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TMI Blog2012 (5) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of 'Sai Jyot' project as it relates to that project - Ld. Counsel argued that apart from the common office expenses relating to the 'Sai Jyot' Project of Rs. 23,96,673/- eligible profit of the 'Sai Jyot' has been reduced for working of deduction u/s.80IB(10) - Held that: the assessee should not have any grievance as M/s. Ganga Developers is one of the assessee's sister concern having identical issue for adjudication - Appeal is allowed by way of direction to A.O. to look into the grievance of the assessee in respect of double deduction and if it is so, then also to give consequential relief - ITA No. 1067/Mum/2010, ITA No. 2039/Mum/2010, ITA No. 2626/Mum/2010 - - - Dated:- 19-10-2011 - R.S. Padvekar, R.K. Panda, JJ. Jaidev for the Appellant B. Jayakumar for the Respondent ORDER R.S. Padvekar: In this batch of three appeals two are filed by the assessee and remaining one is filed by the revenue and assessment years involved are 2006-07 and 2007-08. 2. We first take the appeal for the A.Y. 2006-07 being ITA no.1067/Mum/2010. Ground no.1 reads as under:- "1. The learned Commissioner of Income Tax (Appeals) erred in confirming the acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as credited other income of Rs. 83,82,964/- to the profit and loss account and same was included for in eligible profits for working out deduction u/s.80IB(10). In the opinion of the A.O. the other income shown by the assessee of Rs. 83,82,964/-has no direct relationship with the construction activity and that cannot be considered for computing the deduction u/s.80IB(10). He, accordingly, reduced the element of the other income of Rs. 83,81,964/- and thereafter worked out the deduction. In sum and substance, the claim of the assessee in respect of the deduction u/s.80IB(10) was reduced. The assessee carried the issue before the Ld. CIT (A) but without success. Now, the assessee is in appeal before us. 6. We have heard the parties and perused the record. The Ld. Counsel took us through the paper book, more particularly, page no.2 and submits that the assessee has collected the development charges, electricity charges, worked done to the buyers of the flats etc. and the said receipts are having direct nexus with the project of the assessee. He, therefore, pleaded that the same may be included in the eligible profit. Per contra, the Ld. D.R. vehemently submits that it is an extra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 Legal Charges 44,250.00 Total 4,173,230.60 9. We, therefore, hold that to the extent of Rs. 4,173,230.60 referred to the above, the same should be excluded from the eligible profit and balance has to be treated as part of the profit derived from the housing project. The A.O. is accordingly directed to work out the eligible profit in the light of the above discussion. Accordingly, ground no.2 is partly allowed. 10. So far as ground no.3 is concerned, the Ld. Counsel submits that the assessee is not pressing the said ground. As ground no.3 is not pressed the same is dismissed as not pressed. 11. Ground no.4 reads as under:- "4. The learned Commissioner of Income Tax (Appeals) further erred in disallowance of Rs. 23,96,673/- out of indirect expenses on the ground that the same should be reduced from the deduction allowable u/s.80IB(10) in respect of 'Sai Jyot' project as it relates to that project. 12. The facts pertaining to the issue are as under. In respect of 'Sai Jyot' project, it was noticed by the A.O. that the proportionate indirect expenses debited to the PandL account were not considered while working out the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observation and directions in paras 7.3 and 7.4 of the order." 14. Now, the assessee has raised the grievance against the directions of the Ld. CIT (A). 15. We have heard the parties and perused the records. The Ld. Counsel argued that apart from the common office expenses relating to the 'Sai Jyot' Project of Rs. 23,96,673/- eligible profit of the 'Sai Jyot' has been reduced for working of deduction u/s.80IB(10). He further submits that over and above the same, the A.O. has separately disallowed the said indirect expenses of Rs. 23,96,673/- while computing the total income which is not correct. In our opinion, the Ld. CIT (A) has merely given direction to follow the order in the assessee's sister concern on the identical issue, more particularly, in the case of M/s. Ganga Developers and copy of which is placed at page nos.59 to 71 of the paper book in ITA no.9136/Mum/2004 dated 28.06.2007. Nothing is there on the record to show that the order of the Tribunal in the case of M/s. Ganga Developers has been challenged further. In our opinion, the assessee should not have any grievance as M/s. Ganga Developers is one of the assessee's sister concern having identical issue for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt with identical issue in the assessee's appeal for the A.Y. 2006-07. In this year also the Ld. CIT (A) has restored the issue to the file of the A.O. with the direction to decide the same after considering the decision of the Tribunal in the assessee's own sister concern viz. M/s. Ganga Developers (supra) for the A.Y. 2001-02. We find no reason to interfere with the order of the Ld. CIT (A) on this issue as admittedly the issue is kept open by the Ld. CIT (A). We, accordingly, dismiss ground no. 3 22. Now, we take-up revenue's appeal for the A.Y. 2006-07 being ITA no.2626 of 2010. 23. Ground no.1 reads as under:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the disallowance of Rs. 1,60,000/- and Rs. 40,000/- being payments made u/s.40A(2)(b) by the assessee on account of Business Centre Charges and Administrative Charges respectively, to it's sister concern M/s. Kukreja Services Pvt. Ltd., for services rendered; without appreciating the facts that the assessee failed to provide any cogent evidence in support of any services rendered by it's sister concern." 24. The Ld. CIT DR was fair enough to submit that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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