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TMI Blog2024 (3) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. See Gee Industrial Enterprises [ 2015 (8) TMI 181 - PUNJAB HARYANA HIGH COURT] which comes to the rescue of the assessee. This decision has duly considered the decision in the case of Dinesh Kumar Goel [ 2010 (10) TMI 287 - DELHI HIGH COURT] and Excel Industries Ltd [ 2013 (10) TMI 324 - SUPREME COURT] - Thus no infirmity in the order of the CIT(A) and accordingly, ground 1 raised by the revenue is dismissed. Disallowance u/s 14A of the Act where there is no exempt income - HELD THAT:- This issue is no longer res integra in view of the recent decision of PCIT Vs. Era Infrastructure Ltd [ 2022 (7) TMI 1093 - DELHI HIGH COURT] wherein, it was held categorically that if there is no exempt income earned by the assessee, disallowance u/s 14A of the Act cannot be pressed into service. Respectfully following the same, ground No. 2 raised by the revenue is dismissed. - Shri M. Balaganesh, Accountant Member And Shri Yogesh Kumar Us, Judicial Member For the Assessee : Shri Somil Agarwal, Adv., Shri Deepesh Garg, Adv For the Revenue : Shri Vivek Kumar Upadhyay, Sr. DR ORDER PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.563/Del/2020 for AY 2015-16, arises out of the order of the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition thereon. 4. Before the ld CIT(A), the assessee reiterated its submission by stating that it had obtained necessary approval for construction of 10 towers for total construction area of 1173937 sq ft. Necessary attention was drawn to the approved building plan together with the fee paid challan thereon. It was submitted that even marketing brochure released for marketing of the project reflected that 10 towers were offered for sale which also contained technical specification of all the flats for 10 towers. The assessee submitted that booking for sale of flats started for all the 10 towers. In support of this, copies of the ledger, booking agreement were enclosed to prove that flats in towers 8 to 10 which were either cancelled by the customer or refunded by the company due to its subsequent decision of not to construct 4 towers i.e. DG-8, DG-9, DG-10, DG- 11. The assessee submitted that the detailed circumstances leading to delay in construction i.e. court stay due to agitation by farmers, adverse economic conditions, excess supply of similar projects in surrounding areas etc. which resulted in sharp decline of the demand and pricing. It was submitted all these factors c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of 10 towers but since the market conditions were not good, the project was restricted to 6 towers in FY 2014-15 and therefore, the total saleable area was reduced to 6,62,925 in subsequent years. It was further contended that keeping in view the total saleable area of 11,73,937 sq. feet in this year, the percentage of construction cost to the total construction cost was less than 25% and therefore, revenue was not recognized on the basis of percentage of completion method (POCM). In support of this argument, the AR has furnished the copy of marketing brochure and the approved plan of the project which shows that the complete project consisted of construction of ten towers. The AR has further submitted that bookings were sought in all the ten towers and after the plan was restricted to construction of six towers, the customers who had booked the flats in the balance four towers were allotted flats in the six towers being constructed or money was refunded to the customers. In this context, the AR has furnished the copies of ledger accounts and booking agreements to show that bookings were made in the four towers which were later decided not to be constructed. The AR has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hod as per which the percentage of completion of the project was below 25% and therefore, revenue was not recognized during the year. Moreover, it is observed that the appellant has shown the revenue in accordance with POCM method in subsequent years. this regard, the AR has relied upon various decisions. The contentions of the AR have been found to be correct and it is seen that the appellant has already declared the revenue from the project in subsequent years to the extent of 98.62%. In case revenue is recognized in the current year also as done by the AO, the total revenue recognized would exceed the total actual/projected revenue and the computation of profits from the project would be required to be recomputed in all the subsequent years also leading to avoidable complications and without any benefit to the revenue. Keeping in view all these facts, the addition made by the AO is deleted and the grounds of appeal are allowed.) 7. We find that none of the aforesaid factual observations made by the ld CIT(A) were controverted by the revenue by bringing in contrary materials before us. Further, we find the rate of tax in AY 2014-15 and 2015-16 remains the same. It is a fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s energies in fighting matters of this kind. But, obviously, judging from the references that come up to us every now and then, the Department appears to delight in raising points of this character which do not affect the taxability of the assessee or the tax that the Department is likely to collect from him whether in one year or the other. 6. This judgment was followed by the Delhi High Court in Commissioner of income-Tax and Another v. Dinesh Kumar Goel (2011) 333 ITR 10 (Delhi). The Delhi High Court, after quoting the above observations, observed as under:- 26. Though our discussion on the issue is complete the parting comments need to be made. The receipts relate to the unexecuted packages, which are not shown in the instant year would be shown in the succeeding year. Rate of tax in respect of companies remains the same in all these years. Therefore, the Revenue does not lose anything, as it would receive the tax on this income in the succeeding year. Still issues are raised and much outcry is made for nothing XXX XXX XXX XXX XXX XXX XX 28. In this Court, in its decision dt. 6 May. 2008 IT Ref. No. 229 of 1988 entitled CIT vs. Vishnu Industrial Gases (P) Ltd had quoted the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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