M/s. Millennia Developers (P) Ltd., Bangalore V. DCIT, Bangalore

ITA 1341/BANG/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9406 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 03-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Assessee Lawyers: S VENKATESAN
• Keywords: Business expenditure; Bad and doubtful debts; TDS; Set aside
• Section: 37(1); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI K.K. GUPTA, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE, K, JUDICIAL MEMBER ITA NO.1341(BANG)/2008 (ASSESSMENT YEAR: 2005-06) M/S. MILLENNIA DEVELOPERS (P) LTD., THE MILLENIA, 12 TH & 14 TH FLOOR, TOWER B, NO.1 & 2, MURPHY ROAD, ULSOOR, BANGALORE. .... APPELLANT VS. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1(4), BANGALORE. .... RESPONDENT APPELLANT BY : SHRI S.VENKATESAN. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI. O R D E R PER GEORGE GEORGE K, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. CIT(A)-VI, BANGALORE, DATED 14-8-2008. THE ASSESSMENT YEAR CONCERNED IS 2005-06. 2. IN ALL, FIVE GROUNDS ARE RAISED, OUT OF WHICH G ROUND NOS.1 & 2 ARE GENERAL AND NO ADJUDICATION IS CALLED FOR. GROUND NO.4 IS CONSEQUENTIAL AND SAME IS DISMISSED. THE REMAINING EFFECTIVE GROUNDS ARE AS FOLLOWS: 2. THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN MA KING A DISALLOWANCE OF RS.4,40,500/- BEING THE COMPOUNDIN G FEE PAID BY THE APPELLANT TO THE BANGALORE MAHANAGA RA PALIKE FOR MODIFICATION OF THE SANCTIONED PLAN AND REGULARIZATION OF DEVIATIONS HOLDING THAT THE SAME ITA 1341/B/2008 PAGE 2 OF 11 AMOUNTS TO PAYMENT OF PENALTY UNDER THE FACTS AND I N THE CIRCUMSTANCES OF THE APPELLANTS CASE. 3. THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN MAK ING A DISALLOWANCE OF RS.12,30,693/- OUT OF PROVISION FOR PROJECT EXPENSES MADE ON MERCANTILE BASIS BY THE APPELLANT HOLDING THAT THE SAME WAS NOT AN ALLOWABL E DEDUCTION UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE? 3. FACTS IN RELATION TO THE SECOND GROUND ARE AS F OLLOWS: THE ASSESSEE CONSTRUCTED A COMMERCIAL BUILDING CONS ISTING OF BASEMENT, GROUND AND THREE UPPER FLOORS. ON COMPLE TION OF BUILDING, THERE WERE CERTAIN CHANGES FROM THE SANCT IONED PLAN. THESE CHANGES WERE REGULARIZED BY THE COMMISSIONER OF BANGALORE MAHANAGARA PALIKE (BMP). AN AMOUNT OF RS.4,40,500/- WAS PAID FOR REGULARIZING SUCH DEVIAT ION. THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT PAID IS IN THE NATURE OF FEE AND NOT PENALTY WAS REJECTED BY THE AO. THE AO DISALLOWED THE CLAIM OF DEDUCTION OF RS.4,40,500/-. ON APPEAL, LD. CIT(A), AFFIRMED THE ACTION OF THE AO BY HOLDIN G THUS: I HAVE GONE THROUGH THE CITED CASE LAW. I FIND T HE FACTS OF CITED CASE ARE DIFFERENT FROM THE CASE ON HAND. ON OTHER HAND, ON SIMILAR ISSUE THE JURISDICTIONAL HIG H COURT HAS HELD SUCH EXPENDITURE IS NOT ALLOWABLE UNDER IT LAW. IN THE CASE OF CIT VS. MAMATA ENTERPRISES 266 ITR 3 56 (KARNATAKA) IT HAS BEEN HELD THAT : THE EXPENDITURE INCURRED TO PAY THE PENALTY CANNOT BE TREATED AS LOSS IN BUSINESS TO GET THE BENEFIT. IN OUR VIEW THE PENALTY PAID HAS ENSURED THE BENEFIT O F THE ASSESSEE TO SAVE THE ADDITIONAL CONSTRUCTION PU T ITA 1341/B/2008 PAGE 3 OF 11 UP IN VIOLATION OF THE PROVISIONS OF THE ACT AND BY LAWS FRAMED THERE-UNDER AND ALSO THE CONSEQUENCE OF PENAL PROVISIONS PROVIDED UNDER THE CORPORATION OR MUNICIPAL LAW. THE VIEW WE HAVE TAKEN ABOVE IS FULLY SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HAJI AZIA AND ABDUL SHAKOOR BROS (1961) 41 ITR 350. 4. THE ASSESSEE BEING AGGRIEVED, IS IN APPEAL BEFOR E US. LEARNED AR STATED THAT COMPOUNDING FEE IS PAID FOR REGULARIZING DEVIATION TO THE SANCTIONED PLAN. IT WAS FURTHER S UBMITTED SAID DEVIATION IS WITHIN THE PERMISSIBLE LIMIT OF 5%. H E REFERRED TO VARIOUS PROVISIONS OF THE KARNATAKA MUNICIPAL CORPO RATION ACT AND BANGALORE MAHANAGARA PALIKE BUILDING BYE-LAWS 2003, WHICH ARE PLACED ON RECORD. LD. AR SUBMITTED, THE CASE OF TH E JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MAMATA ENTERPRISES (266 ITR 356)(KAR.) RELIED ON BY THE LD. CIT(A) IS NOT APPLI CABLE TO THE FACTS OF THE INSTANT CASE. IT WAS SUBMITTED, THE H ONBLE HIGH COURT WAS CONSIDERING A CASE WHERE ASSESSEE HAS PUT UP 8 TH FLOOR IN AN APARTMENT WITHOUT THERE BEING SANCTIONED PLAN UNLIKE IN THIS CASE WHERE BUILDING CONSTRUCTION IS AS PER THE SANC TIONED PLAN WITH MINOR DEVIATION WITH FAR OF 4.792%. IT WAS SU BMITTED THAT FOR SUCH DEVIATION, COMPOUNDING FEE IS PAID AND THE SAME, BY NO STRETCH OF IMAGINATION, CAN BE TERMED AS A PENALTY. HE FURTHER SUBMITTED, THERE IS DISTINCTION BETWEEN VIOLATION A ND DEVIATION AND IN THE INSTANT CASE, IT IS DEVIATION UNLIKE I N THE CASE OF JURISDICTIONAL HIGH COURT WHEREIN IT IS A CASE OF VIOLATION. ON THE OTHER HAND, LEARNED DR STRONGLY RELIED ON T HE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF MAMATA ITA 1341/B/2008 PAGE 4 OF 11 ENTERPRISES (SUPRA) AND THE ORDER OF THE TRIBUNAL IN ITA NO.10 71, 10187 & 1088/BANG/06 DATED 23-10-2008 IN THE CASE O F M/S. PRESTIGE ESTATES PROJECTS (P) LTD. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED MATE RIAL ON RECORD. WE ARE OF THE VIEW, THIS CASE IS COVERED B Y THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF MAMATA ENTERPRISES (SUPRA). IT IS ADMITTED THAT THERE HAS BEEN A DEVIATION FROM THE SANCTIONED PLAN APPROVED BY THE BMP. SUCH DEVIATION WAS APPROVED BY THE PROCEEDINGS OF THE PL AN SCREENING COMMITTEE HELD ON 9-8-2004. COPY OF THE PROCEEDING S IS PLACED ON RECORD IN THE PAPER BOOK FILED BY THE ASSESSEE. THE RELEVANT PORTION OF THE SAME READS AS FOLLOWS: THE APPLICATION IS FOR ISSUE OF OCCUPANCY CERTIFIC ATE FOR COMMERCIAL BUILDING. BASEMENT + THREE UPPER FLOORS ARE COMPLETED AS PER SANCTIONED PLAN WITH DEVIATIONS SUCH AS FAR 4.792%. APART FROM THIS SOME ADDITIONAL CONSTRUCTION IS MADE IN TERRACE FLOOR. THE SAID DEVIATIONS CAN BE REGULARIZED AFTER LEVYING PE NALTY AS PER THE COMMISSIONERS CIRCULARS DATED 19-7-2001. A FINE OF RS.4,40,500/- IS WORKED OUT FOR THE ABOVE DEVIATIONS. SINCE THE DEVIATIONS EFFECTED IN THE BU ILDING IS WITHIN COMPOUNDABLE LIMIT OF 5% AND NOT CAUSING ANY HINDRANCE TO THE ADJACENT NEIGHBOURS, OCCUPANCY CERTIFICATE IS RECOMMENDED BY THE COMMITTEE SUBJECT TO LEVY OF FIND WORKED OUT IN THE FILE. 5.1 BASED ON THE ABOVE PROCEEDINGS OF THE PLAN SCRE ENING COMMITTEE, OCCUPANCY CERTIFICATE WAS ISSUED BY THE CORPORATION ITA 1341/B/2008 PAGE 5 OF 11 ON 20-8-2004 ON PAYMENT OF RS.4,40,500/-. IN THE O CCUPANCY CERTIFICATE, IT IS MENTIONED, DEVIATION IS REGULARI ZED BY THE COMMISSIONER IN HIS NOTE DATED 18-8-2004 AS RECOMME NDED BY THE COMMITTEE BY LEVYING PENALTY OF RS.4,40,500/-. 5.2 IN THE CASE OF MAMATA ENTERPRISES (SUPRA) ALSO, OFFENCE HAS BEEN COMMITTED BY CONSTRUCTING 8 TH FLOOR OF THE BUILDING WITHOUT BEING APPROVED OR SANCTIONED BY THE COMMISS IONER OR THE CORPORATION. NO DOUBT, AS RIGHTLY POINTED OUT BY T HE LD. AR, IN THE CASE OF MAMATA ENTERPRISES (SUPRA), WHICH WAS CONSIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT, IT WAS THE C ASE OF VIOLATION AND IN THE INSTANT CASE IT IS THE CASE OF DEVIATION FROM THE SANCTIONED PLAN. HOWEVER, THE CRUX OF THE ISSUE IS IRRESPECTIVE OF THE NATURE OF VIOLATION, THE OFFENCE COMMITTED BY B OTH HAVE BEEN REGULARIZED BY THE COMMISSIONER BY LEVYING PENALTY/ FINE IN THE FORM OF COMPOUNDING FEES AND FOR PAYMENT OF THE COM POUNDING FEES, IT IS TRACED TO THE SAME SECTION WHETHER IT B E A CASE OF VIOLATION OR DEVIATION FROM THE SANCTIONED PLAN. SECTION 483(B) EMPOWERS THE COMMISSIONER TO COMPOUND ANY OFFENCE A GAINST THIS ACT. IT IS ONLY ON THE STRENGTH OF THE SAID S ECTION, THE COMMISSIONER HAS COMPOUNDED THE OFFENCE BOTH IN THE ASSESSEES CASE AS WELL AS IN THE CASE OF MAMATA ENTERPRISES, THOUGH THE KIND OF OFFENCE AND MAGNITUDE OF THE OFF ENCE DIFFERS. IN OTHER WORDS, IT IS IN THE SAME SECTION THAT THE OFFENCE COMMITTED HAS BEEN ABSOLVED BY LEVYING COMPOUNDING FEES/FINE OR PENALTY. IN THE CASE OF MAMATA ENTERPRISES (SUPRA) THE HONBLE HIGH COURT HAS HELD THAT ANY SUCH PAYMENT C ANNOT BE ITA 1341/B/2008 PAGE 6 OF 11 CLAIMED AND ALLOWED AS BUSINESS EXPENDITURE IN TERM S OF EXPLANATION TO SECTION 37(1) OF THE ACT. HERE, IT IS INTERESTING TO POINT OUT THAT DEVIATION/VIOLATION IS CONSIDERED AS SAME AND PAYMENT OF PENALTY AND FINE IS TRACEABLE TO THE SAM E PROVISIONS WHEREBY BOTH IS REGULARIZED. THEREFORE, WE ARE OF THE VIEW THAT THE DISTINCTION POINTED OUT BY THE LD. AR DOES NOT MATERIALLY AFFECT THE POSITION OF THIS CASE. 5.3 MORE OVER, IN THE CASE OF M/S. PRESTIGE ESTATE S PROJECTS (P) LTD. (ITA NO.1071, 10187 & 1088/BANG/06 DATED 2 3-10- 2008) THE TRIBUNAL HAD FOLLOWED THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF MAMATA ENTERPRISES (SUPRA). PRESTIGE ESTATES CASE WAS A CASE OF DEVIATION FROM THE SANCTIONED P LAN AND NOT THE CASE OF VIOLATION. THE TRIBUNAL, AT PAGE 19 OF ITS ORDER, HAD HELD AS FOLLOWS: WE HAVE ALSO SEEN THE QUANTUM OF FEES PAID FOR SANCTIONED PLAN AND THE AMOUNT CHARGED/PAID FOR REGULARIZATION OF DEVIATION OF THE SANCTIONED PLAN. THE TRIBUNAL, IN THE CASE CITED SUPRA (PRESTIGE EST ATE) WAS CONSIDERING THE CASE OF DEVIATION FROM SANCTIONED P LAN, AND THEREFORE, DISTINCTION CITED BY THE LEARNED AR IS N OT AVAILABLE WITH REFERENCE TO THE DECISION OF THE TRIBUNAL IN THE PR ESTIGE ESTATES CASE. IN LIGHT OF THE ABOVE, RESPECTFULLY FOLLOWIN G THE DECISION OF THE JURISDICTIONAL HIGH COURT AND THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE CITED SUPRA, WE H OLD THIS ISSUE AGAINST THE ASSESSEE. 5.4 IN THE RESULT, GROUND NO.2 IS DISMISSED. ITA 1341/B/2008 PAGE 7 OF 11 6. FACTS IN RELATION TO THIRD GROUND REFERRED TO AB OVE ARE AS FOLLOWS: THE ASSESSEE HAD MADE A PROVISION FOR FUT URE EXPENSES OF PROJECT WOODSVALVE. SUCH PROVISION CAME TO R S.15,43,166/-. THE AO NOTICED, OUT OF THE PROVISION OF RS.15,43,16 6/- ONLY A SUM OF RS.3,12,473/- HAS BEEN INCURRED TILL DATE OF THE ASSESSMENT. THE AO FOUND, WOODSVALVE PROJECT WAS C OMPLETE AND WAS SOLD MUCH PRIOR TO THE CONCERNED ACCOUNTING YEAR. HENCE, HE HELD THAT THERE WAS NO JUSTIFICATION FOR KEEPING BALANCE PROVISION OF RS.12,30,693/- AT ALL IN THE ACCOUNTS AND DISALLOWED THE SAME. 6.1 ON APPEAL, IT WAS CONTENDED THAT THE AO HAD ERR ED IN DISALLOWING THE PROVISION FOR EXPENSES ON WORKS TO BE COMPLETED. IT WAS FURTHER ARGUED THAT THE AO HAS NOT APPRECIAT ED THE FACT THAT WHEN THE ASSESSEE HAD OFFERED TO INCOME THE P ROJECT AS COMPLETED AND THE PROJECT IS REQUIRED TO SEE CERTAI N AMOUNTS FURTHER TO BE SPENT, THE PROVISION MADE OUGHT TO HA VE BEEN ALLOWED AS A DEDUCTION. THE LD. CIT(A) DISMISSED T HE APPEAL BY HOLDING THUS: I FIND THAT THE APPELLANT HAS NOT BEEN ABLE TO PROVE THAT THE ADDED AMOUNT REPRESENTED CRYSTALLIZE D LIABILITY. FURTHER, I FIND CONTRADICTION IN THE ARG UMENTS OF AUTHORIZED REPRESENTATIVE. IF HIS ARGUMENTS ARE CONSIDERED TRUE, THEN THE AMOUNT OF RS.12,30,693/- HAS SUFFERED TAX NOT ONLY IN AY 2005-06 BUT ALSO IN 2007-08. BESIDES, PRINCIPLES OF RES JUDICATA IS NO T APPLICABLE TO INCOME TAX PROCEEDING. EACH ASSESSMEN T YEAR IS SEPARATE AND DIFFERENT. A PROVISION HAVING NO CERTAINTY OF CRYSTALLIZATION HAS TO BE TAXED AS INC OME ITA 1341/B/2008 PAGE 8 OF 11 AND THAT IS WHAT AO HAS DONE. I FIND THE ACTION OF AO JUSTIFIED. THEREFORE, I DISMISS THE GROUND AND UPH OLD THE ADDITION. 6.2 THE ASSESSEE, BEING AGGRIEVED, HAS FILED APPEAL ON THIS ISSUE. LD. AR REITERATED THE SUBMISSIONS MADE BEFO RE THE AUTHORITIES BELOW. FURTHER HE SUBMITTED, PROVISION HAS BEEN OFFERED FOR TAXATION IN THE ASSESSMENT YEAR 2007-08 . LEARNED DR FILED PAPER BOOK CONTAINING COPIES OF BALANCE-SHEET , PROFIT & LOSS ACCOUNT AND COPY OF LEDGER ACCOUNT OF PROJECT EXPEN SES PAYABLE, RUNNING INTO 16 PAGES. LEARNED DR SUPPORTED THE FI NDINGS OF THE AUTHORITIES BELOW. 6.3 WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED MAT ERIAL ON RECORD. THE PROJECT TITLED AS WOODSVALE INVOL VED CONSTRUCTION OF FLATS AND THE SAID PROJECT WAS COMPLETED IN THE YEAR PRIOR TO THIS FINANCIAL YEAR. AS A MATTER OF FACT, SOME FLA TS WERE SOLD DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMEN T YEAR UNDER CONSIDERATION. THIS CAN BE SEEN FROM THE PROFIT & L OSS ACCOUNT (PLACED AT PAGES 5 & 6 OF THE PAPER BOOK FILED BY T HE LEARNED DR). FOR THE SAID PROJECT THE ENTIRE REVENUE HAS B EEN RECOGNIZED DURING THE YEARS UP TO ASSESSMENT YEAR UNDER CONSID ERATION. THE ASSESSEE HAD MADE SOME PROVISIONS FOR CONTINGENT EX PENSES. AS CAN BE SEEN FROM THE LEDGER ACCOUNT (PLACED AT PAGE 12 OF THE PAPER BOOK FILED BY THE LEARNED DR) THE OPENING BAL ANCE AT THE BEGINNING OF THE FINANCIAL YEAR I.E. AS ON 1-4-2004 IS RS.1,03,51,905/- AND AFTER CLAIMING EXPENSES TO THE TUNE OF RS.63,95,198/- THE BALANCE AMOUNT OF RS.39,56,707 I S SHOWN AS ITA 1341/B/2008 PAGE 9 OF 11 THE CLOSING BALANCE OF THE SAID PROVISION AS ON 31- 3-2005. DURING THE FINANCIAL YEAR 2005-06, AN AMOUNT OF RS.7,13,54 0/- IS CLAIMED AS EXPENSES OUT OF THE SAID ACCOUNT AND RS. 17,00,000/- IS WRITTEN BACK AND OFFERED FOR TAX. THE BALANCE I N THIS ACCOUNT AS ON 31-3-2006 IS RS.15,43,167/-. IN THE FINANCIA L YEAR 2006- 07, RS.2,79,674/- IS DEBITED AND THE NARRATION IS T HAT IT IS TOWARDS PAYMENT OF TDS U/S 194C ON CONTRACT PAYMENT TO M/S. SHOBHA DEVELOPERS PVT. LTD., AND RS.32,799/- RELEAS E OF RETENTION MONEY OF THE SAID PROJECT ARE TAKEN AS EX PENSES AND THE SAID PROVISION ACCOUNT IS REDUCED TO RS.12,30,6 93/-. THIS AMOUNT WHICH IS NO LONGER REQUIRED TO BE SET ASIDE FOR EXPENSES HAS BEEN ADDED TO THE TOTAL INCOME IN THE ASSESSMEN T ORDER UNDER CONSIDERATION. AS THE REVENUE FROM THE SAID PROJECT IS CONSIDERED FOR THE YEAR RELEVANT TO THE INSTANT ASS ESSMENT YEAR DURING WHICH PERIOD THE PROJECT WAS COMPLETED ENTIR ELY, THE EXCESS PROVISION OF EXPENSES HAVE BEEN RIGHTLY ADDE D TO THE TOTAL INCOME. ON PERUSAL OF THE LEDGER ACCOUNT WHICH IS PLACED AT PAGE 16 OF THE PAPER BOOK FILED BY THE LEARNED DR, IT IS CLEAR THAT EXPENSES OF RS.2,79,674/- IS GIVEN AS PAYMENT FOR T DS AND SURCHARGE ON CONTRACT PAYMENT MADE TO M/S. SHOBHA D EVELOPERS PVT. LTD. EVEN THE RETENTION MONEY OF RS.32,799/- HAS BEEN