TaxTMI 
TaxTMI 
2024 (4) TMI 455
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....he Income-tax Act, 1961 (hereinafter referred to as "the Act") dated 30.12.2016 by the Joint Commissioner of Income Tax, Range-61, New Delhi (hereinafter referred to as "ld. AO"). 2. The Ground Nos. 1 & 4 raised by the assessee are general in nature and does not require specific adjudication. 3. The Ground No.2 raised by the assessee is challenging the disallowance of interest u/s 36(1)(iii) of the Act. 4. We have heard the rival submissions and perused the materials available on record. The assessee firm is engaged in the business of providing architectural services for housing and commercial projects. The ld. AO observed that the assessee had paid interest of Rs 1,76,23,321/- on its loans. The ld. AO observed that on one hand, as....
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....in the ledger accounts. The party wise interest paid listing placed in the paper book also reveals that no interest was paid to such bank. The Ld. AR further submitted that the said bank account is reflecting under the head current assets in the balance sheet. The Ld. AR submitted that it is not a case of the assessee that it had not applied for the flat itself. It is the case of the assessee that the assessee had to apply for the flat as a measure of commercial expediency in order to recover the fees amount. It was mutually agreed between the assessee and the respective parties that the payment for fees will be made subject to the condition that the assessee applies for allotment of flat. Thus, assessee had to apply for allotment of flat a....
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....se of the assessee that the money was advanced to the parties as a measure of commercial expediency i.e. to safeguard its interest and recover the fees due from the said parties. The Ld. AR submitted that it is a settled law that no disallowance can be made under Section 36(1)(iii) in respect of the money advanced as a measure of commercial expediency. "Commercial Expediency" is the prerogative of the businessman and that the Revenue cannot justifiably claim to put itself in the armchair of the businessman and dictate as to what is "commercial expediency". The Ld. AR relied upon the following decisions: 1. S. A. Builders Ltd. vs. CIT (2007) 288 ITR 1 (SC) 2. Hero Cycles (P.) Ltd. vs. CIT (2015) 379 ITR 347 (SC) 3.....
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....15 dated 12.04.2016 Tri. Chandigarh) In view of the above, the Ld. AR prayed that the addition made be deleted as the same is injudicious both on law and on facts. 8. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 9. We have heard both the parties and perused all the relevant material available on record. From the perusal of records, it can be seen that payment was made from the current account held with the bank, are duly reflected in the ledger accounts. The details of party wise interest paid also reveals that no interest was paid to such bank. The said bank account is reflecting under the head current assets in the balance sheet. It is the case of the assessee that the assessee had to....
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.....e. whether the asset is to be construed as being held from the date of allotment of flat or from the date of agreement. 8. We have heard the rival submissions and perused the materials available on record. We find that Bestech India Pvt Ltd (Builder) allotted Flat No. D-702 , Park View Spa, Sector-47 , Gurgaon via allotment letter dated 20.8.2009. The agreement with the buyer was executed on 13.7.2010. The assessee sold the flat to Mr Goonmeet Singh Chauhan on 8.4.2014 relevant to Asst Year 2015-16. The assessee filed its return of income declaring long term capital loss of Rs 17,95,278/- computing long term capital gains, assessee computed the period holding from the date of allotment to the date of sale i.e. 20.8.2009 to 8.4.2014 comp....
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....e that the CBDT in its circular No.471 dated 15th October, 1986 had clarified this position by holding that when an assessee purchases a flat to be constructed by Delhi Development Authority ("D.D.A." for short) for which allotment letter is issued, the date of such allotment would be relevant date for the purpose of capital gain tax as a date of acquisition. It was noted that such allotment is final unless it is cancelled or the allottee withdraw from the scheme and such allotment would be cancelled only under exceptional circumstances. It was noted that the allottee gets title to the property on the issue of allotment letter and the payment of installments was only a follow-up action and taking the delivery of possession is only a formali....