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TMI Blog2020 (12) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the assessee in reducing interest from partners from work-in-progress in the immediately preceding assessment year and also in the immediately succeeding assessment year, we see no reason to reject the very same treatment given by the assessee for the interest received from the partners for the current Assessment Year i.e. A.Y. 2010-11. Therefore, applying principle of consistency we direct the Assessing Officer to delete the addition made under the head income from other sources . Ground of appeal is allowed. - ITA No. 6244/MUM/2018 - - - Dated:- 9-11-2020 - Shri C.N. Prasad, Hon'ble Judicial Member And Shri S. Rifaur Rahman, Hon'ble Accountant Member For the Assessee : Shri Rohan Ochani For the Department : Mrs. Kavita P. Kaushik ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals) 26, Mumbai [hereinafter in short Ld.CIT(A) ] dated 04.09.2018 for the A.Y: 2010-11. 2. Assessee has raised following grounds in its appeal: - 1. BECAUSE, Ld. CIT(A) has erred in law and on facts in upholding the unsecured loans of ₹ 48,94,662/- as unexplaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kapasi 6. Hirabai Virji Bhanushali 7. Hirji Ravji Patel 8. Mitesh Navin Mage HUF 9. Sunil Y. Landge 10. Vijay M. Bhanushali 11. Atmaram R. Landge 12. BecharaGokar Patel 13. Ketan Patel 14. Mohan Murji Bhanushali 15. Nilesh Patel 16. Ratanshi V. Dedhia 5. Ld. Counsel for the assessee referring to Page Nos. 71 to 128 of the Paper Book submitted that assessee furnished additional evidences before the Tribunal giving all the necessary details in respect of the above 16 creditors as the information could not be obtained in the course of assessment proceedings or before appellate proceedings and therefore since all these information were collected subsequently and are going to the root of the matter the additional evidences furnished may be admitted for adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received ₹.52,22,821/- towards interest from its partners and credited to its Profit and Loss Account and at the same time it was reduced from the closing work in progress. The Assessing Officer was of the view that the interest received from partners is taxable under the head income from other sources . The Assessing Officer also observed that since the assessee following the project completion method which effectively means that the business of the assessee is in pre-production stage for the current year, no expenditure that may have been incurred by it during the year is connected to the earning of interest. Referring to the decision of the Hon'ble Supreme Court in the case of M/s. Tuticorin Alkali Chemicals and Fertilizers Limited [227 ITR 172], Assessing Officer observed that an amount of ₹.52,27,162/- received by the assessee on account of interest charged to partners is an independent source not connected with construction activities. Accordingly, he brought to tax the said income under the head income from other sources . Before the Ld.CIT(A) the assessee contended that interest received from partners goes to reduce capital expenses during pre-construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plot No. 807 and Plot NO. 786 situated at TTC Industrial Estate, Navi Mumbai. Accordingly, the Appellant has undertaken the construction activity on these plots and constricted part building on Plot No. 807 and incurred cost thereon. (ii) A dispute arose between the Appellant and Unitech Group in relation to grant of development rights through the said MoU. A Conciliator was appointed to resolve the dispute and the; differences between the Appellant and Unitech Group under the Arbitration and Conciliation Act, 1996. Accordingly, a deed; of Conciliation was executed to evidence the terms of settlement wherein it was decided that the Appellant shall surrender the development rights acquired on plot no 807 along with the partly constructed building in favour of the land owners i.e Unitech group and shall acquire all the right title and interest of plot no 786 absolutely in its favour. (lii) The Appellant has been maintaining separate books of accounts for these 2 projects. The Valuation of partly constructed building on plot no. 807 was arrived at ₹ 6.60 crores and consideration for acquisition of plot no 786 was arrived at ₹.8.5 crores. Accordingly following ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .under appeal as income. The said interest income was reduced from the closing work-in-progress for plot no.736 as mentioned in chart above and thus closing work-in-progress of plot no.786 was arrived at ₹ 9,10,97,029/-. Ld. AO inadvertently missed to take into account the interest amount while calculating the closing work-in-progress of plot no.786 (refer page-no.8 of the assessment order). No adverse finding is given in respect of the said interest amount. On the contrary Ld.AO, assessed the same as income for the year by not allowing the same to be reduced from WIP. Hence, the said amount should be allowed to be reduced from the closing work-in-progress of plot no.786. (x) CC for Plot no. 807 was issued by MIDC vide letter dated 09/10/2010. CC for Plot no. 786 was issued by MIDC vide letter dated 21/11/2009. DECISION:- (i) On 31/12/2007, Appellant entered into an MOU with M/s.Unitech Group for development of plot no. 807 and Plot no. 786 respectively and undertook construction. Details of work in progress till 31/03/2011 filed before AO vide submission dated 18/11/2013. (ii) When under construction dispute arose between parties, Settled through Con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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