TaxTMI 
TaxTMI 
2016 (7) TMI 1631
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....ome Tax Act, 1961 (hereinafter called 'the Act') on 27/08/2011, the assessee filed the revised return of income on 26/03/2012 declaring Nil income after adjusting brought forward losses against current year business profit of Rs. 922,87,570/-. During the assessment proceedings, the assessee company again filed a revised computation of income on 22/02/2013 declaring Nil income after set off of brought forward loss of Rs. 134,445,528/-. The business income for the year was computed at Rs. 19,46,10,951/-. The assessment was finalized at Nil income after setting off from unabsorbed losses of earlier year. Total income u/s 115JB was computed at Rs. 60,01,90,619/- after making an addition of Rs. 143,39,000/- on the returned book profit of Rs. 58,58,51,619/-. 3. A perusal of the assessment order shows that during assessment year 2004- 05, the assessee company had claimed deduction for all the balance accrued liability relating to real estate project, including flyover cost and flyover interest payable to Municipal Corporation of Delhi (MCD). The Department in AY 2004-05 to 2009- 10 had disallowed the claim and had given the finding that such expenses will be allowable in the year ....
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....espect of following items of expenses incurred in relation to real estate project without appreciating that claim had been made by the appellant for the reason that department has not accepted allowability of expenses on accrual basis and appeals in respect thereof are pending for adjudication before Delhi High Court. a) Flyover Cost paid to MCD - Rs. 3,02,50,000/- b) Flyover Interest paid to MCD - Rs. 52,25,500/- c) Expenditure in respect of approvals and permissions - Rs. 81,19,423/- 2. That the CIT(A) erred in disallowing an amount of Rs. 12.47 lacs on account of administrative expenses u/s 14A of the Income Tax Act as against disallowance made by the appellant company of Rs. 2.50 lacs in its return of income. 3. That the CIT(A) erred in upholding addition on account of disallowance u/s 14A read with Rule 8D of Rs. 9.97 lacs in determination of book profit for the purpose of section 115JB of the Income Tax Act. 4. That the CIT (A) erred in upholding the initiation of penalty proceedings u/s 271(1)(c) of the Act in the facts and circumstances of the appellant. 5. That the order passed by the Assessing Officer and uphe....
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....rder of the ITAT for AY 2005-06, pages 60 to 61 for AY 2006-07, pages 66 to 73 for AY 2007-08 and pages 81 to 86 for AY 2009-10. The Ld. AR submitted that the issue was now before the Hon'ble Delhi High Court pending adjudication because the Department has preferred an appeal against the order of the ITAT. On ground no. 2 of the asessee's appeal, the Ld. AR submitted that the assessee had suo moto made a total disallowance of Rs. 21.87 lacs consisting of Rs. 19.37 lacs on account of interest expenses and Rs. 2.50 lacs on account of administrative expenses as against exempt income of Rs. 70,088/-. The Ld. AR submitted that in AY 2009-10 the Ld. CIT (A) had deleted a similar disallowance. The Ld. AR also submitted that the assessee company has raised an additional ground to the affect that since the total exempt income was Rs. 70,088/-, disallowance is to be restricted to this amount only notwithstanding the fact that the company had made suo moto disallowance of Rs. 21.87 lacs. The Ld. AR relied on the decisions of the Hon'ble Delhi High Court in CIT vs. Holcim India P. Limited 272 CTR 282 (Del.), Joint Investment P. Ltd. vs. CIT 372 ITR 694 and Cheminvest Limited vs. CIT 378 ITR 33....
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....roject. Claim on accrual basis has already been allowed by the CIT (A) in AY 2004-05. On an overall view of the factual matrix of the case it is our considered opinion that following the principle of consistency, it would serve the ends of justice if the ITAT's order in AY 2004-05 is as we are informed that the issue in AY 2004-05 is still pending adjudication. The relevant paragraph of ITAT in assessee's own case for AY 2004-05 in ITA No. 2799/Del/2008 reads as under: "5. We have considered 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 flyover cost of Rs. 13.50 crores and the issue of interest payable to MCD in respect of outstanding flyover cost, it is noticed that for the AY 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 development 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 assessee has accepted the sta....
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....fare Trust. Similar disallowance had been made by the AO in earlier years and was subsequently deleted by CIT (A) and ITAT. Accordingly, this ground is covered in favour of the assessee. We find that ITAT in assessee's own case for AY 2006- 07 in ITA No. 314/Del/2010 had adjudicated the matter as under: "2.2 In regard to notional interest, the finding of the Tribunal has been as under: In regard to the issue of disallowance of interest on the loans outstanding from Ms/ DCM Employees Welfare Trust, it is noticed that the issue is squarely covered by the decision of the Coordinate Bench of this Tribunal in the assessee's own case for the AY 2003-04 referred to supra and consequently respectfully following the decision of the Coordinate Bench of this Tribunal in the assessee's own case for the AY 2003-04, the findings of the Ld. CIT (A) on this issue stand upheld." Accordingly, this ground of the Department's appeal is dismissed. 15. As far as ground no. 2 of assessee's appeal regarding disallowance u/s 14A of the Act is concerned, it is seen that this ground correspond to ground no. 2 of Department's appeal. The assessee company had received dividend income of....