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TMI Blog2018 (4) TMI 1882X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the agreement at 12% as a part of business expenditure however disallowed interest paid over and above 12%, as additional payment of 3% is not covered in the normal course of the payment by assessee. It was held that the additional interest of 3% is penal in nature for failure to make payment of installment on time. No infirmity in such observation of Ld. CIT (A) - Decided against revenue. - ITA No. 5997/Del/2015 - - - Dated:- 5-4-2018 - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI BEENA A. PILLAI, JUDICIAL MEMBER For the Appellant : Sh. Ravi Kant Gupta, Sr. DR For the Respondent : None ORDER PER BEENA A. PILLAI, JUDICIAL MEMBER 1. Present appeal has been filed by revenue against order dated 21/08/15 pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the envelop by postal is left from the address . Assessee has not intimated any alternate address, to which further intimation could be sent. From the conduct of assessee, it appears that assessee is not interested in representing the case and accordingly we do not find any reason to again adjourned the case and keep the appeal pending. We accordingly decide the appeal in the absence of assessee as under. 3. Brief facts of the case are as under: 3.1 Assessee filed its return of income, declaring loss of ₹ 8,11,86,926/- vide return dated 24/09/12. The case was processed under section 143 (1), accordingly statutory notices were issued, in response to which representative of the assessee s appeared before Ld. AO and filed the deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penal in nature and accordingly disallowed it. 4. Aggrieved by the order of Ld. AO assessee preferred appeal before Ld. CIT (A) who decided the issue as under: 7. I have gone through the above submissions of the appellant and have considered the facts and evidences on record. 7.1 The appellant is a real estate developer and in the process of setting up a group housing society. As per the prerequisite in the agreement between appellant and HUDA, the charges related to EDC is required to be paid to the HUDA which includes such charges and payment of interest @12% per annum on the unpaid portion of the amount. As per the license, the developer has the option of paying EDC charges either in lump-sum within 30 days from the date of gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of section 43B of the Act. Making the provisions for interest on account of such agreement is like availing any other source of financing for which a businessman has to pay interest. It is also seen that the payment has been made subsequently to the HUDA authorities. Therefore, such interest payment pertaining to the year under consideration is nothing but a revenue expenditure, incurred towards the EDC charges. 7.3 However, it is seen that out of the total interest payment claimed at ₹ 1,74,48,000/- towards the EDC charges, ₹ 4,26,000/- has been claimed as penal interest paid @3% (over and above @12%) due to the delayed payments of installments beyond due date. This interest is related to the additional penal interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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