Z ESTATE PRIVATE LIMITED,BHUBANESWAR vs. ACIT, CORPORATE CIRCLE-1(2), BHUBANESWAR

आयकर अपीऱीय अधिकरण, “एस.एम.सी” न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH CUTTACK BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER आयकर अपीऱ सं./ITA No.334/CTK/2017 (नििाारण वषा / Assessment Year :2012-2013) Z Estate Private Limited, Vs. The ACIT, Circle-1(2), At-M-4/34, Acharya Vihar, Bhubaneswar Bhubaneswar-751022 स्थायी लेखा सं./जीआइआर सं./ PAN/GIR No. : AAACZ 3063 B (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) .. निर्ााररती की ओर से /Assessee by : Shri D.K.Sheth, AR राजस्व की ओर से /Revenue by : Shri D.K.Pradhan, DR सुनवाई की तारीख / Date of Hearing : 28/12/2017 घोषणा की तारीख/Date of Pronouncement 29/12/2017 आदेश / O R D E R This is an appeal filed by the assessee against the order of the CIT(A)-1, Bhubaneswar, dated 24.05.2017. 2. The sole ground of appeal taken by the assessee is that CIT(A) was erred in confirming the addition of Rs.22,54,682/- made by the AO. 3. Brief facts of the case are that the AO observed that the expenditure of Rs.2,30,95,322/- shown by the assessee during the year was project work in progress and was in the nature of pre-operative expenses which ought to have been capitalized. The expenses are in the nature of deferred revenue expenses for being debited against the income when the same would have arisen. Therefore, he held that the receipts of the assessee on account of interest on fixed deposits of Rs.21,04,410/-, dividend income Rs.28,013/- and miscellaneous income of Rs.1,22,259/- aggregating to total Rs.22,54,682/- was the income from other sources

2 ITA No.334/CTK/2017 and assessed the same accordingly. The assessee carried the matter before the CIT(A) and the CIT(A) confirmed the order of AO. 4. Before me, the only submission of AR of the assessee is that the assessee in its statement of account for the year ended on 31.03.2012 has deducted Rs.22,54,682/- from the total expenditure of Rs.2,53,50,014/- and it carried the balance amount to Rs.2,30,95,332/- in the balance sheet as pre-operative expenses. His submission is that while on the one hand the AO is assessing Rs.22,54,682/- as income of the assessee during the year under the head income from other sources, he is not restoring the pre-operative expenses of the assessee back to its original amount of Rs.2,53,50,014/- and this amounts to double taxation of the same amount. 5. Ld. DR could not controvert the submissions AR of the assessee. 6. In the above back ground of the case, I am of the considered view that the submission of AR of the assessee is correct as per the audited statement of accounts filed before me for the year ended on 31.03.2012, I find that other income shown is at Rs.22,54,682/- and pre-operative expenses are shown at Rs.2,53,50,014/-. The assessee has deducted the other income of Rs.22,54,682/- from its expenditure and carried to net amount of Rs.2,30,95,332/- as pre-operative expenses in its Balance sheet. Therefore, as the other income of Rs.22,54,682/- is brought to tax by the AO as income under the head income from other sources then consequently the pre-operative expenses of the assessee to be carried forward is to be restored to its original amount of Rs.2,53,50,014/-. I,

3 ITA No.334/CTK/2017 therefore, set aside the orders of lower authorities and remand the matter back to the file of AO to re-adjudicate the issue afresh in the light of the discussion made hereinabove after allowing reasonable and proper opportunity of hearing to the assessee. 7. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on this 29/12/2017. Sd/- (N. S. SAINI) ऱेखा सदस्य / ACCOUNTANT MEMBER कटक Cuttack; ददनांक Dated 29/12/2017 प्र.कु.मम/PKM, Senior Private Secretary आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : 1. Z Estate Private Limited, At-M-4/34, Acharya Vihar, Bhubaneswar-751022 प्रत्यथी / The Respondent- 2. ACIT, Corp. Circle-1(2), Bhubaneswar 3. आयकर आयुक्त(अपील) / The CIT(A), आदेशािुसार/ BY ORDER, आयकर आयुक्त / CIT 4. निभागीय प्रनतनिनर्, आयकर अपीलीय अनर्करण, कटक / DR, ITAT, Cuttack 5. गार्ड फाईऱ / Guard file. 6. (Senior Private Secretary) सत्यापपत प्रतत //True Copy// आयकर अपीऱीय अधिकरण, कटक / ITAT, Cuttack