THE GRREEN TRIVENI DEVELOPER, Jaipur V. CIT-1, Jaipur

ITA 291/JPR/2014

• Counselvise Citation: 29123114 RSA 2014
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROLEE AGARWAL DHK
• Keywords: Business expenditure; Assessment record
• Section: 143(3); 142(1); 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 291/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 M/S. THE GREEN TRIVENI DEVELOPER, 309-310, CITY PEARL, OPP. HOTEL GANGAUR, M.I. ROAD, JAIPUR CUKE VS. THE CIT-1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAFFT 5998 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL JKTLO DH VKSJ LS@ REVENUE BY :SMT. ROLEE AGARWAL (CIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 11/12/2014 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24 /02/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT-1, JAIPUR DATED 28-03-2014 FOR THE ASSESSMENT Y EAR 2009-10 U/S 263 OF THE ACT WHEREIN THE ASSESSEE HAS RAISED FOLLOWI NG GROUNDS IN ITS APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED U/S 263 OF THE AC T BY THE WORTHY CIT IS ILLEGAL, BAD IN LAW AND WITHOUT JURIS DICTION. ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE WORTHY CIT ERRED IN HOLDING TH AT THE ORDER PASSED U/S 143(3) OF THE I.T. ACT, 1961 BY TH E AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E AS THE AO ALLOWED THE PROVISION FOR DEVELOPMENT EXPENSES W ITHOUT ANY VERIFICATION AN DISCUSSION. THE WORTHY CIT PASS ED THE ORDER U/S 263 OF THE I.T. ACT WITHOUT APPRECIATING THE FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E AO EXAMINED THIS ISSUE IN DETAIL AND SEVERAL QUERIES O N THIS ISSUE WERE MADE AND REPLIED THEREOF WERE FLED BEFORE THE AO. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE WORTHY CIT WAS NOT JUSTIFIED I N INVOKING THE PROCEEDINGS OF SECTION 263 AND SETTING ASIDE TH E ORDER PASSED BY THE AO U/S 143(3) OF THE I.T. ACT AND DIR ECTING THE AO TO VERIFY THE CLAIM OF PROVISION FOR DEVELOPMENT EXPENSES. 4. THAT THE ORDER OF THE CIT DESERVES TO BE CANCELLED. 2.1 BRIEF FACTS ARE - ASSESSEE IS A PARTNERSHIP FIR M ENGAGED IN THE BUSINESS OF REAL ESTATE MAINLY MAKING COLONIES ON A GRICULTURE LANDS PURCHASED AND AFTER SEEKING DUE PERMISSIONS FOR CON VERSIONS INCLUDING JDA APPROVALS. AFTER APPROVAL OF TOWNSHIP PLAN AND MAP BY JDA THE DEVELOPMENT WORK IS COMMENCED I.E. CONSTRUCTION OF ROAD, LAYING OF WATER SUPPLY LINES AND PROVIDING ELECTRICAL POLLS A ND WIRING, CONSTRUCTION OF OVERHEAD TANKS ETC.. AFTER PROPER DEVELOPMENT OF RESIDENTIAL AND COMMERCIAL PLOTS SAME ARE ALLOTTED/SOLD TO CUSTOMER S. THE ASSESSEE MAINTAINS PROPER BOOKS OF ACCOUNT FOLLOWING MERCANT ILE METHOD OF ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 3 ACCOUNTING WHICH ARE AUDITED U/S 44AB OF INCOME TAX ACT. RETURN OF INCOME FOR THIS YEAR DECLARING TOTAL INCOME AT RS.9 ,37,036/- WAS FILED ON 12.09.2009. THE CASE WAS SELECTED FOR SCRUTINY. CO NSEQUENTLY LD. AO ISSUED NOTICES U/S 143(2); 142(1) AND OTHER INFORMA TION AS ASKED FOR FROM TIME TO TIME SUPPLIED TO THE SATISFACTION OF AO. AF TER DUE VERIFICATION LD AO ACCEPTED THE RETURNED INCOME BY PASSING THE ORDE R U/S 143(3) OF INCOME TAX ACT. 2.2 HOWEVER LD. CIT-I, JAIPUR ISSUED SHOW CAUSE NOT ICE DATED 18/03/2014 U/S 263 OF INCOME TAX ACT, 1961. IT ALLE GED THAT THE ORDER WAS ERRONEOUS AS A SUM OF RS. 1,46,08,190/- UNDER THE H EAD PROVISION FOR DEVELOPMENT EXPENSES IS NOT AN ALLOWABLE EXP ENSES BECAUSE AS PER PROVISIONS OF INCOME TAX ACT THE EXPENSES ACTUA LLY INCURRED ARE ONLY ALLOWABLE. THE ASSESSEE OBJECTED TO THE PROCEEDINGS U/S 263 VIDE DETAILED LETTER DATED 24/03/2014 ALONG WITH THE SUPPORTING E NCLOSURES, CLAIMING THAT THERE WAS NO ERROR COMMITTED BY AO IN ALLOWIN G THIS EXPENDITURE AND THERE WAS NO PREJUDICE TO REVENUE IN THIS BEHAL F; VARIOUS OTHER SUBMISSIONS WERE MADE AND CASE LAWS RELIED, DURING THE COURSE OF HEARING. LD. CIT-I, JAIPUR REJECTED ASSESSEES CONT ENTIONS AND HELD SECTION 143(3) ORDER TO BE ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF REVENUE AS PASSED IN A CASUAL MANNER WITHOUT CONSID ERING THE RELEVANT ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 4 PROVISIONS. LD. CIT THOUGH HELD THAT LIABILITY OF D EVELOPMENT EXPENSES IN RESPECT OF PLOTS SOLD HAVE TO BE ALLOWED AGAINST TH E SALE RECEIPTS, THE ASSESSMENT ORDER WAS SET ASIDE FOR LIMITED PURPOSE DIRECTING AO TO ALLOW THE PROVISIONS IN RESPECT OF SALES AFFECTED QUA WHI CH PROCEEDS ARE OFFERED FOR TAX AND WHETHER THE DEVELOPMENT EXPENSES HAVE B EEN ESTIMATED IN ACCORDANCE WITH GUIDELINES ISSUED BY JDA BY FOLLOWI NG OBSERVATIONS: PARA 4 - I HAVE DULY CONSIDERED THE SUBMISSION OF THE ASSESSEE AND MATERIAL AVAILABLE ON RECORD. IT IS EV IDENT FROM RECORDS THAT THE ASSESSMENT ORDER WAS PASSED BY AO WITHOUT CONSIDERING THE FACTS OF THE ISSUE AND RELEVANT PRO VISIONS OF THE ACT. ASSESSMENT WAS COMPLETED IN A VERY CASUAL MANNER AN D THE ASSESSMENT ORDER IS A NON-SPEAKING ORDER. AO HAS NO T EXAMINED WHETHER THE PROVISIONS OF RS. 1,46,08,190/- WAS MAD E BY ASSESSEE ON SCIENTIFIC OR LOGICAL BASIS. I THEREFORE HOLD TH AT THE ASSESSMENT ORDER DATED 01-12-2011 WAS ERRONEOUS IN SO FAR AS I T WAS PREJUDICIAL TO THE INTEREST OF REVENUE IN TERMS OF SEC. 263 OF IT ACT. I AGREE WITH THE CONTENTION OF LD AR THAT DEVELOPER HAS TO INCUR SEVERAL EXPENSES ON THE DEVELOPMENT OF THE SC HEME AND THE