TaxTMI 
TaxTMI 
2025 (12) TMI 418
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.... CIT (A) as made by the ld. AO by disallowing the business loss claimed by the assessee. 2.1. The facts in brief are that during the course of assessment proceedings, the ld. AO observed from the Profit and Loss account that the assessee has charged off bad debts of Rs. 1,50,00,000/- and accordingly, the assessee was required to submit the details thereof. The assessee submitted that the bad debts pertained to new look Intex P. Ltd. to whom the assessee advanced Rs. 1,50,00,000/- for supply of ready-mix concrete material at the project site and also furnished a copy of agreement dated 01.11.2011, besides copies of letters issued to the said party by the assessee. The ld. AO noted from the said agreement that New Look Intex P. Ltd. was to....
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....mix concrete material for the project Omni Lake View Kolkata. However, the same was not supplied by the party and the advance given was also not refunded to the assessee. Thus, the advance given became bad. The assessee treated the said loss as revenue in nature by charging the same to the profit and loss account which was not allowed by the ld. AO on the ground that the revenue was not recognized during the year from the said project whereas as matter of fact we observed that the assessee has already booked the commercial spaces and amount received from the customers were shown against sale of commercial spaces in the balance sheet as liability. We also note that the assessee has shown income from the said project in the subsequent years a....
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....it was given has not been recognized in the profit and loss account. Consequently, we are inclined to set aside the order of ld. CIT (A) on this issue and direct the ld. AO to allow the amount as business loss. The ground no. 1 is allowed. 3. The issue raised in ground no.2 is against the confirmation of disallowances of interest Rs. 3,13,530/- and Rs. 6,36,432/- paid on refund of advances to the customers on cancellation and agreements for sale. 3.1. The facts in brief are that the ld. AO in the assessment proceedings observed that assessee has paid interest on unsecured loans during the year which included Rs. 6,36,432/- paid to Smt. Meena Bajpai & Ashutosh Kumar on the outstanding loans. Accordingly, the assessee was called upon to....
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....e ground that the income of the same project was not recognized in the profit and loss account. The ld. AO disallowed the interest to the tune of Rs. 3,13,530/- on the ground that the assessee apportioned the interest expenditure of Rs. 2,00,59,506/-on all the projects on the basis of average capital employed. The ld. AO disallowed the said amount on the ground that interest amount of Rs. 6,36,432/- exclusively pertained to Omni Lake View Project, Kolkata. The ld. AO disallowed this on the ground that the amount of Rs. 6,36,432/- should be added to Omni Lake View Project, Kolkata and cannot be apportioned on all the purchases. However the AO disallowed Rs. 3,13,530/- only. Apparently, the interest was paid to the purchaser of the flat when ....
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.... loans were taken and repaid as and when the funds are available. Sometime, the period ranges from one day to few days. Therefore, we find merit in the contention of the assessee that in case of current account the interest is normally higher than the interest paid on the fixed amount of loan. We note that interest paid to other parties by the assessee was at the rate of 15% and the copies of account of the parties as well as confirmation letters are available in the paper book. Therefore, we find merit in the contentions of the assessee especially on the ground that in the earlier years similar interest has been allowed to the assessee. Accordingly, we set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition. ....
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....sft Closing stock of area/ unsold area 55761 sft Cost of per sft (234385640/ 111717) Rs. 2,098.03 Value of closing stock (55761 *2098.03) Rs. 11,69,88,251/- 6.2. This is clear from the above that there is no under valuation stock(very negligible difference) by the assessee as the ld. AO has calculated the stock by taking our wrong figures of area which has resulted into this mistake. Accordingly, the order of ld. CIT (A) is set aside and AO is directed to delete the addition. Before parting, we would like to mention that these is a Revenue neutral addition as the closing stock of one year becomes the opening stock of the next year as has been in the case of V.K.J Builders and Contractors Pvt. ltd. 318 ITR 204 (SC). Furt....