PAID. THIS GOES TO SHOW THAT ALL THE EXPENSES PERTA INING TO THE SAID PROJECT HAS BEEN PAID AND THERE IS NO MORE EXP ENDITURE TO BE INCURRED. THUS THE AO HAS DISALLOWED THE EXCESS PROVISION MADE WHICH IS NO LONGER REQUIRED FOR EXPENDITURE OF THIS PROJECT. THE FACTS IN THE CASE OF M/S. K.RAHEJA DEVELOPERS C ORPORATION (ITA NO.1102/BANG/1998 DATED 28-2-2003), REFERRED T O BY THE ITA 1341/B/2008 PAGE 10 OF 11 LEARNED AR, ARE DISTINGUISHABLE FROM THE PRESENT CA SE. IN THE ABOVE CITED DECISION, THE ITAT HAS HELD THAT THE DI SALLOWANCE OF RS.15,12,600/- MADE BY THE AO, WHICH REPRESENTED EX PENDITURE YET TO BE INCURRED FOR COMPLETING THE SAID PROJECT IN ENTIRETY, WAS NOT IN ORDER. IN THAT CASE, THE PROJECT KNOWN AS R ESIDENCY A BLOCK WAS TAKEN UP BY THE ASSESSEE AND REVENUE WAS RECOGNIZED DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEA R UNDER APPEAL ON THE COMPLETED CONTRACT METHOD AND THE A SSESSEE DEBITED A SUM OF RS.15,12,600/- REPRESENTING EXPEND ITURE WHICH WAS YET TO BE INCURRED FOR COMPLETING THE SAID PROJ ECT IN ENTIRETY. IN CONTRACT TO THE FACTS OF THE CITED CASE, IN THE INSTANT CASE, THE ENTIRE PROJECT HAS BEEN COMPLETED, WHICH IS EVIDENT FROM THE FACT THAT FLATS HAVE BEEN SOLD. IN FACT, ASSESSEE HAS FU RNISHED COPIES OF REGISTERED SALE DEED DATED 12-5-2004. EVEN BAD DEBTS HAVE BEEN CLAIMED IN THE ASSESSMENT YEAR 2003-04. ALL TH ESE FACTS SHOW THAT CONSTRUCTION OF FLATS OF THE SAID PROJECT HAS BEEN COMPLETED AS EARLY AS 2002-03 RELEVANT TO ASSESSMEN T YEAR 2003-04. 6.4 HOWEVER, IT HAS BEEN ARGUED BY THE LD. AR, PROV ISION FOR FUTURE EXPENSES HAVE BEEN OFFERED TO TAXATION I N THE ASSESSMENT YEAR 2007-08. THERE ARE NO DETAILS FORT HCOMING WHETHER THE PROVISION WHICH IS CREATED IS OFFERED A ND ASSESSED FOR TAXATION IN ANY OF THE SUBSEQUENT YEARS. HAD PROVI SION BEEN OFFERED AND ASSESSED IN THE SUBSEQUENT YEAR, IT TAN TAMOUNT TO DOUBLE TAXATION. HENCE, THE MATTER IS REMITTED TO THE FILE OF THE AO FOR LIMITED PURPOSE OF ASCERTAINING WHETHER PROV ISION FOR ITA 1341/B/2008 PAGE 11 OF 11 EXPENDITURE DISALLOWED IN THE CONCERNED YEAR IS ASS ESSED IN ANY OF THE SUBSEQUENT YEAR AND TO GIVE CONSEQUENTIAL RE LIEF IN SUCH AN EVENTUALITY. THE AO IS AT LIBERTY TO CORRECT AND M ODIFY THE ASSESSMENT WHEREIN THE PROVISION HAS BEEN OFFERED A ND ASSESSED TO TAX (CLAIMED BY ASSESSEE, IT HAS BEEN OFFERED AN D ASSESSED TO TAX IN ASSESSMENT YEAR 2007-08). THE THIRD GROUND RAISED IS REMITTED TO THE FILE OF THE AO. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 7TH AUGUST, 2009. SD/- SD/- (K.K. GUPTA) (GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE: D A T E D : 7TH AUGUST, 2009. EKS* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A)-VI, BANGALORE. 5 DR, ITAT, BANGALORE. 6 GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRA R, ITAT, BANGALORE.