TaxTMI 
TaxTMI 
2023 (8) TMI 670
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....n the sale of the property at Vasant Square Mall. These commercials properties were purchased by the assessee from the family members of the Directors of the company for a consideration of Rs. 3,98,46,460/-. The properties were sold for Rs. 3,03,10,350/- and hence a loss was incurred amounting to Rs. 95,27,110/-. On query by the AO in this regard, assessee responded with the details of loss incurred as under:- "As regard to the Vasant Square Mall, it is stated that a commercial property having area of 2886.70 sq.ft. was purchased by Mrs. Sunita Beriwala and Ms. Vishakha Beriwala from M/s Suncity Projects Private Limited. For this an amount of Rs. 30 lacs was made by them to the company. Also the assessee company took the booking from the sellers on cost to cost basis without paying any premium. The subsequent demands of the Builder were also paid by the assessee company. In this regards we are enclosing herewith copy of agreement to sell with Mrs. Sunita Beriwala and Ms. Vishakha Beriwala as Annexure-VII. The assessee company is in the business of Real Estate and expected to earn substantial profit by renting out the said property. Unfortunately, market for commercial property di....
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.... making the assessment for any particular year, deductions can therefore be permitted only in respect of expenses which are found to have been incurred in the relevant accounting period. In adjudging the admissibility of a claim for deduction, the determination of the question whether the assessee had incurred the expenditure during the relevant accounting period is an indispensable preliminary step". Further it has been held by Hon'ble High Court in CIT vs. Jai Parabolic Springs Ltd. (2008) 172 taxman 258 (Delhi) "The revenue expenditure, which is incurred wholly and exclusively for the purpose of business, must be allowed in its entirely in the year in which it is incurred. It cannot be spread over to a number of years even if the assessee has written it off in his books over a period of a number of years. Since, the expenditure incurred is not relevant to the previous year of relevant assessment year i.e. 2011- 12. So, the claim of the appellant is not allowable. Therefore, the disallowance made by the AO of Rs. 95,27,110/- is hereby confirmed. Hence the ground of appeal is dismissed." 6. Against the above order, assessee is in appeal before us. We have heard both the parties....
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....milarly, in the case in hand that payments made to the parties is fully verifiable and the fund received from the parties were received by way of cheques and the same were utilized by the assessee for its business purpose for completing the project and the assessee has also made the TDS on interest payment and the funds received were on the basis of valid MOU against booking of space and on the basis of fixed return plan offered by the assessee, hence, the expenditure incurred was for the purpose of commercial expediency and meeting the fund requirement of the business. We further find that ld. CIT(A) has deleted the addition by following the order of his predecessor in appeal no. 233/14-15 dated 20.7.2015. In view of above and respectfully following the precedents as aforesaid, we do not find any infirmity in the order of the Ld. CIT(A), hence, we affirm the same and dismiss the ground no. 1 raised by the Revenue. 10. As regards the addition of Rs. 2,24,08,048/- on account of compensation given to various parties is concerned, Ld. AR submitted that compensation paid of Rs. 15618000/- to Gannon Dunkerly, Rs. 31,72,752 + Rs. 28,36,074/- to Unit Holders and Rs. 781722/- to Merlyn Pr....
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....aid discussions, we are of the considered opinion, that the above expenditure of Rs. 2,24,08,048/-, on account of compensation given to various parties are made for the purpose of business, hence, the same were rightly deleted by the Ld. CIT(A), which do not require any interference on our part, therefore, we affirm the same and dismiss the ground no. 2 raised by the Revenue. 11. As regards the addition of Rs. 1,29,458/- u/s. 14A is concerned, it is submitted by the Ld. AR that this issue is squarely covered by the decision of the ITAT for the assessment year 2010-11 in assessee's own case decided in ITA No. 5507/Del/15 in Assessee's appeal wherein, on exactly similar facts, the Tribunal deleted the addition made u/s. 14A and allowed the ground of appeal raised by the assessee by relying upon the decision of the Jurisdictional High Court in Cheminvest Ltd. (61 Taxman.com 118 Delhi. Similarly, in the case in hand, Ld. AR has submitted that the assessee has not earned any exempt income during the year under consideration and for this purpose the assessee has submitted the computation of income and copy of balance sheet. Here in this matter, vide paragraph no. 2.2 of the assessment o....