TaxTMI 
TaxTMI 
2025 (5) TMI 2049
X X X X Extracts X X X X
X X X X Extracts X X X X
....09.2010. The assessee was engaged in the business of real estate and declared income from "house property" and "business in profession". The assessment was completed vide order dated 30.12.2011 at a total income of INR 22,04,06,021/- by making addition of INR 3,67,06,904/- under the head "income from house property" and further addition of INR 2,63,10,771/- towards unrealized debtors and disallowance of INR 49,41,898/- was made out of expenses on which no TDS was deducted. In appeal, the Ld.CIT(A) has deleted the addition made under the head "income from house property" and on account of unrealized debtors and sustained the addition of INR 21,60,237/- out of total disallowances of INR 49,41,898/- made by AO on account of non-deduction of tax at source. 3. Against the order of Ld.CIT(A) deleting the disallowances/additions, the Revenue is in appeal and the assessee is also in appeal against the confirmation of disallowances made by Ld.CIT(A). 4. The Revenue has taken following grounds of appeal:- 1. "On the facts and in the circumstances of the case, CIT(A) has erred in law and on facts in deleting addition of Rs. 3,67,06,904/- made by AO which was deducted by the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is of offering of income under Percentage of Completion method. 3. Without prejudice to original Ground of Appeal No.2 and in case disallowance u/s 40 (a)(ia) is to be sustained for any reason, deduction in respect of such expenses may be allowed in later year as TDS stands deducted and deposited. 4. The above grounds which are legal and emanating from records and it can be taken before the Hon'ble Appellate Tribunal, as held by the Hon'ble Supreme Court in the case of NTPC vs. DCIT 229 ITR 383 (SC). 5. It is prayed that the additional ground of appeal may kindly be admitted and adjudicated upon alongwith the original ground of Appeal no.2, of which these are only a supplementary grounds in nature." 7. In the application for additional grounds, the assessee has requested that these grounds are legal in nature and therefore, deserves to be admitted for. He placed reliance on the judgement of Hon'ble Supreme Court in the case of NTPC vs DCIT 229 ITR 383 (SC). After considering the grounds of appeal taken and the prayer of the assessee, in the interest of justice, the additional grounds taken by the assessee are admitted for adjudication. 8. Si....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he said area till the receipt of the full and final payment and execution of the Sale Deed, the rent received by the assessee was its own income. However, assessee executed Title Deed and also execute Tri-Party Agreement to transfer the Lease Agreement earlier executed between the assessee and the tenant to the new owner and the tenant. The rent received during this intermittent period was since actually belonged to the new owner, therefore, such rent was not included in the total income of the assessee company and ultimately, was transferred to the real owner of the property. Since the TDS was deducted in the name of the assessee company and there was no occasion for the assessee to transfer such TDS to the real estate owner. Therefore, the same is claimed against the total tax liability which is in accordance with law. In view of these facts, Ld.AR requested for the confirmation of the order of Ld.CIT(A) deleting the addition so made. 12. We have heard the rival submissions and perused the material available on record. Before commenting upon the assessee, we first gone through the findings of Ld.CIT(A) which are contained in para 4.4 of the order. For ready-reference, the same....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd favour with the A.O. and accordingly, made the addition. (v) During the appellate proceedings, the appellant reiterated the submissions made before the A.O. and has also stated that the details as required by the A.O. during the assessment proceedings, were filed vide letter dated 04.12.2011, a copy of which is filed in the appellate proceedings in the form of paper book. These details include the copy of lease agreements, space buyers agreements, receipt of payments on sample basis, since these copies were in huge volume. It is also submitted that copies of invoice were also issued by the customers, to whom reimbursement of rent was given. (vi) During the appellate proceedings, the AR has submitted that the appellant became party to these lease agreements, since the buyers have not become legal owner at the time of renting out these units, but full payments have been made. In this way the appellant safeguarded the interest of its customers. It has also been submitted by the AR that in respect of units, for which sale deed have been subsequently executed, in such cases, the rent was directly received by the purchasers from the tenants. (vii) It is also....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) which has not been doubted. Therefore, we find no infirmity in the order of the Ld.CIT(A) deleting the additions made. Accordingly, the same is hereby upheld. Ground No.1 of the Revenue is dismissed. 14. Ground No.2 raised by the Revenue is with regard to the deletion of addition of INR 2,36,10,771/- made by the AO on account of unrealized debtors which was deleted by Ld.CIT(A). 15. Brief facts pertaining to this ground of appeal are that the assessee out of total receipts has deducted a sum of INR 2,63,10,771/- on account of unrealized debtors by claiming that this amount pertained to the maintenance charges which was not received after the expiry of three months from the date of bill and therefore, recovery of such amount is doubtful. The AO however, had not accepted this contention and made the addition of the said amount. 16. Before us, Ld. Sr. DR submits that the assessee has failed to file the details of such parties and it is not acceptable that the occupant has not paid the maintenance charges for such long period and therefore, he requested for the restoration of the addition made by the AO. 17. On the other hand, Ld.AR supported the order of Ld.CIT(A) and su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee in all the grounds of its appeal has challenged the confirmation of disallowance of INR 21,60,237/- (wrongly taken by Ld.CIT(A) at INR 22,42,948/-) out of construction expenses. 20. Before us, Ld.AR for the assessee submits that the assessee is recognized its income by following POCM according to which the expenses which are to be incurred in subsequent years, a provision is made and claimed against the receipts which is accepted method of revenue recognition. In POCM, revenue is recognized when substantial amount of sale is realized and corresponding construction is yet to be completed and physical possession was not given to buyer. Thus in order to provide parity between revenue and expenses, a provision is made for the expenses which are going to be incurred in future. Since it was a provision made for future expenditure therefore, there is no question of making TDS out of the same. The Ld.AR for the assessee further submits that in subsequent years when the said expenses was incurred and paid, necessary TDS was made in accordance with law and all the details were submitted before the AO in this regard. He further submits that out of the total provision of INR 49....