IT : Where assessee was in construction business, advertisement, sponsorship and brand-building expenses which were only in nature of selling costs of construction business, would not be capitalized
IT : Expenditure on total renovation of old premise is only capital expenditure
IT : 50 per cent of personnel costs of construction business that included managerial and supervisory costs was to be included in project cost as managerial and supervisory costs for project execution
■■■
[2015] 55 taxmann.com 370 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'F'
Vardhman Developers Ltd.
v.
Income-tax Officer, Ward-2(3)(4), Mumbai*
JOGINDER SINGH, JUDICIAL MEMBER
AND SANJAY ARORA, ACCOUNTANT MEMBER
IT APPEAL NO. 6820 (MUM.) OF 2012
[ASSESSMENT YEAR 2009-10]
FEBRUARY 4, 2015
I - Section 145, of the Income-tax Act, 1961 - Method of accounting - Valuation of stock (Advertisement, Sponsorship and brand-building expenses) - Assessment year 2009-10 - Assessee was in construction business - Whether advertisement, sponsorship and brand-building expenses were only in nature of selling costs which would not, therefore, stand to be capitalized to be included in valuation of work in progress - Held, yes [Para 4] [In favour of assessee]
II - Section 30, read with section 37(1), of the Income-tax Act, 1961 - Rent, rates, taxes, repairs and insurance for buildings (Business expenditure) - Assessment year 2009-10 - Whether expenditure incurred on refurbishment and renovation of an old premise, so as to make it fit for use cannot be classified as 'repairs'; and it is clearly an expenditure in capital field - Held, yes [Para 6] [In favour as revenue]
III - Section 145 of the Income-tax Act, 1961 - Method of accounting - Valuation of stock (Personnel cost Work-in-progress) - Assessment year 2009-10 - Assessee was in construction business - It had some projects which were under progress during year end - Whether managerial and supervisory costs being necessary inputs to project execution, 50 per cent of personnel cost was liable to be included in project cost - Held, yes - Whether since no particulars in respect of rent, rates and taxes were specified by assessee, 20 per cent of such expenditure was to be allocated to WIP toward project overhead cost - Held, yes [Para 8] [Partly in favour of assessee]
__._,_.___
IT : Expenditure on total renovation of old premise is only capital expenditure
IT : 50 per cent of personnel costs of construction business that included managerial and supervisory costs was to be included in project cost as managerial and supervisory costs for project execution
■■■
[2015] 55 taxmann.com 370 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'F'
Vardhman Developers Ltd.
v.
Income-tax Officer, Ward-2(3)(4), Mumbai*
JOGINDER SINGH, JUDICIAL MEMBER
AND SANJAY ARORA, ACCOUNTANT MEMBER
IT APPEAL NO. 6820 (MUM.) OF 2012
[ASSESSMENT YEAR 2009-10]
FEBRUARY 4, 2015
I - Section 145, of the Income-tax Act, 1961 - Method of accounting - Valuation of stock (Advertisement, Sponsorship and brand-building expenses) - Assessment year 2009-10 - Assessee was in construction business - Whether advertisement, sponsorship and brand-building expenses were only in nature of selling costs which would not, therefore, stand to be capitalized to be included in valuation of work in progress - Held, yes [Para 4] [In favour of assessee]
II - Section 30, read with section 37(1), of the Income-tax Act, 1961 - Rent, rates, taxes, repairs and insurance for buildings (Business expenditure) - Assessment year 2009-10 - Whether expenditure incurred on refurbishment and renovation of an old premise, so as to make it fit for use cannot be classified as 'repairs'; and it is clearly an expenditure in capital field - Held, yes [Para 6] [In favour as revenue]
III - Section 145 of the Income-tax Act, 1961 - Method of accounting - Valuation of stock (Personnel cost Work-in-progress) - Assessment year 2009-10 - Assessee was in construction business - It had some projects which were under progress during year end - Whether managerial and supervisory costs being necessary inputs to project execution, 50 per cent of personnel cost was liable to be included in project cost - Held, yes - Whether since no particulars in respect of rent, rates and taxes were specified by assessee, 20 per cent of such expenditure was to be allocated to WIP toward project overhead cost - Held, yes [Para 8] [Partly in favour of assessee]
__._,_.___
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