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TMI Blog2014 (4) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing." 2. We have heard and considered the arguments advanced by the parties in view of the orders of the authorities below, material available on record and the decisions relied upon. Ground no. 1 3. The relevant facts are that the assessee, is engaged in the business of real estate and development. During the year the Assessing Officer made several disallowances out of which Rs.15,05,000/- was disallowed by the Assessing Officer on account of internal development expenditure not claimed in the profit and loss account. The contention of the assessee remained that this expenditure was not claimed by the assessee in the profit and loss account but the same was included in the work-in-progress. It was submitted that the claimed development expenditure was actually incurred during the year. It was relating to Security Charges, Conversion Charges, Road Work etc. The Ld. CIT (A) has deleted theses disallowance which has been questioned by the Revenue in this ground. 4. At the out set, the Ld. AR submitted that the issue raised is fully covered by the decision of the Tribunal in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer that out of the total development expenditure incurred on internal development, expenditure on the maintenance billing services could not be treated as expenses for construction and development and hence was not allowable. Similar issue arose in appeals of the appellant for earlier years and in terms of appellate orders, the Assessing Officer had been directed to delete such disallowance and the Assessing Officer was directed to consider the same as part of work in progress. The Hon'ble ITAT 'B' Bench vide its recent order dated 09.04.2009 in ITA No.93/Del/2008 for A. Y. 2004-05 in appellant's own case decided this issue in favour of the appellant. Relevant extracts from the said order is reproduced as under: 5. After considering rival submissions, we find that the issue has been decided in favour of the assessee by the Tribunal in appeal for assessment year 1994-95. 'This fact has been confirmed by both the counsels. Since the internal development expenses are debited to work in progress account and the expenses debited to profit and loss account are in proportion to properties conveyanced is allowable. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt years. This has not resulted in any profit to the Revenue, but has only increased the administrative work, both for the Revenue, as well as, for the assessee. This is evident from the fact that, in remand proceedings, the actual income from business (loss) has been increased to Rs.79,82,5161-. The relevant para is last sub para of para 3 at page no.7 of the AD's order dated 24.03.2000 which is reproduced hereunder: The assessee company has submitted the details in respect of the total area of land of the colony known as DLF Qutab Enclave, total licensed area of the colony, area under plots. Group housing, area under commercial use, area under roads, park and area under community sites, total expenses for internal development of the colony actually incurred and debited to the Profit & Loss Account. The assessee company has also submitted the working of the profits/loss on constructed properties on possession basis as also the revised working of the Trading Account as per the findings of the learned CIT(A)-23 for Asstt. Year 1994-95. According to the revised working, the G. P. will go down by a figure of Rs.79,82, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d deduction of 30% claimed by the assessee u/s 24(a) of the I. T. Act, as a result of reclassification of the income from house property to income from other sources. 11. The Ld. AR pointed out that the issue raised is also covered by the decision of the Tribunal in the case of assessee itself for the assessment year 2001-02 in ITA No.3377/Del/2000 and for the assessment year 1996-97 in ITA No.3522/Del/2000. He pointed out further that the first appellate authority has also decided the issue in favour of the assessee in the case assessee itself of the assessment years 2006-07, 2007-08 & 2008-09. He submitted further that there is no change in the facts and circumstances of the case in this regard during the year under appeal. 12. The Ld. Departmental Representative on the other hand tried to justify the assessment order on the issue. 13. We find that the Ld. CIT (A) has discussed the issue in detail and has given its finding in this regard in para no.6.14 of the first appellate order, reproduced hereunder: "6.14 I have considered the submission of the appellant, observation of the Assessing Officer and decision of Hon'ble ITAT for A. Y 1996-97 in appellant's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts, related to provisions of law and decision of the Tribunal of the issue in the case of the assessee itself in other assessment years. We are of the view that the Ld. CIT (A) has rightly decided the issue in favour of the assessee with direction to treat the income from such properties as income from house property and to allow deduction u/s 24(a) of the Act. The first appellate order in this regard is thus upheld. Ground No.2 is accordingly rejected. Ground no.3 16. The Assessing Officer made an addition of Rs.3,02,61,251/- on account of notional rent/ additional annual letting value (ALB) u/s 23(1)(a) of the Income tax Act,1961, in respect of vacant properties. The details of the addition as per the assessment order is as under: DLF City Centre Rs.2,36,01,310/- DLF Commercial Shopping Complex Rs. 27,21,360/- DLF Corporate Park Rs.1,69,07,688/- Rs.4,32,30,358/- Less: Standard Deduction u/s 24(1) Rs. 1,29,69,107/- Rs.3,02,61,250/- 17. The Ld. CIT (A) has deleted the addition after discussing the case of the asessee in detail and following the decision cited before him in this regard including decision of 'D' Bench of the Tribunal on an identical iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopers Vs. ACIT reported in 23 SOT 19 (Del) and orders of CIT(Appeals) in appellant's own case for the Assessment years 2006-07, 2007-08 & 2008-09. It is observed that" where there was an intention to let out the house property and assessee took steps to let it but could not get suitable tenant, in such cases the annual value will have to be worked out under section 23(1)(c) of the IT Act and according to this clause, if the actual rent received / receivable during the year is Nil then that has to be taken as annual value of the property in order to compute the income from property." In the case of appellant, the appellant had intention to let such properties but could not get suitable tenant. In such a situation, the AL V will be Nil as per provision of section 23(1)(c) of the IT Act. Section 23(1)(a) r.w.s 23(1)(c) clearly provides that if the property remain vacant wholly or partly during the year, then actual rent received or receivable will be taken as the ALV of such properties. In the case of appellant the property is remained vacant, therefore, the ALV of such properties will be Nil. Hence, no notional rent can be estimated in the case of vacant p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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