APRAAVA RENEWABLE ENERGY PRIVATE LIMITED,NEW DELHI vs. THE ACIT, CIRCLE-1(1)(2), AHMEDABAD

ITA 92/AHD/2026Status: DisposedITAT Ahmedabad13 May 2026AY 2017-1815 pages
AI SummaryAllowed

What were the facts?

The assessee company, engaged in electricity generation, incurred expenses for a new power plant project which was later abandoned. The company wrote off these expenses as 'assets written off' and claimed them as revenue expenditure. The Assessing Officer and the first appellate authority disallowed this claim, treating the expenses as capital in nature.

What did the Tribunal hold?

The Tribunal held that expenses incurred for an abandoned project, even if capitalized as work-in-progress, are revenue in nature if they do not bring into existence any capital asset or enduring benefit. The Tribunal also allowed the claim for amortization of forward cover premium and depreciation on self-propelled vehicles, following previous decisions.

What were the issues?

Whether expenses incurred on an abandoned project are revenue or capital expenditure, and the allowability of amortization of forward cover premium and depreciation.

Which sections of the Income-tax Act were involved?

Section 37,Section 43A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: SHRI TR SETHIL KUMAR & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri S. N. Soparkar, Sr. Advocate
For Respondent: Shri Sher Singh, CIT-DR
Hearing: 15.04.2026Pronounced: 13.05.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order dated 18.11.2025 passed by Addl/JCIT(Appeal)-2 Chennai [hereinafter referred to as ‘Addl. CIT(A)’] for the Assessment Year (A.Y.) 2017-18 in the proceeding u/s. 143(3) of the Income Tax Act.

2.

The brief facts of the case are that the assessee had filed its return of income for A.Y. 2017-18 on 01.11.2017 declaring loss of Rs.5,45,02,286/-. The case was selected for scrutiny under CASS. The Apraava Renewable Energy Private Limited Vs ACIT, AY- 2017-18 2

assessment was completed u/s. 143(3) on 27.12.2019

The order continues below.

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