AWAS DEVELOPERS & CONSTRUCTION PVT. LTD., MUMBAI V. DCIT CENT. CIR. 5(4), MUMBAI

ITA 4537/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8547 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 19-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Section: 28; 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH , JM & SHRI M.BALAGANESH, AM ITA NO. 4537 /MUM/201 8 ( ASSESSMENT YEAR : 2015 - 16 ) M/S. AWAS DEVELOPERS & CONSTRUCTION PVT. LTD. THAR & CO., 203, CAPRI BUILDING OPPOSITE HDIL TOWERS ANANT KANEKAR MARG BANDRA (E), MUMBAI 400 021 VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 5(4), MUMBAI PAN/GIR NO. AADCA0702D (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY NONE REVENUE BY SHRI MICHAEL JERALD DATE OF HEARING 06 / 01 /2020 DATE OF PRONOUNCEMENT 15 / 01 /2020 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 4537/MUM/2018 FOR A.Y. 2015 - 16 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 53, MUMBAI IN APPEAL NO. CIT( A) - 53/IT - 418/DCC - 5(4)/2017 - 18 DATED 16/05/2018 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 07/12/2017 BY THE LD. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 5(4), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO .4537/MUM/2018 M/S. AWAS DEVELOPERS & CONSTRUCTION P. LTD. 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT (A) HAS ERRED IN LAW & ON FACTS IN UPHOLDING THE LEARNED AO'S ACTION OF DISALLOWING INTEREST EXPENSES TO THE TUNE OF RS.8, 86,16,625/ - U/S 43B OF THE IT ACT, 1961 & REDUCING THE SAME FROM WORK IN PROGRESS AS ON 31/03/2015 , WHICH IS BAD IN LAW. 2. THE APPELLANT CRAVES LEAVE TO ADD TO AND/ OR AMEND AND/ OR DELETE AND/ OR MODIFY AND/ OR ALTER THE AFORESAID GROUNDS OF APPEAL A S AND WHEN THE OCCASION DEMANDS. 3. ALL THE AFORESAID GROUNDS OF APPEAL ARE INDEPENDENT, IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO ONE ANOTHER. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS A REAL ESTATE DEVELOPER AND HAD FILED ITS RETURN FOR THE A.Y.2015 - 16 ON 29/09/2015 DECLARING TOTAL LOSS OF RS.93,240/ - . THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT ASSESSEE HAS NOT PAID THE OUTST ANDING INTEREST PAYMENT OF RS.8,86,16,625/ - TO PUNJAB AND MAHARASHTRA CO - OPERATIVE BANK ON OR BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. ACCORDINGLY, THE INTEREST EXPENSES OF RS.8,86,16,625/ - DEBITED TO PROFIT AND LOSS ACCOUNT AND ITS CAPITALISATI ON TO WORK IN PROGRESS(WI P ) WAS DISALLOWED BY THE LD. AO U/S.43B OF THE ACT IN THE ASSESSMENT. WE FIND THAT THE ASSESSEE BEFORE THE LD. CIT(A) HAD CONTENDED THAT PROVISIONS OF SECTION 43B OF THE ACT WOULD APPLY ONLY IF INTEREST WAS CLAIMED AS DEDUCTION WHI LE COMPUTING THE INCOME REFERRED TO SECTION 28 OF THE ACT. IT WAS FURTHER CONTENDED BEFORE THE LD. CIT(A) THAT NO EXPENDITURE WAS CLAIMED IN THE PROFIT AND LOSS ACCOUNT BUT RATHER THE SAME WAS CAPITALISED TO WORK IN PROGRESS AS ON 31/03/2015. ACCORDINGLY, IT WAS ARGUED THAT PROVISIONS OF SECTION 43B OF THE ACT WOULD NOT COME INTO OPERATION AT ALL. WE FIND THAT THE LD. CIT(A) IGNORING THE AFORESAID CONTENTIONS OF THE ASSESSEE HAD OBSERVED IN PART 4.3 OF THE ORDER THAT ASSESSEE HAD DEBITED THE S U M OF RS.8,86, 16,625/ - IN ITS PROFIT AND LOSS ITA NO .4537/MUM/2018 M/S. AWAS DEVELOPERS & CONSTRUCTION P. LTD. 3 ACCOUNT TOWARDS FINANCE COST AND HAD ALSO OBSERVED THAT THE SAID INTEREST EXPENDITURE HAD BEEN CAPITALISED AND DEBITED TO WORK IN PROGRESS. WE FIND THIS MATTER REQUIRES FACTUAL VERIFICATION BY THE LD. AO AS THERE ARE CONTRAD ICTORY FINDINGS ON FACTS. HENCE, WE DEEM IT FIT AND APPROPRIATE TO REMAND THIS ISSUE TO THE FILE OF THE LD. AO FOR DE NOVO ADJUDICATION IN ACCORDANCE WITH LAW. ASSESSEE IS AT LIBERTY TO FURNISH FURTHER EVIDENCES IN SUPPORT OF ITS CONTENTIONS. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 / 01 /2020 SD/ - ( MAHAVIR SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 15 / 01 / 2020 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//