COST OF THESE EXPENSES ARE INCLUDED IN THE SALE PRI CE OF PLOTS. IF THE ENTIRE SALE PRICE OF THE PLOTS SOLD DURING THE YEAR ARE OFFERED FOR TAX, LIABILITY OF DEVELOPMENT EXPENSES IN RESPECT O F PLOTS SOLD HAVE TO BE ALLOWED AGAINST THE SALE RECEIPTS. THE PRINCI PLE HAS BEEN LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF BH ARAT EARTH MOVERS VS CIT (245 ITR 428) AND ROTORK CONTROLS IND IA (P) LTD VS CIT (314 ITR 62). HOWEVER, THE LIABILITY OF THE DEVELOPMENT ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 5 EXPENSES SHOULD BE ESTIMATED ON A SCIENTIFIC BASIS. SINCE THE AO HAS NOT EXAMINED AND VERIFIED THE EXPENSES OF RS. 1 ,46,08,190/- CLAIMED AS PROVISIONS THE ASSESSMENT ORDER IS SET ASIDE FOR THE LIMITED PURPOSE OF EXAMINING AND DECIDING THE ISSUE OF ALLOWABILITY OF EXPENSES OF RS. 1,46,08,190/- CLAIMED AS PROVISI ONS. AO IS DIRECTED TO VERIFY WHETHER THE PROVISIONS ARE MADE ONLY IN RESPECT OF SALES AFFECTED DURING THE YEAR RECEIPT OF WHICH ARE OFFERED FOR TAX AND WHETHER THE DEVELOPMENT EXPENSES HAVE BEEN ESTI MATED IN ACCORDANCE WITH GUIDELINES ISSUED BY THE JDA. AO SH OULD ALLOW REASONABLE OPPORTUNITY OR HEARING TO THE ASSESSEE. 2.3 AGGRIEVED AGAINST THIS ORDER, ASSESSEE IS BEFORE US. 2.4 LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT LD C IT IS NOT CORRECT IN HOLDING THAT THE ASSESSMENT ORDER WAS PASSED IN A C ASUAL MANNER AND WITHOUT CONSIDERING THE FACTS OF THE ISSUE AND RELE VANT PROVISIONS OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, LD AO RAISED SPECIFIC QUERY ON THE ISSUE OF CLAIM OF DEVELOPMENT EXPENSES WHICH IS EVIDENT FROM PARA 3 OF LETTER DT 12/07/2011 PLACED AT PB PG 34 . THE ASSESSEE SUBMITTED DETAILED REPLY AND IN PARA 3 OF ITS LETTE R DATED 13/09/2011 PLACED AT PB PG 38-41 EXPLAINED ABOUT THE ALLOWABILITY AND JUSTIFICATION OF PROVISION FOR DEVELOPMENT EXPENSES, WHICH IS SUP PORTED BY SEVERAL CASE LAWS. INQUIRY DID NOT END HERE AS LD. AO FURTH ER RAISED QUERIES. IN RESPONSE THERETO ASSESSEE FURTHER EXPLAINED THE JUS TIFICATION OF ALLOWABILITY OF PROVISION VIDE LETTER PLACED ON PB 46 CITING CASE OF M/S ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 6 SALASAR OVERSEAS PVT . LTD . ON FURTHER QUERY RAISED BY THE AO, THE ASSESSEE EXPLAINED TOTAL PROJECT COST VIZ A VIZ SA LES AND PROFIT VIDE ITS LETTER DATED 16/11/2011 PLACED AT PB PG 47-48, ASSE SSEE FILED PROPER BREAKUP OF DEVELOPMENT EXPENSES ALONG WITH COPY OF JDA CIRCULARS REGARDING THE MANDATORY DEVELOPMENT EXPENSES LIABIL ITY IN THE DEVELOPERS PLACED ( JDA CIRCULARS ARE PLACED AT 64-85 ). THIS COPIOUS CORRESPONDENCE AND PROCEEDINGS MAKE IT VERY CLEAR T HAT THIS ISSUE WAS EXAMINED BY THE LD AO