COMMISSIONER Vs. T. G. BUILDWELL PVT.LTD

JUDGEMENT

(1.) THIS appeal by the Revenue under Section 260A of the Income Tax Act, 1961 ('Act', for short) impugns order dated 26.12.2013 passed by the Income Tax Appellate Tribunal (Tribunal, in short) in the case of T.G. Buildwell Pvt. Ltd. in relation to the assessment year 2009 -10.

(2.) THE contention of Revenue as stated in the appeal is that the expenditure incurred by the respondent assessee of Rs.4,29,06,605/ - on the Tivoli Holyday Village Project should have been capitalized. It is submitted that the project was at the initial stage and the expenditure should be treated as pre -operative expenditure. Reliance is placed on the fact that the assessee had agreed that the advertisement expenditure of Rs.32,026,589/ - should be capitalized. In the assessment order dated 19.12.2011 the Assessing Officer while dealing with the issue in question had observed and held as under: -

(3.) ON the other hand, there is a contradiction in the finding of the Assessing Officer, who has recorded that the assessee had received receipts to the tune of Rs.65,66,199/ - and had also incurred expenditure of Rs.5,01,19,431/ -. More affirmatively, it stands recorded that the project was at initial stage i.e. the projected had started and commenced. The contention of the assessee that Accounting Standard 7 was not applicable at the said stage was specifically raised in the letter written by the respondent -assessee to the Assessing Officer but has not been dealt with in the assessment order. The Assessing Officer also did not invoke and compute the income of respondent assessee by applying Accounting Standard 7 or hold that the assessee was wrong in applying Accounting Standard 2 in the present case. Income was not computed by the Assessing Officer by applying Accounting Standard 7.