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TMI Blog2014 (10) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... llant on actual payment basis in respect of following items of expenses incurred in relation to real estate project without appreciating that claim had been made by the appellant for the reason that department was not accepted allowability of expenses on accrual basis and appeals in respect of thereof are pending for adjudication before the Delhi High Court. a) Payment on account of fly over cost to MCD ₹ 605.00 lacs. b) Payment on account of interest on fly over cost to MCD ₹ 172.06 lacs. c) Payment of principle amount to builders ₹ 44.00 lacs. d) Expenditure in respect of approvals and permissions ₹ 60.09 lacs. e) Expenditure on removal of squatters ₹ 37.25 lacs. 2. That the order passed by the Assessing Officer and upheld by the CIT(A) is bad in law. 3. That the Appellant Company craves leave to alter, amend, vary and / or add any of the grounds of appeal at any time hereinafter. 3. The ground raised in the Revenue s appeal read as under:- 1. Whether the Ld. CIT(A) on the facts and circumstances of the case and in law is correct in deleting the deduction of ₹ 110.08 lacs on account of interest payable on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re squarely covered against the assesee compnay in view of the order of ITAT for the different assessment years as under:- Disallowing the aternate claim made by the company on actual payment basis for the reason that Department is disputing the allowability of expenses on accrual basis in respect of:- 7.1 As regards Payment on account of fly over cost to MCD ₹ 605.00 lacs is concerned, we find that ITAT in assessee s own case for the asstt. Year 2004-05 in ITA NO. 2799/Del/2008 Ors. has adjuidciated the matter as under:- 5. We have consdiered the rival submissions. In regard to the issue of disallowance of ₹ 12.21 crores being the expenses which had been disallowed by the AO as also the issue of disallowance of fly over cost of ₹ 13.50 croes and the issue of interest payable to MCD in respect of outstanding flyover cost, it is noticed that for the assessment year 1993-94 to 1996-97 the revenue has included the income on the sale of property rights on the entering into the agreement with the buyers and the expenses on account of land and develpoment incurred by the assessee has been allowed in proportion to the area sold by applying the matching prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of land and development incurred by the assessee has been allowed in proportion to the area sold but applying the matching principle. It is also noticed that in the later years, the assessee has accepted the stand of the revenue and has also been following the same practice. For the relevant assessment year, it is noticed that the Assesisng Officer has changed his stand just because the assessee has transferred the complete rights in the project as a whole to M/s Purearth Infrrastructure Ltd. When a particular method of compuation of income of the assesee has been followed and has been accpeted and is also followed by the revenue and the assessee, just because the total rights in the project has been transferred, such method cannot be changed as by the change of the method, the exspenses otherwise allowable to the assessee, is now being denied which is not a permissible act. In these circumstances, we are of the view that the action of the CIT(A) in directing the Assessing Officer to allow the deduction of the said expenses is on right footing and do not call for any interference. 7.3 As regards Payment of principle amount to builders ₹ 44.00 lacs. is concerned , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different orders of the ITAT for the separate assessment years, as aforesaid. Hence, respectfully following the precedent, we dismiss all the aforesaid grounds of the assessee. 8. In the result, the appeal filed by the assessee stands dismissed. Revenue s appeal 9. With regard to ground whether the Ld. CIT(A) on the facts and circumstances of the case and in law is correct in deleting the deduction of ₹ 110.08 lacs on account of interest payable on accrual basis to MCD lacs is concerned , we find that ITAT in assessee s own case for the asstt. Year 2006-07 in ITA NO. 314/Del/10 Ors. . has adjuidciated the matter as under:- 2.1 It is the common case of both the parties that the grounds stand covered in favor of the assessee company by the order of the Tribunal in ITA No. 1983/Del/09 for assessment year 2005-06 dated 17.11.2009, a copy of which has been placed in the paper book on page nos. C-3 to C-10. In this order, reliance has been placed on the roders of the Tribunal for earlier years in the case of the assessee. Therefore, we think it fit to reproduce the paragraph from that order, which as discussed the issue in detail. In regard to ground no. 2 regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the issue is squarely covered by the decision of the Coordinate Bench of this Tribunal in the assessee s own case for the assessment year 2003-04 referred to supra and consequently respectuflly following the decision of the Coordinate Bench of this Tribunal in the assessee s own case for the assesment year 2003-04, the findings of the Ld. CIT(A) on this issue stand upheld. 9.2 With regard to ground Whether the Ld. CIT(A) on the facts and circumstances of the case and in law is correct in restricting the disallowance to ₹ 11,77,550/- as against ₹ 23,66,795/- made by the AO u/s. 14A of the I.T. Act is concerned we find that Hon ble Delhi High Court Decision in the case of Maxopp Investment Ltd. Vs. CIT order dated 18.11.2011 has held that disallowance has to be on a reasonable basis and Rule 8D is not applicable to the assessment year prior to asstt. Year 2008-09. Accordingly, we find that Ld. CIT(A) was correct to direct the AO to restrict the disallowance to ₹ 11,77,550/- (Rs. 9,77,550/) on account of interest plus ₹ 2 lacs on account of adminsitrative expenses) as against disallownce of ₹ 2366,795/- made by the AO. And accordingly, gave a rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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