2022 (7) TMI 997

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....cer [AO] u/s. 143(3) of the Act on 27-12-2018. The grounds raised by the Revenue read as under: 1. The order of the learned CITA) is contrary to law, facts and circumstances of the case. 2. Whether on fact and circumstances of the case and in law, the Ld. CITA) was right in deleting the addition w.r. to Advertisement, Consultancy expenses classified as other expenses without considering the fact that the expenses were directly related to a construction project ECR-14' for which no revenue has been offered for AY 2016-17, hence rightfully disallowed by AO by following guidelines of percentage completion method and matching concept? 3. Whether on fact and circumstances of the case and in law, the Ld.IT(A) was ri....

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....ltancy is to be capitalised in WIP, hence the partial order of the relied upon case law is in favour of present case of revenue rather than present case of assessee? 5. For these and other grounds that may be adduced at the time of it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored. As evident, the revenue is aggrieved by allowance of expenditure by Ld. CIT(A). Having heard rival submissions, our adjudication to the subject matter of appeal would be as under. 2. The material facts are that the assessee is resident corporate assessee. During assessment proceedings, it transpired that the assessee claimed expenditure of Rs. 5,15,44,310/-, whereas there was no revenue fr....

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....ost of unconsumed/uninstalled material delivered at site and payments made to sub-contractors in advance of work performed was not to be considered as part of construction and development costs and thus, the same would be charged to the Profit & Loss Account in the year of occurrence. It was also submitted that the principles laid down in guidance note as well as in ICDS were one and the same. Reliance was placed, inter-alia, on the decision of Hon'ble Delhi High Court in CIT Vs. Dhumketu Builders and Development Ltd. (368 ITR 680) to support the same. 4. The Ld. CIT(A) concurred with the assessee's submissions and held as under:- The submissions of the appellant were examined vis-à-vis the findings of the Assessi....

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....contentions are found to be tenable. During the appellate proceedings, the A.R. furnished ledger extracts pertaining to the advertisement cost of Rs. 3,99,76,615/- incurred by the appellant during F.Y. 2015-16. Details of other expenditure such as Bank charges, rates & taxes, payment to Auditor, professional and consultancy fees and sales promotion expenses were also submitted. Taking into account the facts, circumstances, evidences and the judicial decisions pertaining to this case, the "other expenditure" amounting to Rs. 5,15,44,310/- is to be treated as admissible revenue expenditure for the A.Y. 2016-17. This ground of appeal is allowed. Aggrieved as aforesaid, the revenue is in further appeal before us. 5. Upon careful considera....