Red Ice Productions Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 5831/DEL/2012

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6825 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 19-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 19-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Bad and doubtful debts
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 201; 143(2); 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F NEW DELHI BEFORE SH. S.K. YADAV , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 5831 /DEL/ 2012 ASSESSMENT YEAR: 2009 - 10 RED ICE PRODUCTIONS PVT. LTD., D - 46, NARAINA VIHAR, DELHI VS. INCOME TAX OFFICER, WARD - 15(2), NEW DELHI PAN : AADCR8533M (APPELLANT) (RESPONDENT) APPELLANT BY SH. SANJAY GUPTA, CA RESPONDENT BY SH. F.R. MEENA, SR.DR DATE OF HEARING 19.01.2017 DATE OF PRONOUNCEMENT 14.02.2017 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 09/08/2012 OF LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) - XVIII, NEW DELHI , FOR ASSESSMENT YEAR 2009 - 10 , RAISING FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN UPHOLDING THE CORRECTNESS OF METHOD OF VALUATION OF WORK IN PROGRESS AS ADOPTED BY THE ASSESSING OFFICER IN WHICH ALL INDIRECT EXPENSES HAVE ALSO BEEN PROPORTIONATELY ALLOCATED TOWARDS THE WORK PROGRESS. 2. ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN UPHOLDING THE PROPORTIONATE DISALLOWANCE OUT OF INDIRECT EXPENSES BY APPORTIONING THE SAME TOWARDS THE WORK IN PROGRESS. 2 ITA NO. 5831/DEL/2012 AY: 2009 - 10 2. T HE FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF PRODUCTION OF TELEVISION COMMERCIALS (TVC) KNOWN AS ADVERTISEMENT FILMS (AD FILMS). FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME ON 29/09/2009 , DECLARING INC OME OF RS.16,22, 740/ - . THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE INCOME - TAX ACT (FOR SHORT THE ACT ) WAS ISSUED AND COMPLIED WITH. THE ASSESSING OFFICER OBSERVED THAT EXPENSES INCURRED IN RELATION TO FOLLOWING PROJECTS WERE TREATED BY THE ASSESSEE AS WORK IN PROGRESS: CLINIC PLUS RS.25,25, 472/ - DELL RS.94,25, 377.10/ - SRI LANKA TOURISM RS.48, 68 , 434/ - TOTAL RS.1,68,19, 283.10/ - 2.1 THE ASSESSEE INCURRED ADMINISTRATIVE EXPENSES OF RS.1,47, 5 2, 677.71/ - , OUT OF WHICH EXPENSES OF RS.8,63, 602/ - ON TRAVELLING AND EXPENSES OF RS.27,58, 011/ - ON PROFESSIONAL FEES WAS CONSIDERED BY THE ASSESSEE IS RELATABLE TO THE SPECIFIC PROJECT FOR WORK IN PROGRESS AND ACCORDINGLY ALLOCATED TO WORK IN PROGRESS . THE BALANCE EXPENSES OF RS.1 ,11,31, 064/ - WAS CLAIMED AS EXPENDITURE UNDER THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER ASKED THE ASSESSEE AS W HY THE INDIRECT EXPENSES OF RS.1,11,31, 064/ - MIGHT NOT BE PROPORTIONATELY APPORTIONED TOWARDS THE WORK IN PROGRESS. 