Jagran Agents Pvt. Limited, New Delhi v. ACIT, New Delhi

ITA 3138/DEL/2010 | 2006-2007
Pronouncement Date: 17-02-2012 | Result: Dismissed

Appeal Details

RSA Number 313820114 RSA 2010
Assessee PAN AABCJ6371M
Bench Delhi
Appeal Number ITA 3138/DEL/2010
Duration Of Justice 1 year(s) 7 month(s) 23 day(s)
Appellant Jagran Agents Pvt. Limited, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 17-02-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 17-02-2012
Date Of Final Hearing 06-01-2011
Next Hearing Date 06-01-2011
Assessment Year 2006-2007
Appeal Filed On 24-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA ITA NO. 3138/DEL/2010 ASSTT. YR: 2006-07 JAGRAN AGENTS PVT. LTD. VS. ACIT CIR. 4(1) FLAT NO. 1104 11 TH FLOOR NEW DELHI. HEMKUNT CHAMBER 89 TH NEHRU PLACE NEW DELHI. PAN/GIR NO. AABCJ6371M (APPELLANT) ( RESPONDENT ) APPELLANT BY : SHRI GOPAL NATHANI CA RESPONDENT BY : MS. A. KHURANA DR O R D E R PER R.P. TOLANI J.M : THIS IS ASSESSEES APPEAL AGAINST CIT(A)S ORDER D ATED 2006-07 RELATING TO A.Y. 2006-07. 2. VARIOUS GROUNDS ARE RAISED WHICH IN FACT CHALL ENGE THE CIT(A)S ORDER IN NOT ALLOWING THE CLAIM OF THE ASSESSEE ABO UT FOLLOWING EXPENSES BEING REVENUE IN NATURE AND HOLDING THAT THEY ARE T O BE CAPITALIZED IN WORK AND PROGRESS A/C OF THE ASSESSEE WHO IS A REAL EST ATE DEVELOPER. (I) INTEREST EXPENDITURE ATTRIBUTABLE TO PURCHASE OF LA ND AMOUNTING TO RS. 46 76 035/- ITA NO. 3138/DEL/10 JAGRAN AGENTS PVT. LTD.. 2 (II) EXPENDITURE ON RENT & RATES LEGAL & PROFESSIONAL E XPENSES AUDIT FEES PRINTING & STATIONERY FILING FEES & BANK CHA RGES TOTALING AT RS. 2 09 177/-. (III) PRELIMINARY EXPENSES WRITE OFF OF RS. 23 105/-. 3. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE ASSESSEE IS A REAL ESTATE DEVELOPER AND IS FOLLOWING PROJECT COMPLETIO N METHOD OF ACCOUNTING. ABOVE EXPENDITURES WERE DEBITED TO P&L A/C BY THE A SSESSEE. AO HELD THAT THE SAME ARE TO BE CAPITALIZED IN VIEW OF THE ASSES SEES METHOD OF ACCOUNTING BEING PROJECT COMPLETION METHOD. ON FIRST APPEAL T HE ORDER OF AO WAS CONFIRMED. IT IS PLEADED THAT THE SAME MAY BE ALLOW ED AS REVENUE EXPENDITURE. 4. LEARNED DR ON THE OTHER HAND CONTENDS THAT IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS FOLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING AND THE EXPENDITURES INCURRED BY THE ASSESSEE BEFO RE THE COMPLETION OF THE PROJECT ARE TO BE CAPITALIZED BY THE METHOD OF ACCO UNTING EMPLOYED BY THE ASSESSEE. BESIDES IN ALL SUBSEQUENT YEARS ASSESSE E ITSELF HAS CAPITALIZED THESE EXPENSES. ORDERS OF LOWER AUTHORITIES ARE REL IED ON. 5. WE HAVE HEARD RIVAL CONTENTIONS PERUSED THE MAT ERIAL AVAILABLE ON RECORD. IT HAS NOT BEEN DISPUTED THAT THE ASSESSEE WHO IS A REAL ESTATE DEVELOPER FOLLOWS PROJECT COMPLETION METHOD OF ACC OUNTING FOR DETERMINATION OF ITS PROFITS. AS PER THIS METHOD OF ACCOUNTING THE EXPENDITURES IN QUESTION ARE TO BE CAPITALIZED WHIC H IN SUBSEQUENT YEARS ITA NO. 3138/DEL/10 JAGRAN AGENTS PVT. LTD.. 3 HAVE BEEN CAPITALIZED BY THE ASSESSEE HIMSELF. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE SEE NO INFIRMITY IN THE ORDER OF THE CIT(A) WHICH IS UPHELD. 6. IN THE RESULT ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 17-02-2012. SD/- SD/- ( B.C. MEENA ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17-02-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR