9911796707
TMI Blog2019 (7) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,401/- 1) The learned Commissioner of Income Tax (Appeals) - 17, Mumbai [CIT(A)] erred on facts and in law in confirming the order of the Income Tax Officer - 10(3)(4), Mumbai (AO) disallowing interest of Rs. 7,03,401/- without appreciating that the appellant had sufficient non-interest bearing funds to give the advances. 2) The appellant prays that the disallowance of interest of Rs. 7,03,401/- as made by the AO and as confirmed by the CIT(A), may be deleted, B)Taxing rent of Rs. 21,150/- 3) The learned CIT(A) erred on facts and in law in confirming the order of the AO taxing the rent received by the appellant of Rs. 21,150/- as the income of the appellant. 4) The appellant prays that the addition made by the AO of Rs. 21,150/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has been assessed u/s 143(3) for impugned AY on 19/03/2015 wherein the income has been assessed at Rs. 5.21 Lacs as against Nil return filed by the assessee on 12/11/2012. 2.2 During assessment proceedings, it transpired that the assessee advanced interest-free deposit for Rs. 58.61 Lacs whereas the assessee was paying interest @12% on its borrowings. The aggregate borrowings stood at Rs. 1338.35 Lacs and the assessee debited interest of Rs. 82.68 Lacs under the head work-in-progress [WIP] since the projects were not completed and the assessee was following project completion method of accounting to recognize the revenue. Accordingly, proportionate interest @12% amounting to Rs. 7.03 Lacs on stated interest free deposit of Rs. 58 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 24/03/2017 where the stand of Ld. AO got confirmed. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Authorized Representative for assessee contested the stand of lower authorities whereas Ld. DR supported the stand in the impugned order. 5. We have carefully heard the rival submissions and perused relevant material on record. The perusal of financial statements as placed on record reveal that the assessee's free funds in the shape of Share Capital and Reserves far exceeds the interest free deposits granted by the assessee. Another feature to be noted is that there is very minor increase in the deposits during the impugned AY. Therefore, a presumption was to be drawn in assessee's favor that the stated depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the record that the assessee was pursuing only one project which was at the above stated site. All costs under the project have been capitalized by the assessee under the head stock-in-process following project completion method of accounting. No expenditure has been claimed in the Profit & Loss Account during impugned AY. The perusal of Schedule 13 - Other Expenses reveal that the assessee has paid compensation of Rs. 3 Lacs to tenants which has also been capitalized under the same head and not claimed as an expenditure. The aforesaid factors would reveal that all the activities & transactions being carried out by the assessee, in unison, were in furtherance of carrying out the stated project only and part and parcel of the unified constr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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