2.2 THE ASSESSEE S UBMITTED THAT ALL EXPENSES RELATABLE TO SPECIFIC PROJECT INCLUDING INDIRECT EXPENSES HAVE BEEN INCLUDED IN THE WORK IN PROGRESS. THE ASSESSEE FURTHER SUBMITTED THAT THERE IS NO ACCOUNTING 3 ITA NO. 5831/DEL/2012 AY: 2009 - 10 PRINCIPLE WHICH PERMITS TO DETERMINE WORK IN PROGRESS INCLUDING INDI RECT EXPENSES WHICH ARE NOT DIRECTLY RELATABLE TO ANY PROJECT. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND DISALLOWED INDIRECT EXPENSES OF RS.1,11,31, 064/ - IN PROPORTION OF THE WORK IN PROG RESS (RS.1,68,19, 283 / - ) TO THE COMBINE D AMOUNT (RS.9,10,76,686/ - ) OF TURNOVER (RS.7,42, 87,4 03/ - ) AND WORK IN PROGRESS (RS.1,68,19, 283/ - ) . THE DISALLOWANCE OF RS. 20, 55, 593/ - IS COMPUTED AS UNDER: PROPORTIONATE EXPENSES = 1,11,31,064 *( 1 ,68,19,283/9,10,76, 686) = RS. 20, 55, 593/ - 2.3 B EFORE THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS), THE ASSESSEE SUBMITTED THAT IT HAS FOLLOWED THE DIRECT COST METHOD FOR VALUING THE PROJECT WHICH REMAINED UNDER WORK IN PROGRESS AT THE END OF THE YEAR AND ALL EXPENSES WHICH WERE INCURRED ON THOSE P ROJECTS WERE MOVED UNDER THE HEAD WORK IN PROGRESS AND SHOWN AS CURRENT ASSETS. THE ASSESSEE COMPANY CIT ED THE DECISION OF THE TRIBUNAL , DELHI BENCH IN THE CASE OF SUTLEJ C OTTEN MILLS LTD VS. A SS ISTANT COMMISSIONER I NCOME T AX IN ITA NO. 1378/DEL/1992 AND 9 88/DEL/1993. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AGREED WITH THE VIEW OF THE TRIBUNAL IN THE CASE CITED BY THE ASSESSEE, BUT AS FAR AS FACTS OF THE ASSESSEE ARE CONCERNED, HELD THAT EXPENSES UNDER THE HEAD ADMINISTRATIVE EXPENSES LIKE BANK CHA RGES, COMMUNICATION EXPENSES, COMPUTER EXPENSES ETC . WERE NOT FIXED IN NATURE AND DIRECTLY RELATABLE TO VARIOUS PROJECTS BEING HANDLED BY THE COMPANY. THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEA LS) FURTHER HELD THAT ONLY D IRECTORS REMUNERATION WAS NOT R ELATABLE TO ANY PROJECT. ACCORDINGLY , ALL EXPENSES OF RS. 1,11,31, 064/ - OTHER THAN THE D IRECTORS REMUNERATION, ALLOCATED BY THE ASSESSING OFFICER ON PROPORTIONATE BASIS TOWARDS WORK IN PROGRESS WAS UPHELD BY THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) . AGGRIEVED WITH THE FINDING OF THE LEARNED 4 ITA NO. 5831/DEL/2012 AY: 2009 - 10 COMMISSIONER OF INCOME - TAX (APPEALS), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS VALUED THE WORK IN PROGRESS AS PER THE DIRECT COST METHOD, WHICH IS ONE OF THE RECOGNIZED METHOD OF VALUATION OF CLOSING STOCK ACCORDING TO WHICH ONLY COSTS WHICH ARE DIRECTLY INCURRED ON RELEVANT PROJECTS SH OULD BE TAKEN FOR THE PURPOSE OF CALCULATION OF WORK IN PROGRESS. HE