TaxTMI 
TaxTMI 
2015 (9) TMI 1301
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....ces of the case and in law was justified in deleting the additions of Rs. 10,00,000/- on a/c of disallowance u/s 40(a)(ia) of the I.T. Act, 1961 made by the Assessing Officer?" Ground No.1 3. Apropos ground no.1, we have heard arguments of both the sides and carefully perused the relevant material placed on record. Ld. DR has also drawn our attention towards assessment order para 4.5 at page 3 and submitted that it was observed by the AO that the assessee has debited an amount of Rs. 43,26,000 towards professional expenses in the name of M/s DLF Home Developers Ltd. under the head of architectural and consultancy fee who is also the holding company of the assessee company having 51% share of the assessee company. Ld. DR further submitted that the amount of professional charges claimed in respect of said payment, the assessee company could not bring on record the benefits derived by it by paying this professional fee to M/s DLF Home Developers Ltd. and hence, the AO was correct in disallowing the same which was in correctly deleted by the CIT(A). Ld. AR supporting the order of the CIT(A) submitted that the issue is squarely covered in favour of the assessee by the recent decisio....
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....external development cost and internal development cost in the POCM chart were actually incurred or not. Ld. DR further contended that the assessee in its P&L account has debited only the amount of Rs. 80,53,742 towards IDC, therefore, this amount was rightly disallowed and added back to the total income declared by the assessee in the assessment order. Ld. DR further took us through operative para 7.2 at page 10 of the first appellate impugned order and submitted that the infrastructure expenses cannot be allowed as revenue expenditure and the claim of the CIT(A) is not sustainable and in accordance with law, therefore, the impugned order may be set aside by restoring that of the AO. Ld. AR supported the impugned order and submitted that the disallowance made by the AO without any basis was rightly deleted by the CIT(A) as the IDC has to be charged from the customers. Ld. AR has also drawn our attention towards order of ITAT 'B' Bench Delhi in assessee's group company's case in ITA No. 3561/D/2013 for AY 2005-06 in the case of DCIT vs DLF Limited and submitted that when the assessee is claiming deduction in respect of internal development cost/expenditure of the amount in proporti....
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....elopment expenditure was actually incurred during the year. It was relating to Security Charges, Conversion Charges, Road Work etc. The Ld. CIT (A) has deleted theses disallowance which has been questioned by the Revenue in this ground. 4. At the out set, the Ld. AR submitted that the issue raised is fully covered by the decision of the Tribunal in the case of assessee itself for the assessment years 1994-95, 2000-01, 2002- 03 & 2004-05 under the similar set of facts and circumstances. 5. The Ld. Departmental Representative on the other hand basically placed reliance on the assessment order. He submitted that the expenditure was not claimed by the assessee in its profit and loss account. 6. The Ld. AR submitted that the Ld. CIT (A) has passed detail order after discussing the case of the parties and following the order of the Tribunal in the case of assessee itself on an identical issue under similar set of facts and circumstances for the assessment years 1994-95, 2000-01, 2001-02,2002-03 & 2003- 04. 7. Having gone through the orders of the authorities below, we find that the Assessing Officer had disallowed the claimed expenditure with this observation that out of the tota....
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.... Tribunal in appeal for assessment year 1994-95. 'This fact has been confirmed by both the counsels. Since the internal development expenses are debited to work in progress account and the expenses debited to profit and loss account are in proportion to proper ties conveyanced is allowable. The Tribunal in appeal for assessment year 1994-95 observed as under: 13. The next issue is with regard to 30% of sale value which, per section 5(1) of HDRUA Act has to be deposited in a separate Bank account under the control of Director, Town & Country Planning, Haryana. The assessee debits on yearly basis all direct expenses for development of this colony, into the work-in progress account. On sale of the land or units, it credits work-inprogress: account by 30% of sale value and debits the same to profit & loss account as internal development charges. This, it has done consistently, right from 1981 till date. The CIT (A) has discussed this issue in para 24 of page 23 onwards. His finding given at page 28 para (v) of his order. Now, here again the CIT(A) varies the method of accounting regularly followed and employed by the assessee and accepted by all concerned authorities right from ass....
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....3 for Asstt. Year 1994-95. According to the revised working, the G.P. will go down by a figure of Rs. 79,82,516/- and the same is reduced from the, total income of the assessee company. A copy of the revised trading account duly signed by the assessee is enclosed herewith. " Therefore, this tinkering of the method of accounting of the assessee has not resulted in any gain to the Revenue in the year under appeal. Further, collectively, if all the years are taken into consideration, there is no gain to the Revenue. In fact, there is loss to the Revenue, if the effect of order of CIT is given in all these previous years and subsequent to the year under appeal. A chart has been filed by the assessee in re-assessment appellate proceedings in ITAT which were also heard together along with this appeal. Since in ultimate analysis, we have held that the recourse to proviso to Section 145 of the Act is uncalled for, the book results are to be accepted since there is no dispute to the income offered and expenses claimed, these directions given by CIT(A), in his order, are incorrect and the order of the AD and the CIT, Delhi (Central), New Delhi, on this ground for applying section 145 of th....
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.... facts and circumstances and in law position for taking a deviated or different view. Accordingly, we hold that the CIT(A) was right in allowing relief for the assessee and deleting the impugned addition made by the AO without any reasonable and justified basis. Accordingly, ground no. 2 of the revenue being devoid of merits is dismissed. Ground No.3 8. We have heard arguments of both the parties inter alia the impugned order of the CIT(A) and relevant part of assessment order on this issue. 9. Ld. DR supported the order of the AO and submitted that the CIT(A) was not justified in granting relief to the assessee and deleting the addition made by the AO u/s 40(a)(ia) of the Act. Ld. AR supporting the conclusion of the CIT(A) submitted that in para 8.3 at page 14 of the impugned order, there is elaborate discussion on the issue and incorrect disallowance made by the AO was rightly deleted by the CIT(A) in holding that the asessee has established that the brokerage expenses have actually been claimed by the assessee in P&L account and the same have been disallowed in computation of income on the ground that the TDS was not paid on the same. Hence, addition u/s 40(a)(ia) of the Act....