2023 (11) TMI 330

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....lopment of lands. The Return of Income for the assessment year 2014-15 was filed on 29.11.2014 declaring Rs.Nil income. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-7(1), Pune ('the Assessing Officer') vide order dated 23.12.2016 passed u/s 143(3) of the Income Tax Act, 1961 ('the Act') at a total income of Rs.Nil after making addition of Rs.5,60,73,319/- being the amount paid to be retiring partner, namely, Kumar Housing Corporation Limited. The factual background of the case is as under : During the previous year relevant to the assessment year under consideration, the assessee firm debited development expenses of Rs.13,40,50,885/- which includes an amount of Rs.5,60,73,319/- paid to r....

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.....5,60,73,319/- as settlement cost to Kumar Housing Corporation Limited. In the event, the above cost may not be allowed as an expenditure towards the project, the same should be allowed to be amortised once the sale of the properties commence. The assessee has treated the above settlement cost as an expenditure, which is duly transferred to capital work in progress. This cost will be offered as revenue expenditure in the year once sale of properties commence in future. The total saleable area of the project after completion will be 48,000 sq.ft. and taking into account average price realization of Rs.15,000/-, the total revenue will be approx Rs.72, Crore." 3. The Assessing Officer was of the opinion that the a....