Assessee “A” is an Individual engaged in the business of construction.
Assessee is owner of land which is held as stock in trade having potential of 120000 sq. Ft saleable aera.
He was in search of person who is having knowledge of development of big project and also have infrastructure as well as funds say “B”
Both the parties “A and B” enter in to partnership to develop the said project in the year 2017.
A is going to introduced the land in the firm and B is going to invest funds as well as his infrastructure for development as well as obtaining  sanction and liasoning with Govt authorities. A separate POA will be given in the name of person belonging to B for doing all liasoning work.
Both the parties have agreed that Party B will be given 20% of sales of the project as his profit and the balance profit will be distributed between A And B in the ratio of 98%: 2%.
Deed also provide for clause of retirement and in such situation, it will be done on the Fair market price of the project.
Party B has obtained all the sanctions which are require for the project and also started the construction of the project and did the investment of almost 4 crs.
However the party A is not happy with the speed of construction implemented by B and due witch they can not sale any unit of the project.
Therefore they decided to separate and as per plan party A is going to introduced Party C as new partner and Party B is  retire from the firm in the year 2018-19.
Since the project has not developed, both the parties have agreed that Party B will be given the capital introduced by B of Rs 4 CR  and further exist cost of 5 crore for obtaining all sanctions and approval of the project and doing initial construction of the project and for canceling the POA given.
Partnership firm claimed the the exist amount of Rs. 5 crore as revenue expenditure on the ground that party B has obtained all sanctions and approval, for cancelling POA and for taking smooth control of the project and therefore it is cost given for rights for property and therefore included in the Work in progress.
In the Assessment For A. Y. 2019-20 has held that the exist cost given to retiring partner is capital receipt and not revenue expenditure and accordingly reduced the amount of WIP.
Assessee filed an appeal and in an appeal also raised ground that if it is capital receipt then it should be allowed to be amortised as and when sales happened proportionately. CIT A has decided the appeal holding that it is revenue expenditure and included the same in WIp, however rejected the alternate claim of the assessee about amortisation of the same in the year of sales of units proportionately.
Department has filed an appeal against the said order before ITAT.
Issue:
1. Is appeal is maintainable as there is no tax liability in the year under an appeal.
2. Whether assessee is stand of claiming the same as revenue expenditure is correct?
3. Whether assessee should file the Co for alternate ground about amortisation?
Pl guide.