9911796707
TMI Blog2020 (8) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of Real Estate Development. The return of income was filed declaring total income of Rs. 41,12,96,510/- The case was selected for scrutiny. During the course of assessment proceedings, apart from other two issues, the Assessing Officer (AO) noted that the assessee had incurred expenditure of Rs.60,84,530/- on account of completed projects- (Uniworld Garden-1). The assessee was asked to furnish justification for allowability of such expenditure related to completed projects. It was the assessee's contention that since some of the work of the project Uniworld Garden-1could not be completed within the year ending 31st March, 2009 (the year in which the project was treated as complete by the AO), the remaining work as per the agreement with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the holding company. However, the Ld. CIT (A) directed that since the assessee company had free reserves of 39.30 crores, the holding company would be liable to tax as deemed dividend u/s 2(22)(e) of the Income Tax Act, 1961 (hereinafter called 'the Act'.) in the hands of the holding company with respect to the interest free advances. The Ld. CIT (A) also upheld the Assessing Officer view that interest on FDRs should be taxed under the head of income from other sources. 2.3 Now, the assessee is before this Tribunal challenging the order of the Ld. First Appellate Authority by raising the following grounds of appeal: "1) That order made u/s 250 of the Income Tax Act dated 05/05/2016 by the learned CIT (Appeals)-22 is erroneous in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was not being pressed. Accordingly, this ground is dismissed as not having being pressed. 3.1 With respect to Ground No.2, the Ld. Authorized Representative submitted that the disallowance of Rs.60,84,530/- being expenses relating to the Uniworld Garden-1 project was against the principal of equity and natural justice because even if the project had been completed on completion contract method, it did not mean that the residual and incidental expenses related to the project cannot be accounted for in the succeeding year. It was submitted that, undisputedly, the assessee is following the completed contract method but the impugned expenditure was general in nature and did not impact the recognition of Revenue in Assessment Year 2010-11. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urred on the said project subsequent to its completion could not be allowed. The Ld. CIT (A), while upholding the disallowance placed reliance on the judgment of the Hon'ble Bombay High Court in the case of Taparia Tools Ltd. vs. Joint Commissioner of Income Tax, reported in [2003] 260 ITR 102 (Bombay) and held that the impugned expenditure could not be allowed as the receipts from the concerned project had already been offered to tax in the earlier assessment year. However, we find that the Hon'ble Delhi High Court in the case of Gopal Das Estates & Housing Pvt. Ltd. vs. CIT reported in [2019] 103 Taxmann.com 334 (Delhi) has held that in the case of an assessee following completed contract method, the expenditure incurred subsequent to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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