2021 (1) TMI 946

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....- Rs. 4,33,15,193/- b) Disallowance of payment for purchase of land- Rs. 1,27,50,000/- 2. The assessee is engaged in the business of film production and also in real estate activities. The above said two issues relate to real estate activities carried on by the assessee. 3. The first issue relates to the disallowance of development charges- Rs. 4,33,15,193/-. The A.O. noticed that the assessee is carrying on real estate activity under the name "E.K. Land Developments". The AO noticed that the assessee has claimed deduction of Rs. 4,33,15,193/- as development expenses during the year under consideration. The A.O. further noticed that the assessee had shown development charges of Rs. 7,74,05,400/- in the year relevant to the as....

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.... development expenses will be claimed proportionately in the subsequent years in proportion to sale of sites. The Tribunal accepted the explanations of the assessee and accordingly deleted the disallowance of Rs. 7.74 crores made in AY 2010-11. 6. The Ld. CIT(A) appreciated that the assessee's claim of Rs. 4,33,15,193/- as development expenses during the year under consideration is the proportionate expenditure claimed by the assessee in respect of sale of sites effected during the year. The Ld. CIT(A) also noticed from the "ledger extract" that the individual payments made towards land development expenses was less than Rs. 20,000/-. Accordingly, he held that the provisions of section 40A(3) of the Act are not attracted and accordin....

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....ure before the A.O. by furnishing relevant documentary evidences. Since the Ld. CIT(A) has also not examined the documentary evidences, we are of the view that this issue requires fresh examination at the end of the A.O. with regard to both the issues, viz., the genuineness of the expenses and applicability of section 40A(3) of the Act. 9. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue and restore the same to the file of the A.O. for examining it afresh. 10. The next issue relates to disallowance of land purchase expenses of Rs. 1,27,50,000/- u/s. 40A(3) of the Act. The A.O. noticed that the assessee has debited a sum of Rs. 6,40,46,399/- towards cost of land. The A.O. noticed from the details furnished by the ....