9911796707
TMI Blog2021 (6) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(3) of the Income Tax Act, 1961 [hereinafter referred to as the 'Act'] dated 29.3.2016 for the Assessment Year 2013-14. 2. The only issue to be decided in this appeal is as to whether the ld. Commissioner of Income Tax (Appeals [for short 'the CIT(A)] was justified in upholding the disallowance of prior period interest expenses of Rs. 7,61,59,332/- which relates to work-in-progress in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. We find that assessee-company is engaged in the business of real estate development and had derived loss from business during the year. The return of income for the Assessment Year (AY) 2013-14 was filed on 30.11.2013 declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have gone through the detailed break up of items included in the closing work-in-progress which admittedly include this interest expenses of Rs. 761,59,332/-. For the sake of convenience, the said working is reproduced hereunder: Reconciliation of Expenses transferred to P&L A/c and Capitalised to Inventory Group & Account Heads P&L WIP Opening WIP 56,17,74,204 Add: Additional Expenses 22,86,369 11,95,88,418 Admin OH Balances Written back (1) Contm. To PF & Other Fund 1,34,504 Depreciation 2,74,264 Directors fees & Travelling 5,52,036 14,40,000 Donation 20,000 Employee-Staff Welfare 80647 Other Expense 4,09,978 4,41,373 Salary, Bonus, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the opening work-in-progress of Rs. 56.17 crores and the opening work-in-progress thereon would have increased by Rs. 7.61 crores being the interest expenses. Since no provision was made by the assessee in AY 2012-13 for this interest expense, it was not included in the opening work-in-progress at Rs. 56.17 crores. 8. We find that assessee had included the same in the closing work-in-progress in AY 2012-13. Hence this is a clear case of omission of booking an expenditure to the closing work in progress, which was rectified during the year under consideration. In any case, we find that assessee has not claimed any deduction for the same warranting any disallowance. Hence, we also find that assessee has furnished Profit & Loss Account fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Dr.) Particulars Amount (Cr.) To Opening inventory 56,17,74,204 By Revenue from operations 5,11,62,091 To Cost of Construction 4,52,87,138 By Share of profits/ (loss) from joint ventures and partnership firms To Employee benefit Expense 54,25,544 17,04,330 To Finance Costs 10,37,932 By Closing Inventory (Includes interest of prior period of Rs. 7,61,59,332) 63,49,03,661 To Depreciation and Amortization 2,74,264 To other expenses 2,67,13,525 68,77,70,082 To Profit before extra ordinary items and tax 4,72,57,475 4,72,57,475 68,77,70,082 To Prior period Adjustment 7,61,59,332 To ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
