2022 (8) TMI 1417

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....n law in confirming the disallowance of expenses amounting to Rs. 15,50,59,250/- which do not pertain to the project but are in the nature of selling cost and general administration cost." 3. The assessee is engaged in the business of real estate. During the year, the assessee was allotted by land by NOIDA. The land acquired by the assessee is the stock-in-trade of the business. The construction work has started during the year. The assessee incurred and claimed the following expenditure which have been disallowed by the Assessing Officer on the grounds that the assessee has not routed these expenses through P&L account and claimed directly in the computation. Particulars Amount Advertisement Expenses 9,75,19,715/- Brokera....

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....iod on the defaulted amount. The balance sheet also reflects cost of land of Rs. 387.25 Cr. which has been capitalized. Since, the interest is attributable to the cost of land, the interest expenditure is not allowable as per Section 36(1)(iii) of the Income Tax Act, 1961. Similarly, the registration charges and the fee/penalty/damages/price for late registration amounts to an integral part of cost of acquisition of land has also to be allotted to the "cost of project" and to be treated as part of capital work-in-progress. Hence, we hereby affirm the order of the ld. CIT(A) on these two issues. Advertisement Expenses, Brokerage & Commission: 9. The assessee has already started business operations, construction is in progress and an am....