SUBMITTED THAT THE NATURE OF MOST OF THE ADMINISTRATIVE EXPENSES ARE RECURRING AND FIXED AND HAD NOT DIRECTLY RELATABLE TO ANY PR OJECT UNDERTAKEN BY THE COMPANY . HE FURTHER SUBMITTED THAT THERE ARE NO ACCOUNTING PRINCIPLES WHICH PRESCRIBED INCLUSION OF INDIRECT EXPENSES, WHICH ARE NOT DIRECTLY RELATABLE TO WORK IN PROGRESS/CLOSING STOCK TO BE TAK EN FOR THE PURPOSE OF VALUATION . HE FURTHER SUBMITTED THAT THE INCOME T AX ACT HAS NOT SPECIFIED ANY PARTICULAR METHOD OF VALUATION OF CLOSING STOCK AND THEREFORE THE METHOD ADOPTED BY THE ASSESSEE AND RECOGNIZED BY THE INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA (ICAI) SHOULD BE UPHELD. 4. ON THE OTHER HAND, THE LEARNED SR. DEPARTMENTAL REPRESENTAT IVE RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD INCLUDING THE ORDER OF THE LOWER AUTHORITIES. 6. THE ADMINISTRATIVE EXPENSES FOR THE YEAR UNDER CONSIDERATION WHICH HAVE BE EN APPORTIONED TOWARDS THE WORK IN PROGRESS ON PROPORTIONATE BASIS BY THE ASSESSING OFFICER, A DETAIL OF WHICH WAS SUBMITTED BEFORE US BY THE ASSESSEE, IS EXTRACTED AS UNDER: SCHEDULE OF ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED 31.03.2009 PARTICULARS AS ON 31.3.2009 STATUS MARKED BY THE ASSESSEE ADVERTISEMENT EXPENSES 12,515.00 BAD DEBTS 4,159.00 5 ITA NO. 5831/DEL/2012 AY: 2009 - 10 BANK CHARGES & INTEREST 23,593.14 BUSINESS PROMOTION 215,119.00 COMMUNICATION EXPNESES 107,530.00 COMPUTER EXPENSES 240,014.00 CANS EXPENSES 1,399,964.00 CAR HIRING CHARGES 240,000.00 CONVEYANCE 228,414.00 DIRECTORS REMUNERATION 4,000,000.00 ALLOWED BY CIT(A) DISCOUNT 20,000.00 DONATION 11,264.00 ELECTRICITY & WATER EXPENSES 36,850.00 CAR RUNNING & MAINT. EXPENSES 284,119.00 HOUSE KEEPING EXPENSES 92,979.00 INTERNET & CABLE EXPENSES 103,468.00 MEMEBERSHIP FEE & SUBSCRIPTION 71,056.00 MISCELLANEOUS EXPENSES 166,717.00 MISCELLANEOUS WAGES 20,575.00 NEWS PAPERS & PERIODICALS 2,706.00 OFFICE EXPENSES 318,183.00 PENALTY ON SERVICE TAX 2,000.00 103,256.50 POSTAGE & COURIER PRINTING & STATIONERY 409,990.00 PROFESSIONAL FEES 2,758,011.00, CONSIDERED AS RELATABLE TO SPECIFIC PROJECT FOR WIP BY THE ASSESSEE. HENCE DEDUCTED BY AO. RATES & TAXES 179,991.00 RENT 1,014,000.00 REPAIR & MAINTENANCE 145,693.00 SALARY & ALLOWANCES 1,290,358.00 SECURITY SERVICE CHARGES 242,209.00 63,387.00 30,955.07 STAFF WELFARE SHORT & EXCESS TENT HIRE CHARGES 50,000.00 863,602.00 TRAVELLING EXPENSES CONSIDERED AS RELATABLE TO SPECIFIC PROJECT FOR WIP BY THE ASSESSEE. HENCE DEDUCTED BY AO. TOTAL 14,752,677.71 6 ITA NO. 5831/DEL/2012 AY: 2009 - 10 7. BEFORE ADJUDICATING ON THE ISSUE IN DISPUTE, WE MAY LIKE TO REFER THE RELEVANT PROVISION OF THE ACT R EGAR DING THE VALUATION OF INVENTORY; SECTION 145A OF THE ACT IS EXTRACTED AS UNDER: METHOD OF ACCOUNTING IN CERTAIN CASES. 145A. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION 145 , ( A ) THE VALUATION OF PURCHASE AND SALE OF GOODS AND INVENTORY FOR THE PURPOSES OF DETERMINING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' SHALL BE ( I ) IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE; AND ( II ) FURTHER ADJUSTED TO INCLUDE THE AMOUNT OF ANY TAX, DUTY, CESS OR FEE (BY WHATEVER NAME CALLED) ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION AS ON THE DATE OF VALUATION. EXPLANATION. FOR THE PURPOSES OF THIS SECTION * , ANY TAX, DUTY, CESS OR FEE (BY WHATEVER NAME CALLED) UNDER ANY LAW FOR THE TIME BEING IN FORCE, SHALL INCLUDE ALL SUCH PAYMENT NOTWITHSTANDING ANY RIGHT ARISING AS A CONSEQUENCE TO SUCH PAYMENT; ( B ) INTEREST RECEIVED BY AN ASSESSEE ON COMPENSATION OR ON ENHANCED COMPENSATION, AS THE CASE MAY BE, SHALL BE DEEMED TO BE THE INCOME OF THE YEAR IN WHICH IT IS RECEIVED . ( EMPHASIS SUPPLIED ) 8. T HUS , WE FIND THAT AS PER THE PROVISIONS OF THE ACT, IN THIS CASE THE VALUATION OF WORK IN PROGR ESS AT THE END OF THE YEAR HAS TO BE VALUED BY THE ASSESSEE IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. 9. FURTHER, IN THE CASE OF SUTLEJ C OTTON MILLS LTD . VS. ACIT (SUPRA) THE TRIBUNAL AFTER GOING THROU GH THE CASES OF CIT V. BRITISH P AINTS (I) LTD (1991) 188 ITR 44 (SC) AND ITO VS. MODI R UBBER LTD . (1992) 43 ITD 396 (DELHI - TRIB.), IDENTIFIED THE COSTS RELATABLE TO THE FINISHED GOODS FOR 7 ITA NO. 5831/DEL/2012 AY: 2009 - 10 VALUATION AT YEAR END . THE RELEVANT PART OF THE DECISION IS REPRODUCED AS UNDER: 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE ALSO GONE THROUGH THE DECISION RENDERED IN THE CASE OF BRITISH PAINTS (I) LTD. (SUPRA) AS WELL THAT OF MODI RUBBER LTD. (SUPRA). IT IS NOT DISPUTED THAT THE ASSESSEE HAS BEEN FOLLOWING CONSISTENT METHOD OF VALUATION OF CLOSIN G STOCK OF FINISHED GOODS AT COST. THIS IS STATED TO BE THE DIRECT COST METHOD WHICH IS WELL - RECOGNISED AS PER PRINCIPLES OF ACCOUNTING. AS MENTIONED ABOVE, ON GOING THROUGH THE ORDER OF MODI RUBBER, WE FIND THAT THE LEARNED MEMBERS OF THE TRIBUNAL HAD REF ERRED TO THE COMPONENTS OF THE DIRECT COST TO BE AS UNDER : (A) DIRECT MATERIAL COST : (I) RAW MATERIAL CONSUMED; AND (II) STORES, SPARES AND OIL CONSUMED (B) DIRECT LABOUR COST : SALARY, WAGES, BONUS, EX GRATIA, ETC. TO STAFF AND WORKERS. (C) PRODUCTION OVERHEADS : (I) POWER AND FUEL CONSUMED; (II) REPAIRS AND MAINTENANCE TO PLANT AND MACHINERY; AND (III) REPAIRS AND MAINTENANCE TO FACTORY BUILDING. FOLLOWING ITEMS HAD NOT BEEN INCLUDED : (I) ADMINISTRATIVE OVERHEADS AND INTEREST; (II) SELLING AND DISTRIB UTION OVERHEADS; AND (III) DEPRECIATION. AS REGARDS DIRECT MATERIAL COST, THERE IS NO DISPUTE IN AS MUCH AS, AS PER THE CHART GIVEN TO US, WHICH IS NOT DISPUTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. THE ASSESSEE HAS ACCOUNTED FOR COST OF RAW MATERIAL CONSUMED, AND STORES AND SPARES CONSUMED. COMING TO THE DIRECT LABOUR COST, THE ASSESSEE HAS ONLY ACCOUNTED 8 ITA NO. 5831/DEL/2012 AY: 2009 - 10 FOR THE WAGES AND SALARIES OF TECHNICAL STAFF AND NOT TAKING INTO CONSIDERATION THE CONTRIBUTION TO PROVIDENT FUND, EMPLOYEES WELFARE EXPENSES, BON US AND OTHER BENEFITS RELATING TO WORKERS AND STAFF WHOSE WAGES AND SALARIES HAVE BEEN TAKEN INTO CONSIDERATION. AS THESE GO ALONG WITH THE WAGES AND SALARIES ACCOUNTED FOR, ACCORDING TO US, THESE HAVE TO BE INCLUDED WHILE CONSIDERING THE DIRECT COST METHO D. (SIC) AS REGARDS PRODUCTION OVER HEAD, WE FIND THAT THE ASSESSEE HAS ACCOUNTED FOR POWER AND FUEL CONSUMPTION BUT NOT REPAIRS AND MAINTENANCE TO MACHINERY AND FACTORY BUILDING. IN THIS CONTEXT, WE NOTE THAT IN THE CASE OF MODI RUBBER LTD. (SUPRA), THE A FORESAID CONCERN HAD ACCOUNTED FOR THE EXPENSES RELATING TO REPAIR AND MAINTENANCE TO MACHINERY AS WELL FACTORY BUILDING. AS THIS EXPENDITURE IS DIRECTLY RELATABLE TO THE PRODUCTION OF GOODS, THE SAME HAS TO BE ACCOUNTED FOR AND WE WOULD HOLD THAT THE INCL USION OF THE AMOUNT IN THIS RESPECT HAS BEEN RIGHTLY DONE. AS REGARDS INSURANCE, THE ASSESSEE HAS EXPLAINED THAT THIS RELATES TO THE COMPREHENSIVE INSURANCE WHICH IS NOT RELATABLE TO GOODS ALONE. IN THIS RESPECT WE WOULD HOLD THAT PART OF THE EXPENSES WHIC H ARE RELATABLE TO THE GOODS ARE ALSO TO BE TAKEN INTO CONSIDERATION WHILE ARRIVING AT THE DIRECT COST. THIS WOULD HOWEVER NOT BE SO IN REGARD TO DEPRECIATION. FOR THIS, WE FIND SUPPORT IN THE ORDER OF THE TRIBUNAL IN THE CASE OF MODI RUBBER (SUPRA) WHERE IT HAS BEEN HELD THAT WHILE ASKING FOR DIRECT COST METHOD, THE FIXED COST ARE TO BE EXCLUDED IN DETERMINING THE COST. IT IS FURTHER HELD THAT FIXED COST IS DEFINED AS THE ONES WHICH BY ITS VERY NATURE REMAIN RELATIVELY UNAFFECTED IN A DEFINITE PERIOD OF TI ME BY VARIATION IN THE VOLUME OF PRODUCTION. AFTER OBSERVING SO, IT HAS BEEN HELD THAT THE DEPRECIATION IS NOT TO BE TAKEN INTO CONSIDERATION. THIS WOULD APPLY TO THE RENT WHICH DOES NOT VARY WITH VALUATION IN PRODUCTION. RESPECTFULLY FOLLOWING THE AFORESA ID DECISION, WE WOULD HOLD THAT THE SAME IS TO BE EXCLUDED WHILE WORKING OUT THE COST OF THE FINISHED GOODS. THE AO IS DIRECTED TO MODIFY THE WORKING OF THE VALUATION OF CLOSING STOCK OF FINISHED GOODS IN THE LIGHT OF THE OBSERVATIONS AS CONTAINED ABOVE. 10. