ITO,Wd.-1(3),, Jalna v. M/s. Rajureshwar & Assicuates,, Jalna

ITA 703/PUN/2011 | 2002-2003
Pronouncement Date: 29-07-2013 | Result: Dismissed

Appeal Details

RSA Number 70324514 RSA 2011
Assessee PAN AAKFR9861Q
Bench Pune
Appeal Number ITA 703/PUN/2011
Duration Of Justice 2 year(s) 2 month(s) 9 day(s)
Appellant ITO,Wd.-1(3),, Jalna
Respondent M/s. Rajureshwar & Assicuates,, Jalna
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-07-2013
Date Of Final Hearing 23-07-2013
Next Hearing Date 23-07-2013
Assessment Year 2002-2003
Appeal Filed On 20-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K.PANDA ACCOUNTANT MEMBER ITA NO. 703 TO 705/PN/2011 AND 1118/PN/2011 (ASSESSMENT YEARS: 2002-03 2003-04 2005-06 & 200 1-02) I.T.O. WARD 1(3) JALNA APPELLANT VS. M/S. RAJURESHWAR AND ASSOCIATES 1/4245 NAIGALLI KADRABAD JALNA PAN AAKFR 9861 Q RESPONDENT APPELLANT BY: SHRI RAJIV HARIT RESPONDENT BY: SMT. DEEP A KHARE DATE OF HEARING : 23.07.2013 DATE OF PRONOUNCEMENT : 29.07.2013 ORDER PER SHAILENDRA KUMAR YADAV JM THESE FOUR APPEALS BY THE REVENUE PERTAINING TO TH E SAME ASSESSEE RAISE SIMILAR ISSUES AND ARISING OUT OF CO NSOLIDATED ORDER OF THE CIT(A) AURANGABAD DATED 28-2-2011 FOR A.Y. 2 002-03 2003- 04 AND 2005-06 AND DATED 30-6-2011 FOR A.Y. 2001-02 WERE HEARD TOGETHER AND THE SAME ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE REVENUE HAS RAISED THE FOLLOWING COMMON GROU NDS OF APPEAL. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS CORRECT IN UPHOLDING THAT INTER EST @ 11% P.A. RECEIVED BY THE ASSESSEE FROM GOVERNMENT OF MA HARASHTRA AS PER DIRECTION OF HONBLE SUPREME COURT IS IN TH E NATURE OF BUSINESS RECEIPTS; 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) WAS CORRECT IN UPHOLDING THAT INTER EST @ 11% P.A. RECEIVED BY THE ASSESSEE FROM GOVERNMENT OF MA HARASHTRA IS ASSESSABLE TO TAX IN THE YEAR OF RECEIPT. IN ADDITION TO ABOVE THE REVENUE HAS ALSO RAISED T HE FOLLOWING GROUND OF APPEAL IN ITS APPEAL FOR A.Y. 2005-06: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE CIT(A) WAS CORRECT IN UPHOLDING THAT PREOPERATIVE E XPENSES AND COMPENSATION AT RS. 62 22 513/- AND RS. 1 92 44 540/- RESPECTIVELY IS ALLOWABLE EXPENSES U/S 37(1) OF TH E ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM CONSISTING OF EIGHT PARTNERS ENGAG ED IN THE BUSINESS OF DEVELOPERS AND BUILDERS. THE PARTNERSH IP FIRM WAS FORMED ON 20-11-2000. THE ASSESSEE ENTERED INTO AN AGREEMENT WITH AURANGABAD ZILLA UTPADAK SAHAKARI SOOT GIRNEE MARYADIT GARKHEDA AURANGABAD FOR PURCHASE OF LAND AND ACCOR DINGLY THE ASSESSEE MADE PAYMENT OF RS. 7 81 00 000/- TOWARDS PROPOSED PURCHASE OF LAND. THE PROPOSED TRANSACTION OF LAND PURCHASE COULD NOT BE MATERIALIZED AND THE POSSESSION OF THE SAID LAND WAS NOT GIVEN TO THE ASSESSEE AS PER THE AGREED TERMS. BE ING AGGRIEVED BY THE SAME THE ASSESSEE FILED WRIT PETITION IN THE H ONBLE JURISDICTIONAL HIGH COURT FOR OBTAINING LEGAL TITLE OVER THE SAID LAND. THE MATTER TRAVELLED UPTO THE HONBLE SUPREME COURT WHEREBY IT WAS ULTIMATELY ORDERED THAT THE ASSESSEE IS ENTITLE D TO AN AMOUNT EQUAL TO SIMPLE INTEREST CALCULATED AT 11% PER ANNU M FOR THE PERIOD DURING WHICH THE AMOUNT REMAINED WITH THE GOVERNMEN T OVER AND ABOVE THE AMOUNT OF RS. 7 81 00 000/- PAID BY THE A SSESSEE. IN COMPLIANCE WITH THE DECISION OF THE HONBLE SUPREME COURT THE ADMINISTRATOR OF CIDCO AURANGABAD I.E. LIQUIDATOR OF SOOT GIRNEE AURANGABAD REFUNDED THE AMOUNT PAID BY THE ASSESSEE ALONG WITH TOTAL INTEREST OF RS. 1 83 35 436/- DURING THE FINA NCIAL YEAR 2004-05 RELEVANT TO THE A.Y. 2005-06. THE ASSESSEE TREATED THE AMOUNT RECEIVED OF RS. 1 83 35 436/- AS BUSINESS RECEIPT I N THE RETURN OF INCOME FILED FOR A.Y. 2005-06. THE ASSESSING OFFIC ER CONSIDERED THE AMOUNT RECEIVED OF RS. 1 83 35 436/- AS INTEREST IN COME EARNED ON ACCRUAL BASIS DURING THE PERIOD A.Y. 2000-01 TO 200 5-06. THE ASSESSING OFFICER TREATED THE AMOUNT RECEIVED AS I NCOME FROM OTHER SOURCES. THE ASSESSEE HAD FILED RETURN OF INCOME FOR A.Y. 2000-01 DECLARING NIL INCOME. THE ASSESSING OFFICER ASSESS ED THE INCOME OF THE ASSESSEE AT RS. 17 45 046/- BY MAKING AN ADDITI ON OF THE SAME AMOUNT AS INTEREST INCOME FOR A.Y. 2000-01. THE MA TTER WAS CARRIED IN APPEAL BEFORE THE FIRST APPELLATE AUTHOR ITY WHERE AFTER CONSIDERING THE VARIOUS CONTENTIONS RAISED ON BEHAL F OF THE ASSESSEE THE CIT(A) HELD THAT THE MOUNT RECEIVED B Y THE ASSESSEE OF RS. 1 83 35 436/- IS A BUSINESS RECEIPT. AS REGARD S THE YEAR OF ACCRUAL AND TAXABILITY OF COMPENSATION RECEIVED BY THE ASSESSEE THE CIT(A) HELD THAT THE AMOUNT OF COMPENSATION RECEIVE D OF RS. 1 83 35 436/- IS LIABLE FOR CONSIDERATION AS BUSINE SS RECEIPT FOR A.Y. 2005-06 AS CLAIMED BY THE ASSESSEE AFTER CONSIDERIN G ALLOWABLE DEDUCTIONS UNDER THE INCOME-TAX AT 1961. IN THE L IGHT OF THE ABOVE FACTS THE ADDITION MADE BY THE ASSESSING OFFICER O F RS. 17 45 046/- FOR A.Y. 2001-02 WAS DELETED. SIMILARLY THE ADDIT ION MADE BY THE ASSESSING OFFICER OF RS. 83 65 069/- RS. 37 99 675 /- FOR A.Y. 2002- 03 AND 2003-04 WERE ALSO DELETED BY THE CIT(A). TH E SAME HAS BEEN OPPOSED BEFORE US. 3.1. THE LEARNED DR SUBMITTED THAT THE CIT(A) WAS N OT JUSTIFIED IN HOLDING THAT THE INTEREST @ 11% P.A. RECEIVED BY TH E ASSESSEE FROM GOVERNMENT OF MAHARASHTRA AS PER DIRECTION OF THE H ONBLE SUPREME COURT WAS IN THE NATURE OF BUSINESS RECEIPT S. FURTHER THE CIT(A) WAS ALSO NOT JUSTIFIED IN HOLDING THAT INTER EST @ 11% P.A. RECEIVED BY THE ASSESSEE FROM GOVERNMENT OF MAHARAS HTRA IS ASSESSABLE TO TAX IN THE YEAR OF RECEIPT. ON THE O THER HAND THE LEARNED AUTHORISED REPRESENTATIVE SUPPORTED THE ORD ER OF THE CIT(A) AND CONTENDED THAT THE INTEREST @ 11% P.A. RECEIVED BY THE ASSESSEE FROM THE GOVERNMENT OF MAHARASHTRA AS PER THE DIREC TION OF THE HONBLE SUPREME COURT WAS THE BUSINESS RECEIPT AND THE SAME HAS RIGHTLY BEEN HELD TO BE ASSESSABLE TO TAX IN THE YE AR OF RECEIPT. 