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TMI Blog2013 (12) TMI 1736X X X X Extracts X X X X X X X X Extracts X X X X ..... common order for the sake of convenience. The effective grounds of assessee s appeal in ITA No. 925/Ahd/2012 are as under: 1. The learned CIT(A) has erred in law and on facts in confirming the addition of Rs.6,67,849/- out of total addition of Rs.79,41,759/- made by the AO on account of disallowance of land restoration expenses. In view of facts of the case, submissions and evidences filed and available on record, the impugned addition of Rs.6,67,849/- also requires to be deleted. 2. The learned CIT(A) has further erred in not appreciating the fact that in respect of expenditure to the extent of Rs.6,67,849/-, the corresponding projects having been completed in earlier year, the income was booked in the earlier year and only a small ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this was an argument before the ld. CIT(A) that the expenses are incurred by the assessee for land leveling which were excavated in the course of laying pipelines. We also find that the profit loss account of the assessee is appearing on page No.95 of the Paper Book, as per which, assessee has shown income from operations of Rs.635.159 lacs and has shown increase/(decrease) in closing stock of Rs.13.047 lacs. The details of increase/(decrease) in stock are shown in schedule at page 99 of the Paper Book wherein closing stock was shown at Rs.25.950 lacs whereas opening stock was shown at Rs.12.902 lacs. Now the question is as to whether the receipt on account of laying of pipe lines in respect of which it is claimed that the land leve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowable if there is corresponding income disclosed during the year. If there is no income disclosed then the expenses should be taken to closing stock and the same will be allowable in the year in which income is shown. This decision was on the basis of matching principle. Accordingly appellant was asked to provide details of land restoration expenses project wise and income disclosed in respect of the said project. Appellant submitted the chart showing 16 projects on which land restoration expenses were incurred. Out of these 16 projects, appellant disclosed income in respect of 9 projects either directly under land restoration income or income from the project. Details received from the appellant were provided to the assessing offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d corresponding income which was wrongly not mentioned in the chart. I have verified the same and found that there is substantial income received during the year from this project and therefore this expense is also allowable as per the directions of ITAT. Accordingly total expenses allowed Is RS 72,73,910 out of claim of RS 79,41,759. The balance expenses RS 6,67,849 is treated as not relating to the projects on which income was received during the year. Accordingly the disallowance made by the AO is confirmed to the extent of Rs.6,67,849/-. 4. Now the assessee is before us. Ld. A.R. for the appellant further argued that the Revenue has already been disclosed but some land restoration expenses were paid after the completion of project a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side the issue to the CIT(A) for considering the nature of the expenditure, accordingly, the CIT(A) had given reasonable opportunity to the appellant in second round along with the ld. A.O., who had submitted written reply vide letter dated 01.03.2013. But remand report filed by the A.O. is silent on this issue, whether he again considered the nature of expenditure in his remand report or not. The ld. CIT(A) has not given any finding on this issue in the second round also. It is true that in first round, the assessee did not furnish any reply to the A.O. and had not clarified the nature of expenses. In first round, the ld. CIT(A) without calling the remand report from the A.O. accepted the submission of appellant. On that basis, the Co-ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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