ADANI LOGISTICS LTD. ( FORMERLY KNOWN AS INLAND CONWARE PVT. LTD.),,AHMEDABAD vs. THE DY.CIT.,CIRCLE-1,, AHMEDABAD

In the first ground of appeal, grievance of the assessee is that the ld.CIT(A) has erred in confirming addition at Rs.20,67,444/-.

Brief facts of the case are that the assessee has filed its return of income on 23.9.2011 declaring total loss at Rs.21,73,29,993/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued by the AO. On scrutiny of the accounts it revealed to the AO that

With the assistance of the ld.representatives, we have gone through the record carefully. The case of the assessee is that it is engaged in the business in providing logistic services for the purpose of carrying business on the land acquired in earlier years, it has incurred professional charges for work like documentation, approval pertaining to changes of land use from office of Town and Country Planning etc. The ld.CIT(A) on an analysis of these details recorded a finding that the assessee failed to establish that land on which the above expenditure was incurred was to be used for business purpose. According to the ld.CIT(A) any expenditure incurred by an assessee until the asset being put to use for business purpose is to be capitalized. After considering the finding of the ld.CIT(A) we are of the view that the assessee failed to demonstrate as to how these expenditure are of revenue in nature. The assessee has not used the above land for the purpose of business in this year. We do not find any error in the finding of ld.CIT(A), hence, this ground of appeal is rejected.

In ground no.2, grievance of the assessee is that the ld.CIT(A) has erred in confirming disallowance of Rs.5,47,438/-.

With the assistance of the ld.representatives, we have gone through the record carefully. It emerges out from the record that the assessee failed to

In the next ground of appeal, grievance of the assessee is that the ld.CIT(A) has erred in confirming disallowance of 2,61,960/-.

Brief facts of the case are that the assessee has claimed deduction of Rs.2,61,960/- under section 35D of the Act. The ld.AO while making disallowance observed that expenditure was incurred for increase in authorized share capital. The ld.AO further put reliance upon the decision of the Hon’ble Delhi High Court in the case of CIT Vs.Hindustan Insecticides Ltd., 250 ITR 338 where is held that expenses incurred for increasing the authorized share capital are not covered by the provisions of section 35D(2) of the Act and thus, the same are not allowable under section 35D of the Act. On appeal, the ld.CIT(A) upheld the disallowance.

Before us, the ld.counsel for the assessee contended this is the fifth year of claim. In the earlier four years, expenditure has been allowed. The assessee amortized expenditure for five years and claimed one-fifth each. The ld.CIT(A) has not disputed this fact also. The ld.DR on the other hand contended that since claim is not admissible inherently, it cannot be allowed to the assessee on the basis that in earlier year it was granted.

On due consideration of the above facts of the case, we are of the view that since the amortized expenditure was allowed in the earlier four years, it

In the result, appeal of the assessee is partly allowed.