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TMI Blog2016 (11) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... m Cultivation involved a similar and identical exercise where ultimately the disallowance was set aside by the ITAT, the adoption of the same course of action in this case cannot be said to have been erroneous. Furthermore, in the eventuality of the transaction itself maturing the likelihood of the assessee being permitted to capitalize or include the interest component as part of the cost of land has not been disputed. If such is correct course of action, the reverse situation whereby the transaction does not mature, should also attract a similar treatment that the interest paid but not shown as deductible expenditure for the previous period should be permitted as prior period expenditure. - Decided in favour of the assessee - ITA 128/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent year 1992-1993, the assessee s computation of total income contained a note, which reads as under: .... The company acquired lands in village situated in Distt. Gurgaon and entered into agreement to sell with DLF Universal Ltd. Accordingly, the business has already commenced and the revenue expenses have been claimed in the Profit Loss A/C and in the return of income, except interest finance/ legal charges which have been excluded on the basis of stand of the department in other group cases that the same is includible in the cost of land (stock-in-trade). It is, however, claimed that the above disallowance has been made out of abundant caution and the same is allowable in this year, being a period cost which does not go to inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Appellate Tribunal ( ITAT ) in Vee Dee Investment Agencies Ltd. vs ACIT ITA No. 7663/Del/91. The CIT(A) also relied upon his own decision dated 13.12.1994 in appeal nos. 34/94-95 and 42/94-95 in the case of Kum Kum Cultivation Pvt. Ltd. The gist of the CIT(A) reasoning was that having regard to the assessee s method of accounting, which recognized expenditure by increasing the cost of land at the time of conveyance, since the AO accepted the method for past years, disallowance, he ought to have permitted prior period expenditure. The CIT(A) s reasoning was affirmed by the ITAT. 6. It is urged on behalf of the Revenue that ITAT and the CIT(A) fell into error in holding that prior period expenditure could be pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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