TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 655
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....ght to amend modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." 3. The assessee was engaged in the real estate development in Gurgaon and Manesar. It has also received income from services of maintenance of the building. During the year under consideration, the appellant company has received income from sale of real estate and interest income. In the assessment order framed for this year, Assessing Officer has made addition on account of interest payment of Rs. 22,50,000/- to M/s Dinesh Nandini Ram Krishna Dalmia Foundation on account of money received amounting to Rs. 1.5 crores. Assessing Officer further added Rs. 16,50,500/- on account of assured return in the form of rent paid to Shri Arun Khanna and Kailash Khanna. The Assessing Officer treated these expenses not incurred for business purposes. The Assessing Officer also added Rs. 1,09,17,200/- paid to various parties who had booked the units with the assessee. However, subsequent to the booking there was a change in the floor plan, therefore, certain parties who had booked units earlier had opted out from the booking and they were paid compensation. Such expenses....
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....form of interest or rent. The appellant has also claimed that this is a general practice in the market and in support of its contention it has submitted vide Annexure-1 of its submission wherein fixed return or assured rental plan has been offered by M/s ABC Buildcon Pvt. Ltd., M/s Supertech, Assotech Reality and Omex builders in National Capital Region. The appellant claimed that expenses incurred in the form of assured rental plan and assured interest are wholly and exclusively for the business purposes and the same are allowable u/s 37 of the I.T. Act. The appellant has submitted before Assessing Officer as well as before me that it has entered into an agreement with M/s Dinesh Nandini Ramkrishna Daimia for booking of space at 'Vipul Tech Square' on Main Golf Course Road, Sector-43, Gurgaon. While booking the space in said project the party i.e. M/s Dinesh Nandini Ram Krishna Daimia Foundation opted for the 'investment return plan' and paid Rs. 1.5 crore to the appellant on 30.04.2008. For this appellant as well as M/s Dinesh Nandini Ram Krishna Daimia Foundation entered into an MOU on 09.06.2008. Copy of the said MOU is placed at page 48- SI of the Paper book. In this MOU, it i....
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.... filed at page 80-85 of the paper book. The appellant has paid the assured rental to Sh. Kailash Khanna and Arun Khanna from April 2009 of Rs. 16,30,498/- each. However, the amount paid from April to September 2009 as assured rental was debited to the 'work in progress' as the construction work was in progress and the assured rental paid from October 2009 to March 31, 2010 was claimed as expenditure in the Profit & Loss A/c. For payment of assured rent to these persons, the appellant has deducted TDS u/s 1941 of the I.T. Act as rent. The TDS certificate issued by the appellant are placed at Page 78 and 79 of the Paper book. It is seen that the appellant has capitalized Rs. 16,30,500/- paid till the month of September, 2009 and the balance payment of Rs. 16,30,500/- paid from October 2009 to 31st March, 2010 has been claimed as expenditure in the Profit & Loss A/c. Since, expenditure incurred by the appellant is for the purpose of business and for meeting its requirements for much needed funds. Therefore, the payment made by the appellant under the head assured rental plan is an allowable expenditure. It is seen that the payment made to these parties is fully verifiable an....
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....t in consonance with the business practices as the properties were sold at a lower rate than the circle rate. 9. The Ld. AR relied upon the order of the CIT(A) and also pointed out various documents. 10. We have heard both the parties and perused the material available on record. The CIT(A) held as under: "I have considered the submission of the appellant and observation made by the AO in the assessment order. It is seen that appellant has claimed an expenditure of Rs. 1,09,17,200/- as compensation expenditure which was paid to the parties who have originally booked the space at 'Vipul Tech Square'. It is claimed by the appellant before the AO as well as before me that at the time of booking of units the layout of the building was in conceptual stage, however, on finalization of the layout there were certain changes in the floor plan. Because of change of the floor plan the existing buyers were reluctant to accept the space according to the revised layout plan and some of the buyers opted out from the booking and the appellant company had to pay compensation to such buyers to avoid litigation with the original buyers. It is claimed by the appellant that it has bought ba....
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....ize 741 sq. ft. only. The rate of booking was accordingly enhanced from 2200 per sq. ft. to Rs. 3150/- per sq. ft. which the allottee did not opt. Hence, the appellant company took the said flat from the customer @ Rs. 2600 per sq. ft. as per the agreement filed from page 115-118 of the paper book. After paying compensation of Rs. 400/- per sq. ft., the same area was rebooked @ Rs. 3150/- per sq. ft. in the name of Ajay Raj Singh. Copy of the agreement entered with Ajay Raj Singh is filed at page 170-173 of the paper book. It is claimed by the appellant that appellant still gained Rs. 550 per sq. ft. on this particular unit which has been credited in the Profit & Loss A/c. The entire receipts of the subsequent sale of this unit has been taken to the Profit & Loss A/c. The additional amount paid as compensation was Rs. 3,10,400/- to Sh. Sidharth Singh has been claimed as compensation paid in the Profit & Loss A/c. It is claimed by the appellant that as such there was no loss to the revenue in rebooking of this unit. 3. Unit No. 417: This unit was allotted to Mr. and Mrs. Kaushal Kumar Gupta having area as per drawing, 868 sq. ft.(P.B. Pg. 147-151). However, due to change in the fl....
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....a to be given to this party in lieu of his entitlement. Therefore, to avoid unnecessary litigation which was not in the interest of anybody, appellant entered into an understanding with this party and an agreement for termination of the agreement was signed in the month of December, 2009 which is filed at page No. 122-124 of the paper book. As per this agreement, the unit was bought back by the appellant company from Sh. Ashok K. Mehta @ Rs. 4800/- per sq. ft. The entire consideration was paid including the money received from Sh. Ashok K. Mehta. The differential amount of Rs. 29,52,000/- was debited to compensation account. 5. Unit No. 432: As per the original plan, this unit was allotted to Mr. Narinder Kumar Chopra having area of 776 sq. ft. However, at the time of final delivery, as per the new layout, the size got reduced to 741 sq. ft. The party did not agree to accept the unit of reduced size. Therefore, to avoid the unnecessary litigations which was not in the interest of either of the parties, the appellant entered into a commercial understanding with Sh. Narinder Kumar Chopra which is filed at page 125-128 of the paper book. As per this understanding, this unit was bo....
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....appellant and observation of the Assessing Officer in the assessment order. It is seen that during the year the appellant had received maintenance income of Rs. 50,27,287/- and TDS of Rs. 99,998/- was deducted on the same. The appellant had claimed TDS of Rs. 99,998/- in the A.Y. 2010-11 but at the same time inadvertently the income related to this TDS was not declared in the Profit & Loss A/c in the A.Y. 2010-11. It is claimed by the appellant that it has neither shown this maintenance income nor claimed the expenses connected to this income which were of Rs. 49,31,321/- in the A.Y. 2010-11. It is claimed by the appellant that while merging the Trial Balance in which maintenance income and maintenance expensed were recorded, the same were left out to be taken in the Profit & Loss A/(L/The appellant offered this income in A.Y. 2011-12 for which the appellant has filed copy of computation of income at page no. 101-104. At page 104, which is Profit & Loss A/c for A.Y. 2011-12, the appellant has shown under the head "income items related to previous year" and offered Rs. 1,00,966/- in P&L A/c. It is seen that the mistake was bona fide as this point was pointed out by the AO during the....