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS IN PRINCIPLE AGREED WITH THE RATIO OF THE ABOVE DECISION, HOWEVE R, ACCORDING TO HIM EXCEPT THE D IRECTOR S REMUNERATION , THE EXPENSES IN DISPU TE WERE NOT FIXED IN NATURE AND DIRECTLY RELATABLE TO VA RIOUS PROJECTS BEING HANDLED BY THE ASSESSEE COMPANY. THE LEARNED COUNSEL OF THE ASSESSEE 9 ITA NO. 5831/DEL/2012 AY: 2009 - 10 HAS CHALLENGED THE LATER PART OF THE ABOVE FINDING OF THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS). 11. SINCE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ALREADY ACCEPTED THE DIRECT COST METHOD O F VALUATION OF WORK IN PROGRESS, THE FIRST ISSUE BEFORE US FOR CONSIDERATION IS WHETHER EXPENSES IN QUESTION ARE DIRECTLY RELATABL E TO THE PROJECTS . THE NEXT ISSUE IS WHETHER, THE COMPUTATION OF SUCH EXPENSES DI RECTLY RELATABLE TO PROJECTS UPHELD BY THE LEARNED CIT(A) THROUGH PROPORTIONATE ALLOCATION , IS CORRECT. 12. IN OUR OPINION , THE EXPENSES OUT OF THE ADMINISTRATIVE EXPENSES OF RS.1, 11 ,31, 064/ - WHICH ARE RELATED DIRECTLY TO THE WORK IN PROGRESS IN RESPECT O F THREE PROJECTS, CANNOT BE DECIDED BY APPORTIONING THE EXPENSES IN THE RATIO OF WORK IN PROGRESS TO TOTAL TURNOVER INCLUDING WORK IN PROGRESS. THE ASSESSING OFFICER IS REQUIRED TO EXAMINE THE EXPENSES CASE TO CASE BASIS , IN THE LIGHT OF THE DECISION OF TH E TRIBUNAL IN THE CASE OF SUTLEJ C OTTON MILLS LTD .( SUPRA) TO ASCERTAIN WHETHER SAME ARE RELATED DIRECTLY TO THE THREE PROJECTS IN REFERENCE. THE EXPENSES ON D IRECTOR S REMUNERATION HAVE ALREADY BEEN HELD BY THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) AS NOT RELATABLE TO ANY OF THE PROJECT S AND ALREADY EXCLUDED FOR THE PURPOSE O F VALUAT ION OF WORK IN PROGRESS AND TH A T FINDING HAS NOT BEEN CHALLENGED BY THE REVENUE BEFORE US. 13. IN VIEW OF ABOVE, WE REJECT THE ALLOCATION OF THE ADMINISTRATIVE EXPENSES ON PROPORTIONATE BASIS TOWARDS WORK IN PROGRESS AND RESTORE THE MATTER TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE ALL EXPENSES UNDER ADMINISTRATIVE EXPENSES , OTHE R THAN D IRECTOR S REMUNERATION ON CASE TO CASE BASIS , TO FIND OUT WHETHER SAME ARE DIRECTLY RELATED TO ANY OF THE THREE PROJECTS IN REFERENCE AND THEN INCLUDES THE SPECIFIC EXPENSES WHICH ARE DIRECTLY RELATED TO THE PROJECT S TO THE WORK IN PROGRESS. NEVERT HELESS TO MENTION THAT THE ASSESSEE SHALL BE AFFORDED SUFFICIENT OPPORTUNITY OF HEARING. 10 ITA NO. 5831/DEL/2012 AY: 2009 - 10 14. WITH THE ABOVE DIRECTION S , THE GROUNDS OF THE APPEAL ARE ALLOWED FOR STATISTICAL PURPOSE. THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 1 4 T H F EBRUARY , 201 7 . S D / - S D / - ( S.K. YADAV ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 4 T H FEBRUARY , 201 7 . RK / - (D.T.D) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI