ACIT, GURGAON vs. M/S. PLANET EDU PVT. LTD., GURGAON

This appeal by the Revenue arises out of the order dated 22.2.2012 passed by the CIT (A) in relation to the assessment year 2009-10.

The only grievance raised in this appeal is against the deletion of addition of Rs.1,90,04,580/-.

Briefly stated, the facts of the case are that the assessee filed return declaring income of Rs.83,47,980/-. A revised return was filed declaring loss of Rs.95,59,969/-. The return was revised for claiming expenditure of Rs.1,90,04,580/- incurred on Project Edexcel, which was capitalized at the time of filing the original return. In support of this deduction, the assessee submitted that it had, in an effort to show improved results to shareholders/potential investors, etc., allocated various revenue costs such as salary, rent and communication expenses, etc. to Edexcel Project and treated the same as part of fixed assets in the balance sheet, whereas these were actually revenue expenses deductible in full. On being called upon to produce ledger account and relevant bills and vouchers in support of these expenses, the assessee did not tender the same. This resulted into disallowance of Rs.1.90 crore. The ld. CIT(A) deleted the addition.

We have heard the rival submissions and perused the relevant material on record. It is observed that the assessee has made a case before the AO that a sum of Rs.1.90 crore represented revenue expenses which were capitalized by it in its balance sheet by means of window design to show a better profit to its shareholders and other stakeholders.

In the result, the appeal is allowed for statistical purposes.