M/S KRYSHNAJAY DEVELOPERS PVT LTD., MUMBAI V. ITO 12 (3), MUMBAI

ITA 7232/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4128 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 25-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

ITA NO. 7232/MUM/2019 ASSESSMENT YEAR: 2015 - 16 PAGE 1 OF 2 INCOME TAX APPELLATE TRIBUNAL MUMBAI SMC BENCH, MUMBAI [CORAM: PRAMOD KUMAR (VICE PRESIDENT)] ITA NO. 7232/MUM/2019 ASSESSMENT YEAR: 2015 - 16 M/S. KRYSHNAJAY DEVELOPERS PVT. LTD. ..... APPELLANT 501 KRYSTAL, 206, WATERFILED ROAD,R. K. PATKAR MARG, BANDRA (W), MUMBAI 400050 [PAN: AADCK9290J] VS. INCOME TAX OFFICER - 12(3)(1) MUMBAI. .....RESPONDENT APPEARANCES: VEERKUMAR SHAH FOR THE APPELLANT VIJAYKUMAR MENON FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : MAY 10, 2021 DATE OF PRONOUNCEMENT : AUGUST 04 , 2021 O R D E R PER PRAMOD KUMAR, VP: 1. BY WAY OF THIS APPEAL, THE ASSESSEE - APPELLANT HAS CHALLENGED THE CORRECTNESS OF THE ORDER DATED 30 TH SEPTEMBER 2019, PASSED BY THE LEARNED CIT(A) IN THE MATTER OF ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2015 - 16. 2. GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN RETAINING THE DISALLOWANCE OF A SUM OF RS.10,30,000/ - MADE BY THE INCOME TAX OFFICER BEING STAMP DUTY OF RS.10,00,000/ - AND REGISTRATION CHARGES OF RS.30,000/ - TOWARDS REGISTERATION FACILITY OBTAINE D BY YOUR APPELLANT FROM ICICI BANK LTD AND THE AMOUNT WAS DEBITED TO YOUR APPELLANT'S BANK ACCOUNT AND HENCE THE EXPENDITURE WAS INCURRED WHOLLY, NECESSARILY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS OF YOUR APPELLANT AND WAS THEREFORE ALLOWABLE AS DED UCTION AS EXPENDITURE CLAIMED BY YOUR APPELLANT. THE APPELLANT HAD TREATED THE SAID AMOUNT AS COST OF EXECUTION OF PROJECT AND HAD INCLUDED THE SAME IN ARRIVING AT THE CLOSING VALUE OF WORK IN PROGRESS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN REDUCING THE AFORESAID AMOUNTS OF RS.10,30,000/ - FROM THE CLOSING ITA NO. 7232/MUM/2019 ASSESSMENT YEAR: 2015 - 16 PAGE 2 OF 2 VALUE OF WORK IN PROGRESS WHICH HAS BEEN DONE IMPROPERLY AS THESE EXPENSES WERE ALLOWABLE AS DEDUCTI ON AND REQUISTE EVIDENCES WERE ALSO SUBMITTED BEFORE LEARNED CIT(A) THROUGH EMAIL BY THE DATE THEY WERE CALLED FOR ,HE ERRED IN NOT CONSIDERING THE SAME AND FURTHER STATING THAT NO EVIDENCE WAS PRODUCED. . 3. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERI AL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE BEFORE ME IS A BUILDER. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THAT ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS, INTER ALIA , CLAIMED CAPITALIZATION OF WORK IN PROGRESS IN RESPECT OF REGISTRA TION IN CHARGES OF RS. 10,30,000/ - IN CONNECTION WITH ICICI BANK LOAN. THE ASSESSING OFFICER DISALLOWED THE SAME. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FU RTHER APPEAL BEFORE ME. 4. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING, PERUSED THE MATERIAL ON RECORD - PARTICULARLY REGISTERED MORTGAGE DEED DATED 04.02.2015 IN FAVOUR OF ICICI BANK (AT PAG E 5 OF THE PAPER BOOK) AND CHALLAN #MBSTD3021550397 FOR RS. 10 ,30,000/ - (AT PAGE 7 OF THE PAPER BOOK), I AM SATISFIED THAT THE AMOUNT OF RS. 10,30,000/ - WAS SPENT ON REGISTERED MORTGAGE DEED IN FAVOUR OF ICICI BANK WHICH WAS REQUIRED FOR OBTAINING BANK LOAN. AS SUCH, IN MY CONSIDERED VIEW WHEN ALL OTHER RELATED EXPEN SES WERE CAPITALIZED, THE ASSESSEE HAD CORRECTLY CLAIMED CAPITALIZATION OF THESE EXPENSES. I, THEREFORE, UPHOLD THE PLEA OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO TAKE INTO ACCOUNT THE ABOVE RS. 10.30,000/ - FOR CAPITALIZATION OF WORK IN PROGRESS AT YEAR END. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 5 . IN THE RESULT, THIS APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 04 TH DAY OF AUGUST 2021. SD/ - PRAMOD KUMAR (VICE PRESIDENT) MUMBAI, DATED THE 04 TH DAY OF AUGUST 2021. COPIES TO: (1) THE APPLICANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR/SR.PS INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI