M/S. SATYAM REALTORS P. LTD., MUMBAI V. DY CIT, CC-5(4), MUMBAI

ITA 345/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4265 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 21-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 43B

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL “B” Bench, Mumbai Shri B.R. Baskaran (AM) & Shri Pavan Kumar Gadale (JM) I.T.A. No. 345/Mum/2021 (A.Y. 2016-17) M/s. Satyam Realtors Pvt. Ltd. Room No. 4, 3 rd Floor Capri, Anant Kanekar Marg Bandra East, Mumbai-400 051. PAN : AADCA0702D Vs. DCIT, CC-5(4) Room No. 1927 19 th Floor, Air India Building Nariman Point Mumbai-400 021. (Appellant) (Respondent) Assessee by None Department by Dr. Mahesh Akhade Date of Hearing 22.09.2022 Date of Pronouncement 22.09.2022 O R D E R Per B.R.Baskaran (AM) :- The assessee has filed this appeals challenging the order dated 2.8.2019 passed by the learned CIT(A)-53, Mumbai and it relates to A.Y. 2016-17. 2. None appeared on behalf of the assessee. The counsel of the assessee has submitted a letter seeking adjournment stating therein that the promoter directors of the assessee-company are under judicial custody. Hence, we proceed to dispose of the appeal ex-parte, without presence of the assessee. 3. We have heard learned DR and perused the record. The assessee is engaged in the business of real estate development. 4. First issue relates to disallowance of Rs. 12.39 crores made under section 43B of the Act. The Assessing Officer noticed that the interest amount of Rs. 12.39 crores payable banks is outstanding as at the year end and it was not paid before the due date of filing the return of income. Hence, M/s. Satyam Realtors Pvt. Ltd. 2 the Assessing Officer disallowed the said amount under section 43B of the Act. The learned CIT(A) also confirmed the same. 5. We noticed that the assessee has taken loan from “M/s. Punjab & Maharashtra Cooperative Bank”. The above said interest, which was disallowed u/s 43B of the Act, was payable to the above said bank. We further noticed that the interest payable to the cooperative bank was brought within the ambit of section 43B of the ACt only w.e.f. 1.4.2018 by the Finance Act, 2017, meaning thereby, interest payable to the Cooperative Bank is required to be disallowed under section 43B of the Act only from A.Y. 2018-19. The year under consideration is A.Y. 2016-17 and hence the provisions of section 43B will not apply to the year under consideration to the interest payable to a cooperative bank. Accordingly, the above said disallowance made by the tax authorities is not in accordance with the law. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to delete this addition. 6. Next issue contested by the assessee relates to disallowance of expenses to the tune of Rs. 2.09 crores, which was reduced from “work in progress” as on 31.3.2016. The Assessing Officer noticed that the assessee has claimed a sum of Rs. 8.38 crores as land expenses. The Assessing Officer asked the assessee to furnish details relating to the same. Since the assessee did not furnish the details, the Assessing Officer disallowed 25% of the above said amount and reduced the same from work in progress. The learned CIT(A) also confirmed the same. 7. We have heard learned DR and perused the record. We noticed that assessee has not furnished the details relating to the claim of land expenses and hence, the AO has disallowed 25% of the claim. We noticed that the assessee did not furnish any details before the learned CIT(A) also and hence the learned CIT(A) has also confirmed the disallowance. M/s. Satyam Realtors Pvt. Ltd. 3 8. Before us also no details was furnished. Hence we have no other option but to confirm the disallowance. 9. In the result, appeal filed by the assessee is partly allowed. Order pronounced in the open court on 22.09.2022. Sd/- Sd/- (PAVAN KUMAR GADALE) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated : 22/09/2022 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai