9911796707
TMI Blog2023 (11) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... vision for construction expenditures (Flat Sale) represent the proportionate expenditure apportioned to the units sold and this expenditure has been really paid in the subsequent financial year 2017-18. Therefore, these are the real expenses for which the assessee has made the provision and Ao examined the issue and took a possible view and completed the assessment. Therefore, such assessment order should not be considered as erroneous and prejudicial to the interest of revenue. When the Assessing Officer adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the Assessing Officer has taken one view with which the Ld. PCIT does not agree, it cannot be treated as an erron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er on the facts and in the circumstances of the case and in law, the Hon'ble ITAT erred in observing that the Ld. PCIT was not empowered and entitled to revise assessment order u/s. 263 of the Act r/w. Explanation 2 thereto by ignoring the fact that the Assessing Officer has passed the assessment order without making inquiries / verification as to how the estimation of provisions of construction expenditures was made and what was the method of recognizing income from the project, adopted by the Assessee- firm and which should have been made? (iii) Whether on the facts and Circumstances of the case and in law, the Hon'ble ITAT has erred in quashing the impugned order u/s. 263 of the I.T.Act and allowing all the grounds of the Assessee wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uting the income chargeable under the head Profits and Gains from Business or Profession. Since, the provision for construction expenditure is an un-ascertainable liability and is not allowable u/s. 37(1) of the Act, the above expenditure allowed by the AO in the assessment order is not in order. 2.3 Considering the reply of the assessee where it was his case that provisions of construction expenditures represent the proportionate estimate expenditures apportioned to units sold, the CIT held that the AO had not verified the correctness of the provisions of construction expenses claimed by the assessee. The CIT held that no inquiry was made by the AO in respect of construction expenditures, claimed by the assessee as provisions in preceding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count. The assessee made payment of these expenses at Rs. 45,22,435/- in the next financial year. The provision for construction expenses so made by the assessee has been reversed in next financial year, that is, the assessee has not claimed these expenses in next financial year. Hence, we note that assessee has made provision for construction expenses of Rs. 45,22,435/- with reliable estimate, and the same were paid in the next financial year, such provision should be allowed. We note that Assessing Officer has properly examined the provision for construction expenses to the tune of Rs. 45,22,435/- and allowed the claim of the assessee, therefore order passed by the Assessing Officer under section 143(3) of the Act, should not be erroneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted its reply stating that provision for construction expenditures (Flat Sale) of Rs. 45,22,435/- represent the proportionate expenditure apportioned to the units sold and this expenditure has been really paid in the subsequent financial year 2017-18. Therefore, these are the real expenses for which the assessee has made the provision and Assessing Officer examined the issue and took a possible view and completed the assessment. Therefore, such assessment order should not be considered as erroneous and prejudicial to the interest of revenue. 3. Relying on the decision in the case of Malabar Industries Ltd vs. CIT., reported in [2000] 243 ITR 83 (SC), the Tribunal found that twin conditions needs to be satisfied before exercising revisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
