The Tax Publishers2020 TaxPub(DT) 5223 (Chd-Trib)

INCOME TAX ACT, 1961

Section 37(1)

Demarcation/survey expenses were revenue expenditure as held by Tribunal in a case having similar issue where it was held that plots have to be physically marked before handing over to the allottees which require proper survey and lining of contours. Since the allotment of plots is a regular and recurring activity so as the expenses incurred, hence the expenses are to be allowed as revenue expenditure

Business expenditure - Demarcation/survey expenses - Revenue or capital expenditure -

Issue arose for consideration as to whether CIT(A) was right in law in holding the demarcation/survey expenses are revenue expenditure ignoring the material aspect that the plots are handed over immediately after allotment itself and the expenditure thus cannot be said to be relatable to completed projects. Held: CIT(A) deleted the disallowance made by AO while relying upon the decision of the Tribunal in M/s. Haryana Urban Development Authority v. The Addl. CIT, The DCIT Panchkula Range Panchkula and Vice-Versa. [ITA Nos. 623, 624, 625, 1061, 516, 517, 518, 544/CHD/2011, 15 & 17, 255, 256/CHD/2016, 640, 414, 641, 642, 1075, 415, 472, 473, 474, 548/CHD/2011, 12, 15 & 17, ITA Nos. 471, 235 & 236/CHD/2015 & 2016, dt. 6-2-2018], wherein it was held that survey and demarcation is an ongoing, continuous exercise being undertaken by the assessee and plots have to be physically marked before handing over to the allottees which require proper survey and lining of contours. Since the allotment of plots was a regular and recurring activity so as the expenses incurred, hence the expenses were to be allowed as revenue expenditure. This issue is, thus, squarely covered by said decision of the Tribunal and deduction was to be allowed

Followed:M/s. Haryana Urban Development Authority v. The Addl. CIT, The DCIT Panchkula Range Panchkula and Vice-Versa. [ITA Nos. 623, 624, 625, 1061, 516, 517, 518, 544/CHD/2011, 15 & 17, 255, 256/CHD/2016, 640, 414, 641, 642, 1075, 415, 472, 473, 474, 548/CHD/2011, 12, 15 & 17, ITA Nos. 471, 235 & 236/CHD/2015 & 2016, dt. 6-2-2018]

REFERRED :

FAVOUR : In assessee's favour

A.Y. :


INCOME TAX ACT, 1961

Section 37(1)

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