TaxTMI 
TaxTMI 
2023 (6) TMI 280
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....ng expenses amounting to Rs. 29,36,588/- and other expenses amounting to Rs. 1,44,312/-. 2. The Ld. CIT(A) has erred in upholding the order of Ld. A.O capitalizing depreciation amounting to Rs. 3,59,892/-. 3. The appellant craves leave to add or delete any ground of appeal before the appeal is heard or at the time of hearing of appeal. 2. The facts giving rise to the present appeal are that assessee are that the assessee e-filed its return of income on 27.09.2013 for assessment year 2013-14 declaring loss of Rs. 26,06,006. The case was selected for scrutiny assessment under the CASS. The statutory notices under Section 143(2) of the Income-Tax Act, 1961 was issued on 04.09.2014 which was duly served upon the assessee. In response there....
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....his contention, learned counsel submitted that that selling expenses have been claimed revenue expense as per the Accounting Standard. He pointed out that as per AS 7 that the expenses that are not actually connected with cost of construction should not be included into the cost of construction. 7. He placed reliance on various decisions of Co-ordinate Benches of this Tribunal rendered in the cases of DCIT vs. M/s. Puma Realtors Pvt. Ltd. ITA No.1734/Del/2015, M/s. Hiranandani Palace Gardens P . Ltd. Vs. ACIT - ITA No.2298/M/2012 and Pragnya Crest Properties (P) Ltd. vs. DCIT - 115 Taxman.com 90 (Bangaluru). On the other hand, learned Departmental Representative supported the orders of lower authorities. 8. We have heard the rival content....
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....he Ld. AR has admitted that is following Percentage Completion Method for recognizing revenue from the project. The submission that every building is a project and since expenditure of the nature claimed, do not have any nexus with the project under construction the same is claimed as deductible revenue expenditure during the year is however, not borne out from the statement of accounts. The appellant has disclosed construction VVIP at Rs. 29,44,97,152 as on 31.03.2013. This is a consolidated VVIP wherein expense incurred during the year of approximately Rs. 3.3 crores is also capitalized. There is nothing in the nature of expenses that is capitalized to show that it pertains to any specific project. The annual accounts do not disclose any ....
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....e cases of DCIT vs. M/s. Puma Realtors Pvt. Ltd. ITA No.1734/Del/2015 and Pragnya Crest Properties (P) Ltd. vs. DCIT - 115 Taxman.com 90 (Bangaluru) have decided the issue in favour of the assessee. Further, it is vehemently pleaded by the assessee that in ITA No.2298/M/2012 the case of M/s. Lodha Palazzo Vs. ACIT, 15(1), Mumbai, the Mumbai Bench of the ITAT has held by observing as under: "11. We have considered rival contentions and carefully gone through the orders of the authorities below. The percentage completion method of accounting has been regularly followed by the assessee. In the succeeding assessment year 2010-11, the AO has accepted the deductibility of the identical nature of expenses in the assessment order passed u/s 143(3....
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....ee deserves to be allowed. We hold accordingly. The additions made by the lower authorities on this issue are hereby ordered to be deleted." 10. Further, the Tribunal in the case of Pragnya Crest Properties (P) Ltd. Vs. DCIT ( IT Appeal No.1576(BANG) of 2017, where one of us was the author Members. The Bangaluru Bench 'A" of the Tribunal has decided the same issue and held as under: "11. We have carefully considered the rival submissions. The substantive issue for determination is whether the selling expenses incurred by the assessee are allocable to the specific development contract under taken by the assessee and thus required to be added to the contract costs in progress or such expenses can be allowed as revenue expenditure. On perus....