TECHNA INFRASTRUCTURE PVT. LTD.,KOLKATA V. A.C.I.T., CIRCLE - 1(1), KOLKATA, KOLKATA

ITA 1296/KOL/2024

AI Insights

The case involves Techna Infrastructure Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-12, Mumbai, concerning the assessment year 2013-14. The primary issue was the addition of Rs.36,80,375/- to the assessee's income, representing project marketing expenses for commercial properties that did not generate revenue in the year of assessment. The Assessing Officer had disallowed these expenses because the related project was incomplete and no revenue was generated during the year. The Tribunal's decision to allow the appeal was based on the practical difficulties of adjusting these expenses in future assessments, which could span multiple years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469656 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member I.T.A. No.1296/Kol/2024 Assessment Year: 2013-14 Techna Infrastructure Pvt. Ltd..…………...………......................……….……Appellant 2nd Floor, Bldg Delta, Bengal Intelligent Park, Salt Lake, Electronics Complex, Block EP & GP, Sector-V, Kolkata-700091. [PAN: AABCT4095J] vs. ACIT, Circle-1(1), Kolkata..............…..….…..….........……........……...…..…..Respondent Appearances by: Shri A. K. Tibrewal, FCA, appeared on behalf of the appellant. Shri Abhijit Adhikari, JCIT appeared on behalf of the Respondent. Date of concluding the hearing : March 10, 2025 Date of pronouncing the order : March 11, 2025 ORDER Per Rajesh Kumar, Accountant Member: The present appeal filed by the assessee for the assessment year 2013-14 against the order dated 19.04.2024 of the Commissioner of Income Tax (Appeals)-12, Mumbai [hereinafter referred to as ‘CIT(A)’] u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The only issue raised by the assessee is against the confirmation of addition of Rs.36,80,375/- by the ld. CIT(A) as made by the Assessing Officer on account project marketing expenses incurred in connection with commercial properties. 3. The relevant brief facts of the case are that the assessee filed its return of income on 29.09.2024 declaring nil income. The case of the assessee was selected for scrutiny and statutory notices were duly issued and served upon the assessee. The assessee is engaged in the business of real estate development and sale of commercial properties. During the I.T.A. No.1296/Kol/2024 Assessment Year: 2013-14 Techna Infrastructure Pvt. Ltd 2 year, there was no sale of commercial property and the expenses incurred by the assessee on marketing were debited to the Profit & Loss A/c and accordingly, the loss was carried forward to the subsequent year. The Assessing Officer in the assessment proceedings held that since the project for which the expenses were incurred was not completed during the year and no revenue was generated, therefore, the project marking expenses were not allowable and accordingly the same were added to the total income of the assessee in an assessment framed u/s 143(3) dated 02.03.2016 assessing the net loss of revenue at Rs.2,95,808/- against the total loss claimed by the assessee of Rs.39,76,183/-. 4. In appeal, the ld. CIT(A) confirmed the order of the Assessing Officer by upholding the addition. 5. After hearing the rival contentions and perusing the materials available on record, we find that the assessee is engaged in the construction of commercial properties and during the year, there was no sale of property. We, therefore, note that the assessee has claimed marketing expenses of Rs.36,80,375/- in connection with the sale of property which was claimed in Profit & Loss A/c as revenue expenses without capitalising the same in the Work-in-Progress A/c. In our opinion, the addition made by the Assessing Officer is tax-neutral because if the expenses claimed during the year is allowed then the loss carried forward to the subsequent year would be set off against the revenue generated from the sale of commercial properties and if not allowed during the year, then the cost of work-in-progress has to be adjusted upwardly and accordingly, the income of the assessee would be computed. Therefore, if we sustain the addition in the current year, it has to be allowed in the subsequent years when the project was sold but considering the practical difficulty in making adjustment in the various I.T.A. No.1296/Kol/2024 Assessment Year: 2013-14 Techna Infrastructure Pvt. Ltd 3 assessment years by the revenue, we deem it fit to allow the appeal of the assessee by setting aside the order of the ld. CIT(A) and deleting the addition. However, it may be noted that this precedent is not to be followed by the assessee in the subsequent years as this appeal has been allowed on the ground of avoiding unnecessary corrections/adjustments to income in the subsequent years which may span more than one assessment years. 6. In the result, the appeal of the assessee is allowed. Kolkata, the 11th March, 2025. Sd/- Sd/- [Pradip Kumar Choubey] [Rajesh Kumar] Judicial Member Accountant Member Dated: 11.03.2025. RS Copy of the order forwarded to: 1. Techna Infrastructure Pvt. Ltd 2. ACIT, Circle-1(1), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches "