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TMI Blog2021 (8) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly, we uphold the same. The grounds of the appeal of the Revenue are accordingly dismissed. - ITA No. 7238/Del/2017 - - - Dated:- 27-8-2021 - SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI K.N. CHARY, JUDICIAL MEMBER Appellant by : Sh. Vipul Kashyap, Sr.DR Respondent by : Sh. Ved Jain, Adv. ORDER PER O. P. KANT, AM This appeal by the Revenue is directed against order dated 13/09/2017 passed by the Ld. Commissioner of Income-tax (Appeals)-29, New Delhi [in short the Ld. CIT(A) ] for assessment year 2014-15, raising following grounds: 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is right in deleting the addition of ₹ 8,17,42,528/- being amount debited as interest ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case is HUDA, for works related to water supply, sewerage, drains, roads, street lights etc which are integral part of a residential housing project and would therefore definitely constitute part of the cost of such projects. Therefore, the contention of the AR that EDC payable is not recoverable from buyers and further that it does not add anything to the physical development of the project is not acceptable. iii) Further, the interest on EDC, in the case of the assessee company has been paid in respect of housing project which is part of cost of materials consumed/work in progress which would constitute stock of the assessee company and not a fixed asset as per the analogy of car as given by the assessee. In view of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision, therefore, on identical facts the same is followed. 4. Aggrieved, the Revenue is in appeal raising the grounds as reproduced above. 5. Before us, the parties appeared through Video Conferencing facility and filed documents and synopsis through email. 6. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The learned counsel of the assessee brought to our attention that identical issue in assessment year 2012-13, the Tribunal in ITA No. 5342/Del/2015, has upheld the order of the Ld. CIT(A) deleting the disallowance. The relevant part of the decision of the Tribunal (supra) is reproduced as under: 6. We have considered the rival submission and perused t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- Section 37(1) of the Income Tax Act, 1961 Business expenditure - Allowability of [Penalty/Illegal payments] - Assessee was engaged in manufacture and trade of gold jewellery - Assessee claimed that it used to import jewellery manufacturing machinery under Export Promotion Council Goods Scheme (EPCG Scheme) at a concessional rate with an export obligation which it could not fulfill and, thus, was required to pay interest to DGFT - Assessee's claim for deduction of interest was rejected on ground that said payment was penal in nature Commissioner (Appeals) as well as Tribunal held that amount paid was not penal in nature as much as it was as per declared policy of Government and occasioned by failure of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the work-in-progress. The interest payment on the outstanding balance in respect of the trade creditors is revenue in nature and allowable expenditure while computing business income. Accordingly, we uphold the order of the CIT (A) deleting the above addition. 6.1 As the Tribunal (supra) has held that the interest payment as revenue expenditure and not penal in nature, therefore respectfully following the same, the interest expenditure on delayed payment for EDC charges paid to HUDA in the year under consideration is allowable to the assessee. We do not find any error in the order of the Ld. CIT(A) and accordingly, we uphold the same. The grounds of the appeal of the Revenue are accordingly dismissed. 7. In the result, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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