-Up of Business Is Allowable As Deduction, Even If No Business Income Is Earned By The Assessee : ITAT Chennai

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The Chennai Bench of ITAT has ruled that once the business of an assessee is set-up, all the expenditure incurred by it would be allowable as deduction, notwithstanding the fact that no business income was earned by the assessee during the relevant year. The assessee RBL Hotels submitted before the ITAT that it had duly set-up its business during the relevant year and therefore, the business expenditure incurred by it should be allowed as deduction. The ITAT held that, as a corollary, if the business of an assessee was set-up, all the expenditure incurred by the assessee would be allowable as deduction notwithstanding the fact that no business income was earned by it during the relevant year. The ITAT added that once the business is held to be set-up, the business expenditure incurred by the assessee would be available as deduction. Therefore, the ITAT ruled that the assessee's business was already set-up during the relevant assessment year and thus, the business expenditure claimed by it should be allowed as deduction.

Business Income Revenue Held Deduction Ruled Itat Assessee Relevant Its Business Expenditure Incurred No Business Income Rbl Hotels  earned  revenue  chennai  held  income  assessee  itat  expenditure  incurred  business  deduction  ruled  relevant  setup

History of this topic

Software Expenses Are 'Revenue In Nature' If Fixed Capital Did Not Undergo Any Change Consequent To Acquisition Of Licensed Software: Mumbai ITAT
4 months ago

Software Expenses Are 'Revenue In Nature' If Fixed Capital Did Not Undergo Any Change Consequent To Acquisition Of Licensed Software: Mumbai ITAT

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Referring to the decision in case of DCIT v/s M/s First Advantage Private Limited, the Mumbai ITAT held that software license expenses incurred by assessee to carry out its routine operations in a more efficient manner, has to be treated as revenue expenditure. The Bench found that the taxability of software license expenditure was decided in favour of assessee by …

Income Tax Deduction Allowable To Interest Income 'Attributable' To Cottage Industry Business: ITAT
4 months ago

Income Tax Deduction Allowable To Interest Income 'Attributable' To Cottage Industry Business: ITAT

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The Chennai bench of Income Tax Appellate Tribunal has held that the income tax deduction allowable to interest income 'attributable' to cottage industry business.The bench of S.S. Viswanethra Ravi and S. R. Raghunatha has observed that the assessee is a 'cottage industry' and the interest income earned by the assessee is in its regular course of. The Chennai bench of …

Income Tax Act Doesn't Mandate That Specific Money Deposited In Capital Gain Account Scheme Shall Be Utilized Towards New Investment: Chennai ITAT
7 months, 3 weeks ago

Income Tax Act Doesn't Mandate That Specific Money Deposited In Capital Gain Account Scheme Shall Be Utilized Towards New Investment: Chennai ITAT

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The Chennai ITAT held that there is no requirement that specific money as deposited in capital gain account scheme should be utilized towards new investment, and the assessee may make investment from other funds as available with him and the same would not jeopardize the claim of the assessee. Referring to the decision of Sohanlal Mohanlal Bhandari vs. ACIT, the …

Only Requirement To Be Fulfilled For Claiming Expenses U/s 57(Iii) Is That They Must Be Incurred Wholly For Earning Income From Other Sources: Ahmedabad ITAT
7 months, 3 weeks ago

Only Requirement To Be Fulfilled For Claiming Expenses U/s 57(Iii) Is That They Must Be Incurred Wholly For Earning Income From Other Sources: Ahmedabad ITAT

Live Law  

The Ahmedabad ITAT held that in the absence of the Assessing Officer pointing out as to how despite the assessee's explanation, there was no nexus between the interest-bearing funds and their utilization for making advances for earning interest income, no disallowance u/s 57 of the Income tax Act was tenable. The ITAT explained that the only requirement to be fulfilled …

Once ITO Accepted Income Earned Which Is Totally Based Upon Depreciation Plus 15% Markup, There Is No Reason To Deny Cost: Delhi ITAT
9 months, 1 week ago

Once ITO Accepted Income Earned Which Is Totally Based Upon Depreciation Plus 15% Markup, There Is No Reason To Deny Cost: Delhi ITAT

Live Law  

Finding that the assessee had arrangement with its AE for billing cost plus 15%, which has been duly billed during the year and entire depreciation cost plus 15% has been billed to the AE, the New Delhi ITAT allowed the depreciation claimed by assessee. The Bench of Shamim Yahya and Challa Nagendra Prasad observed that “When the Revenue is accepting …

Income Tax Authorities Can’t Step Into Shoes Of Businessmen To Determine Expenditure For Business Purpose: ITAT
1 year, 1 month ago

Income Tax Authorities Can’t Step Into Shoes Of Businessmen To Determine Expenditure For Business Purpose: ITAT

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The Delhi Bench of Income Tax Appellate Tribunal has held that income tax authorities cannot step into the shoes of businessmen to determine how much expenditure should have been incurred for the purpose of business.The bench of Astha Chandra and B. R. R. Kumar has observed that activities clearly demonstrate that the assessee had incurred expenses. The Delhi Bench of …

Department Can Bring Expenditure Incurred In Earlier Years To Be Taxed In Subsequent Years On Grounds Of Bogus Expenditure: ITAT
1 year, 7 months ago

Department Can Bring Expenditure Incurred In Earlier Years To Be Taxed In Subsequent Years On Grounds Of Bogus Expenditure: ITAT

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The Delhi Bench of the Income Tax Appellate Tribunal has observed that the department can bring expenditures incurred in earlier years to be taxed in subsequent years on grounds of bogus expenditure.The bench of B. R. R. Kumar has observed that the department can bring the expenditure incurred in the earlier years to be taxed in the subsequent years if …

ITAT Bangalore Holds Expenditure Incurred By Flipkart Towards ESOP Is Eligible For Deduction Under S. 37 Of ITA
1 year, 9 months ago

ITAT Bangalore Holds Expenditure Incurred By Flipkart Towards ESOP Is Eligible For Deduction Under S. 37 Of ITA

Live Law  

The Bangalore Bench of the Income Tax Appellate Tribunal has allowed the appeal of Flipkart India against disallowance of over Rs.15.5 Crore of expenses claimed by it under Section 37 of the Income Tax Act, 1961, towards Employee Stock Ownership Plan. Flipkart pleaded before the ITAT that the CIT had erred in confirming the disallowance of the expenditure incurred on …

Deduction For Telecommunication Services of ' Vodafone' Is Available For "Profits Of Eligible Business": ITAT
2 years ago

Deduction For Telecommunication Services of ' Vodafone' Is Available For "Profits Of Eligible Business": ITAT

Live Law  

The Mumbai Bench of the Income Tax Appellate Tribunal, while allowing deduction to Vodafone, held that deduction for telecommunication services is available in respect of "profits of eligible businesses" and is not restricted to "profits derived from eligible businesses. The Mumbai Bench of the Income Tax Appellate Tribunal, while allowing deduction to Vodafone, held that deduction for telecommunication services is …

Expenses Towards Advertisement, Brokerage And Commission, Incurred By A Real Estate Developer; Deductible As Revenue Expenditure: Delhi High Court
2 years, 1 month ago

Expenses Towards Advertisement, Brokerage And Commission, Incurred By A Real Estate Developer; Deductible As Revenue Expenditure: Delhi High Court

Live Law  

The Delhi High Court has ruled that The bench of Justices Manmohan and Manmeet Pritam Singh Arora observed that the dispute involving the year of deduction, which was sought to be postponed by the revenue department, was revenue neutral, having no tax affect and that it did not put the revenue department at any disadvantageous position. The Court noted that …

Failure Of Assessee To Give Proper Reasons For Not Appearing Before The Tax Authorities: ITAT Imposes Cost
2 years, 6 months ago

Failure Of Assessee To Give Proper Reasons For Not Appearing Before The Tax Authorities: ITAT Imposes Cost

Live Law  

The Banglore Bench of the Income Tax Appellate Tribunal consisting of B.R. Baskaran has imposed a cost of Rs.10,000 on the assessee for the failure to give proper reasons for not appearing before the tax authorities. The ITAT noted that CIT had passed the ex-parte order without hearing the assessee since the assessee had not appeared before him despite being …

Subscription Money Received In Advance By DTH Operators Is Taxable Only When Services Are Provided To The Subscribers: Chennai ITAT
2 years, 7 months ago

Subscription Money Received In Advance By DTH Operators Is Taxable Only When Services Are Provided To The Subscribers: Chennai ITAT

Live Law  

The Chennai Bench of ITAT has ruled that subscription money received in advance by the DTH operators is not taxable. The CIT observed that the Chennai Bench of the ITAT in the case of ACIT versus M/s Sun TV Network Ltd, on an identical issue, had observed that there was no illegality or irregularity in the methodology adopted by the …

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