Expenses for pre-capitalization cost on the expansion of business is revenue expenditure

Last updated: 04 August 2021
Quick Summary
The Income Tax Appellate Tribunal ruled that expenses incurred for pre-capitalisation costs related to business expansion should be treated as revenue expenditure. The assessee company, involved in real estate development, had claimed professional expenses for a planned hotel chain project in the UK. The tribunal's decision clarifies the tax treatment of such costs, distinguishing them from capital expenditure.

Court :
ITAT Chandigarh

Brief :
The Revenue has filed the present appeal against the order dated 30.11.2018 passed by Commissioner of Income Tax (Appeals), Shimla [for short ’the CIT(A)’] for the assessment year 2013-14, whereby the Ld. CIT(A) has allowed the appeal filed by the assessee against the assessment order passed u/s 143(3) of the Income Tax Act, 1961 [for short ’the Act’].

Citation :
ITA No. 143/CHD/2019

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