TaxTMI 
TaxTMI 
2021 (8) TMI 1221
X X X X Extracts X X X X
X X X X Extracts X X X X
....right in deleting the addition of Rs. 8,17,42,528/- being amount debited as interest expenses towards delayed payment of EDC external Development Charges to HUDA, as the same is treating it erroneously as fully allowable expenditure u/s 37, is penal in nature as interest has been charged by concerned authority for delay. 2. That the grounds of appeal are without prejudice to each other. 3. The appellant craves leave to add, alter or amend any/all of the ground(s) of appeal before or during the course of the hearing of the appeal. 2. Briefly stated facts of the case are that in the scrutiny assessment order dated 01/07/2016 in terms of section 143 (3) of Income-tax Act, 1961 (in short 'the Act') with reference to the ret....
X X X X Extracts X X X X
X X X X Extracts X X X X
....any and not a fixed asset as per the analogy of car as given by the assessee. In view of the above discussion, the amount of Rs. 8,17,42,528/-, paid by the assessee company as interest to HUDA for delayed payment of the externa! development charges (EDC) and claimed as revenue expenditure, is disallowed as being penal and capital in nature, (Addition : 8,17,42,528/-)" 3. The above disallowance has been deleted by the learned CIT(A) observing as under: "6.1 I have considered the facts and circumstances of the case, submission of the appellant and perused the assessment order. I find that on the identical facts the then CIT(A)-29 in the case of Triveni Ferrous Infrastructure P. Ltd. for the AY 2012-13 has held ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of the Tribunal (supra) is reproduced as under: "6. We have considered the rival submission and perused the order passed by the authorities below. On going through the orders and material referred to before us, we note that assessee during the year has incurred an expenditure of Rs. 2,46,24,237/- on account of interest in respect of the EDC charges outstanding and payable to HUDA. The AO has disallowed the same considering it penal in nature and also on the reasoning that such expenditure should form part of the work-in-progress as assessee is a developer and deduction of same will be available against the sale of the project. The CIT (A) has held that such expenditure is not penal in nature and the interest expenditure pertain....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at amount paid was not penal in nature as much as it was as per declared policy of Government and occasioned by failure of assessee 's conduct was an offence or that it did anything that was prohibited by law, payment in question did not fall within mischief of Explanation below section 38(12) - Held, yes - whether, therefore, assessee's claim was to be allowed - Held, yes [para 5] [in favour of assessee]" 8. Keeping in view of the facts and circumstances of the case and respectfully following the precedent, as aforesaid, we are of the considered view that the facts and circumstances of the case of the assessee's case is exactly the similar and identical to the decision of the Hon'ble High Court in the case....