IN DETAIL DURING THE COURSE O F ASSESSMENT PROCEEDINGS. CONSEQUENTLY THE ADVERSE OBSERVATIONS OF LD CIT THAT THE ASSESSMENT ORDER WAS PASSED IN A CASUAL MANNER WITH OUT CONSIDERING THE FACTS OF THE ISSUE AND RELEVANT PROVISIONS OF THE A CT IS UNTENABLE AND CONTRARY TO THE RECORD. IT IS PLEADED THAT ASSESSE E HAS NO CONTROL ON THE MANNER LD. AO DRAFTS ASSESSMENT ORDER; GENERALLY TH E ISSUES WHICH ARE ACCEPTED BY THE ASSESSING OFFICER MAY NOT FIND MENT ION IN THE ASSESSMENT ORDER. AS A GENERAL PRACTICE ONLY THOSE ISSUES ARE MENTIONED IN THE ASSESSMENT ORDER ON WHICH THE ASSESSEES EXPLANATIO N IS REJECTED AND ADDITIONS/DISALLOWANCES ARE MADE. WITH DEMONSTRATIV ELY VOLUMINOUS DISCUSSIONS ON ASSESSMENT RECORD; MERE ABSENCE OF S PECIFIC MENTION OF ISSUE WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND WHILE ALLOWING IT. RELIANCE IS PLACED ON THE FINDIN GS OF HONBLE DELHI ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 7 HIGH COURT IN THE CASE OF CIT V. HONDA SEIL POWER P RODUCTS LTD. (2011) 333 ITR 547 (DEL) HOLDING AS UNDER - (I) (II) IT IS ALSO CLEAR THAT WHILE PASSING AN ORDER U/S.263, THE COMMISSIONER HAS TO EXAMINE NOT ONLY THE ASSESSMENT ORDER, BUT ALSO THE ENTIRE RECORD. SINCE THE ASSESS EE HAS NO CONTROL OVER THE WAY AN ASSESSMENT ORDER IS DRAFTED AND SINCE GENERALLY THE ISSUES WHICH ARE ACCEPTED BY THE ASSESSING OFFICER, DO NOT FIND MENT ION IN THE ASSESSMENT ORDER AND ONLY THOSE POINTS ARE TAKEN NOTE OF ON WHICH THE ASSESSEES EXPLANATIONS ARE REJECTED AND ADDITIONS/DISALLOWANCES ARE MADE, IN T HE INSTANT CASE, THE MERE ABSENCE OF THE DISCUSSION OF THE PROVISIONS OF S. 80-IB(13), R/W. S. 80-IA(9), WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND TO THE SAID PROVISIONS. (III). WHEN A REGULAR ASSESSMENT IS MADE U/S. 143(3 ), A PRESUMPTION CAN BE RAISED THAT THE ORDER HAS BEEN PASSED UPON AN APPLICATION OF MIND. NO DOUBT, THIS PRESUMPTION IS REBUTTABLE, BUT THERE MUST BE SOME MATERIAL TO INDICATE THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND. THE AO CALLED NECESSARY DETAILS IN THIS REGARD AND THE MATTER WAS EXAMINED IN DETAIL, THE BREAKUP OF DEVELOPMENT EXPE NSES WAS FILED DURING ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 8 THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE AO AND IS PLACED AT PB PG 49 SHOWING THE FOLLOWING WORKING:- I) RS. 250/- TO BE DEPOSITED IN JDA AGAINST CONVERSION ETC CHARGES AND THE SAME IS INCLUDED IN SALES OF ASSESSEE. II) RS. 50/- AGAINST ROAD CONSTRUCTION. III) RS. 42/- WATER LINES AND OVERHEAD TANKS IV) RS. 37/- ELECTRICITY WORK. V) RS. 21/- DRAINAGE SYSTEM, PARK ETC. RS. 400/- TOTAL BESIDES THIS, FOLLOWING DOCUMENTS ARE ON THE ASSE SSMENT RECORD : I. COPY OF JDA CIRCULARS FILED ALONGWITH THIS LETTER - PB PG 64 TO 85. II. WORKING FOR THE PROVISION CLEARLY DEMONSTRATING THA T THE ESTIMATED LIABILITY AGAINST EXPENSES IS RS. 400/- P ER SQ. YARD AND ACTUAL EXPENSES INCURRED DURING THIS YEAR WERE RS.137.11 PER SQ YARD AND RS. 262.80/- PER SQ. YARD YET TO BE INCURRED. THE PLOT AREA SOLD DURING THIS YEAR WAS 55567.44. T HEREFORE THE PROVISION OF RS. 1,46,08,190.59/- (55567.44 X 2 62.89) WAS MADE AGAINST THE PLOT AREA SOLD. THE SALE OF TH E PLOT AREA 55567.44 IS OFFERED FOR TAXATION WHICH IS APPARENT FROM SCHEME TRADING ACCOUNT PB PG 17 AND WORKING FOR PROJECT COST AND SALES FILED BEFORE AO COPY AT PB PG 48 . FURTHER THE COPY OF JDA CIRCULAR FILED BEFORE THE AO, THE A O HAS VERIFIED THAT PROVISION IS IN ACCORDANCE WITH THE J DA CIRCULAR PB PAGE 45 . ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 9 THE LD CIT HAS NO ISSUE ON ASSESSEES FOLLOWING MER CANTILE SYSTEM OF ACCOUNTING AND LIABILITY BEING ALLOWABLE; SET ASIDE THE ASSESSMENT ORDER AGAIN TO AO FOR LIMITED PURPOSE TO VERIFY THAT:- (I) PROVISION HAS BEEN MADE IN RESPECT TO THE AREA SOLD OFFERED FOR TAXATION. (II) DEVELOPMENT EXPENSES WERE ESTIMATED IN ACCORDA NCE WITH JDA CIRCULAR. IT IS CONTENDED THAT THE LD CIT COMMITTED MISTAKE I N HOLDING THIS EXPENDITURE BEING ALLOWED WITHOUT APPLYING MIND FRA MING THE ASSESSMENT IN CASUAL MANNER AND LIABILITY ALLOWABLE ON OFFER O F SALES BASIS. THE FINDING THAT ASSESSMENT ORDER IS ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF REVENUE IS BASELESS, CONTRARY TO RECORD WHICH CO NTAINS ABOVE DOCUMENTARY EVIDENCE AND PROCEEDINGS DEMONSTRATING THAT ORDER WAS PASSED AFTER PROPER VERIFICATION AND EXAMINATION OF EXPENDITURE. RELIANCE IS PLACED ON FOLLOWING CASES: I. M/S SALASAR OVERSEAS PVT LTD IN ITA NO 433/JP/2011 ORDER DATED 22-11-2011. II. S. MURUGAN V. ITO (2012) 135 ITD 527 (CHENNAI) (TRI B.) III. CIT VS JAIN CONSTRUCTION CO (2013) 257 CTR (RA J) IV. CIT VS GANPAT RAM VISHNOI (2008) 296 ITR 292 ( RAJ) ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 10 V. CIT VS. SHRI GANESH PRINT FAB.(P) LTD, (ITAT, JO DHPUR), ITA NO. 357/ JU/2010 DATED 13.01.2012. VI CIT VS DEEPAK REAL ESTATE DEVELOPERS LTD 107 DT R (RAJ) 259 VII CIT V. SMT TASNEEM Z MADRASWALA 324 ITR 67 (MAD .), VIII CIT VS. DLF LTD. [2013] 350 ITR 555 (DELHI) IX CIT V. ARVIND JEWELLER , 259 ITR 502 (GUJ.), X CIT VS SMT. D VALLIAMMAL (1998) 230 ITR 695 (MAD) . XI CIT VS HASTINGS PROPERTIES (2002) 253 ITR 124 (C AL). XII CIT VS MAX INDIA LTD (2007) 295 ITR 282 (SC) (XIII) MALABAR INDUSTRIAL CO LTD VS CIT (2000) 243 ITR 83 (SC) 2.5 LD. CIT (DR) CONTENDS THAT ASSESSEE HAD MADE A HUGE CLAIM OF DEVELOPMENT EXPENSES QUA DEVELOPMENT EXPENSES. THE AO FAILED TO MENTION EVEN A SINGLE WORD ABOUT THE JUSTIFICATION FOR ALLOWABILITY OF THE CLAIM. IT CLEARLY INDICATES THAT AO FRAMED THE ASSE SSMENT IN A CASUAL MANNER AND WITHOUT APPLICATION OF MIND. THERE IS NO LOSS TO THE ASSESSEE AS LD. CIT HAS SET ASIDE THE ISSUE FOR VERIFICATION TO AO WITH PROPER DIRECTIONS. THE ORDER OF LD. CIT IS RELIED ON. 2.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FIRST FINDING OF THE LD. C IT IS TO THE EFFECT THAT ASSESSMENT ORDER HAS BEEN PASSED IN A CASUAL MANNER AND WITHOUT APPLICATION OF MIND. IN OUR CONSIDERATION WITH THE ABOVE CORRESPONDENCE, EVIDENCE AND DISCUSSIONS DURING THE COURSE OF ASSES SMENT PROCEEDINGS DO ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 11 NOT SUBSTANTIATE THESE ADVERSE OBSERVATIONS OF LD. CIT. CONSEQUENTLY WE ARE UNABLE TO AGREE THAT ASSESSMENT ORDER IS ERRONE OUS OR PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS SCORE. 2.7 APROPOS THE ALLOWABILITY OF JDA DEVELOPMENT CHA RGES AS BUSINESS EXPENDITURE, LD. CIT HAS NO OBJECTION ON ASSESSEES FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING IN THAT EVENTUALITY EVEN THE A CCRUED LIABILITIES ARE TO BE ALLOWED. ASSESSEE HAS DEMONSTRATED THAT PER SQUA RE YARD WORKING OF JDA EXPENSES WAS PROVIDED TO LD. AO DURING THE ASSE SSMENT PROCEEDINGS WHICH IS PART OF THE RECORD. ONCE THE LIABILITY IS ACCRUED AS PER JDA CIRCULARS AND AO ALLOWS THE CLAIM BASED ON WORKING PROVIDED BY ASSESSEE; IT DEMONSTRATIVELY MEANS THAT AO ALLOWED THE CLAIM AFTER DUE APPLICATION OF MIND. LD. CIT HAS NOT EVEN DISPUTED THAT LIABILITY IS ALLOWABLE AS CLEARANCE HAS BEEN GIVE ABOUT LIABILIT Y QUA THE SALE PROCEEDS OFFERED. IT HAS BEEN LOST SIGHT OF THAT ASSESSEE FO LLOWS MERCANTILE METHOD, LIABILITY IS STATUTORY AND WORKING OF QUANTUM IS PR OVIDED. WITH ALL THIS AVAILABLE ON RECORD WE HOLD THAT THE ASSESSMENT ORD ER CAN NEITHER BE CALLED AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. OUR VIEWS ARE FORTIFIED BY THE CATENA OF JUDGMENTS CITED ABOVE, C ONSEQUENTLY THE 263 ORDER IS QUASHED AND ASSESSEES GROUNDS ARE ALLOWED . ITA NO. 291/JP/2014 M/S. THE GREEN TRIVENI DEVELOPER VS. CIT , JAIPUR 1 12 3.0. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/02/20 15. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24 TH FEB. 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S.THE GREEN TRIVENI DEVELOPERS, JA IPUR 2. IZR;FKHZ@ THE RESPONDENT- THE CIT-1, JAIPUR 3. VK;DJ VK;QDR@ CIT, 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 5. XKMZ QKBZY@ GUARD FILE (ITA NO.291/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR