Real estate project accounting and tax adjustments: revenue recognition, interest capitalization, debenture costs, notional interest recalculated, and TDS deletion.

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....Assessees treatment of project selling costs under the percentage completion method conformed with ICAI guidance; advertising, promotion and commission expenses were allowable as revenue expenditure since revenue recognition threshold was not met. Interest on debentures financing the project must be capitalized; AO directed to disallow interest expense claimed without nexus to other uses. Debenture issue expenditure held allowable as borrowing cost. Notional interest on interest-free advances to related parties to be recalculated using assessees cost of capital and cannot increase claimed interest; AO to restrict adjustment to actual claimed interest. Section 14A adjustment partly allowed; TDS disallowance deleted due to excess timely deposit and AOs reverse calculation rejected.....