TaxTMI 
TaxTMI 
2014 (10) TMI 145
X X X X Extracts X X X X
X X X X Extracts X X X X
....05.00 lacs. b) Payment on account of interest on fly over cost to MCD - Rs. 172.06 lacs. c) Payment of principle amount to builders - Rs. 44.00 lacs. d) Expenditure in respect of approvals and permissions - Rs. 60.09 lacs. e) Expenditure on removal of squatters - Rs. 37.25 lacs. 2. That the order passed by the Assessing Officer and upheld by the CIT(A) is bad in law. 3. That the Appellant Company craves leave to alter, amend, vary and / or add any of the grounds of appeal at any time hereinafter. 3. The ground raised in the Revenue's appeal read as under:- 1. Whether the Ld. CIT(A) on the facts and circumstances of the case and in law is correct in deleting the deduction of Rs. 110.08 lacs on account of interest payable on accrual basis to MCD. 2. Whether the Ld. CIT(A) on the facts and circumstances of the case and in law is correct in deleting the disallowance of Rs. 22.32 lacs made by the AO on account of interest on interest free loans. 3. Whether the Ld. CIT(A) on the facts and circumstances of the case and in law is correct in restricting the disallowance to Rs. 11,77,550/- as against Rs. 23,66,795/- made by the AO u/s. 14A of the I.T. Act. 4.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... & Ors. has adjuidciated the matter as under:- "5. We have consdiered the rival submissions. In regard to the issue of disallowance of Rs. 12.21 crores being the expenses which had been disallowed by the AO as also the issue of disallowance of fly over cost of Rs. 13.50 croes and the issue of interest payable to MCD in respect of outstanding flyover cost, it is noticed that for the assessment year 1993-94 to 1996-97 the revenue has included the income on the sale of property rights on the entering into the agreement with the buyers and the expenses on account of land and develpoment incurred by the assessee has been allowed in proportion to the area sold by applying the matching principle. It is also noticed that in the later years, the assesee has accepted the stand of the revenue and has also been following the same practice. For the relevant assessment year, it is noticed that the AO has changed his stand just because the assessee has transferred the complete rights in the project as a whole to M/s Purearth Infrastructure Ltd. When a particular method of compuation of income of the assessee has been followed and has been accepted and is also followed by the revenue and the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r method of compuation of income of the assesee has been followed and has been accpeted and is also followed by the revenue and the assessee, just because the total rights in the project has been transferred, such method cannot be changed as by the change of the method, the exspenses otherwise allowable to the assessee, is now being denied which is not a permissible act. In these circumstances, we are of the view that the action of the CIT(A) in directing the Assessing Officer to allow the deduction of the said expenses is on right footing and do not call for any interference." 7.3 As regards Payment of principle amount to builders - Rs. 44.00 lacs. is concerned , we find that ITAT in assessee's own case for the asstt. Year 2005-06 in ITA NO. 1983/Del/2009& Ors. . has adjuidciated the matter as under:- "5.4 With regard to claim of deduction of Rs. 29 lacs actually paid to the builders have already been allowed by the tribunal on accrual basis in the assessment year 2004-05, hence, alternate claim for deduction on actual payment basis is not allowable during the year under consideration. 7.4 Expenditure in respect of approvals and permissions - Rs. 60.09 lacs. is concerned ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wn case for the asstt. Year 2006-07 in ITA NO. 314/Del/10 & Ors. . has adjuidciated the matter as under:- "2.1 It is the common case of both the parties that the grounds stand covered in favor of the assessee company by the order of the Tribunal in ITA No. 1983/Del/09 for assessment year 2005-06 dated 17.11.2009, a copy of which has been placed in the paper book on page nos. C-3 to C-10. In this order, reliance has been placed on the roders of the Tribunal for earlier years in the case of the assessee. Therefore, we think it fit to reproduce the paragraph from that order, which as discussed the issue in detail. In regard to ground no. 2 regarding interest of Rs. 67.20 lac payable to MCD for non payment of flyover cost in time, the decision has been as under:- "We have consdiered the rival submissions. In regard to the issue of disallowance of Rs. 12.21 crores being the expenses which had been disallowed by the Assessing Officer as also the issue of disallowacne of fly over cost of Rs. 13.50 crores and the issue of inteest payable to MCD in respect of outstanding flyover cost, it is noticed that for the assessment year 1993-94 to 1996-97 the revenue has included the income ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s against Rs. 23,66,795/- made by the AO u/s. 14A of the I.T. Act is concerned we find that Hon'ble Delhi High Court Decision in the case of Maxopp Investment Ltd. Vs. CIT order dated 18.11.2011 has held that disallowance has to be on a reasonable basis and Rule 8D is not applicable to the assessment year prior to asstt. Year 2008-09. Accordingly, we find that Ld. CIT(A) was correct to direct the AO to restrict the disallowance to Rs. 11,77,550/- (Rs. 9,77,550/) on account of interest plus Rs. 2 lacs on account of adminsitrative expenses) as against disallownce of Rs. 2366,795/- made by the AO. And accordingly, gave a relief of Rs. 11,89,245/- to the assessee which does not need any intereference, hence, the same is upheld. Accordingly, this ground raised by the Revenue stands dismissed. 9.3 With regard to ground Whether the Ld. CIT(A) on the facts and circumstances of the case and in law is correct in deleting the disallowance of Rs. 1,09,128/- made by the AO on account of the prior period expenses, is concerned we find that AO has made the disallowance on the basis of Tax Audit Report without considering the details and the nature of expenses. We find that Ld. CIT(A) has obsev....