3.2. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD WE FIND THAT THE ASSESSEE IS A PARTNERSHIP FIRM CONSISTING OF EIGHT PARTNERS ENGAGED IN THE BUSINES S OF DEVELOPERS AND BUILDERS. THE ASSESSEE ENTERED INTO AN AGREEMEN T WITH AURANGABAD ZILLA KAPUS UTPADAK SAHAKARI SOOT GIRNEE MARYADIT GARKHEDE AURANGABAD FOR PURCHASE OF LAND AND ACCOR DINGLY THE ASSESSEE MADE A PAYMENT OF RS. 7 81 00 000/- TOWARD S PURCHASE OF THE LAND. THE PROPOSED TRANSACTION OF LAND PURCHAS E COULD NOT BE MATERIALIZED AND THE POSSESSION OF THE SAID LAND WA S NOT GIVEN TO THE ASSESSEE AS PER AGREED TERMS. THE SAID ACT OF REFUSAL OF POSSESSION OF THE LAND WAS AGITATED BY THE ASSESSEE BY WAY OF WRIT PETITION BEFORE THE HONBLE JURISDICTIONAL HIGH COU RT FOR OBTAINING THE LEGAL TITLE AND POSSESSION OF THE SAID LAND WHI CH WAS NOT ALLOWED. THE MATTER TRAVELLED UPTO THE HONBLE SUP REME COURT WHEREIN ULTIMATELY IT WAS HELD THAT THE ASSESSEE IS ENTITLED TO THE AMOUNT EQUAL TO SIMPLE INTEREST CALCULATED AT 11% P .A. FOR THE PERIOD DURING WHICH THE AMOUNT REMAINED WITH THE GO VERNMENT OVER AND ABOVE THE AMOUNT OF RS. 7 81 00 000/- PAID BY THE ASSESSEE WHICH IS NOT IN DISPUTE. IN COMPLIANCE WI TH THE DIRECTIONS OF THE HONBLE SUPREME COURT THE CONCERNED ADMINIS TRATOR OF CIDCO AURANGABAD REFUNDED THE AMOUNT PAID BY THE A SSESSEE ALONG WITH TOTAL INTEREST OF RS. 1 83 35 436/- DURI NG THE FINANCIAL YEAR 2004-05 RELEVANT TO THE A.Y. 2005-06. THE ASS ESSEE TREATED THE AMOUNT RECEIVED AS BUSINESS RECEIPT IN THE RETU RN OF INCOME FILED FOR A.Y. 2005-06. THE ASSESSING OFFICER CONS IDERED THE AMOUNT RECEIVED AS INTEREST EARNED ON ACCRUAL BASIS DURING THE PERIOD FROM A.Y. 2000-01 TO 2005-06. THE ASSESSING OFFICER TRE ATED THE AMOUNT RECEIVED AS INCOME FROM OTHER SOURCES. THE ASSESSI NG OFFICER ASSESSED THE INCOME OF THE ASSESSEE FOR AY. 2001-02 AT RS. 17 45 046/- BY MAKING ADDITION OF THE SAME AMOUNT A S INTEREST FOR THE SAID YEAR. SIMILAR ADDITIONS WERE ALSO MADE FO R THE OTHER YEARS AS WELL. THUS THE ASSESSING OFFICER HELD THAT TH E AMOUNT OF INTEREST OF RS. 1 83 35 436/- RECEIVED BY THE ASSES SEE IN A.Y. 2005- 06 IS LIABLE TO BE TAXED ON ACCRUAL BASIS FOR THE P ERIOD AY. 2001-02 TO 2005-06. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS FOLLOWING THE MERCANTILE METHOD OF ACCOUNTING. THE ASSESSING OFFICER WAS ALSO OF THE VIEW THAT THE AMOUNT RECEI VED BY THE ASSESSEE IS NOT COMPENSATION BUT THE SAME IS INTERE ST ON DEPOSITS MADE WITH THE GOVERNMENT. THE ASSESSING OFFICER ST ATED THAT THE COMPONENT OF INTEREST IS IN FACT CALCULATED ON THE BASIS OF AMOUNT DEPOSITED BY THE ASSESSEE FOR A NUMBER OF MONTHS. THE ASSESSING OFFICER STATED THAT IN CASE OF ASSESSEE THERE WAS NO ACQUISITION OF LAND AND THE QUESTION OF COMPENSATION DOES NOT ARIS E. THOUGH THE HONBLE SUPREME COURT HAS MENTIONED ABOUT THE ADEQU ATE COMPENSATION TO THE ASSESSEE FOR ANY HARDSHIP OR PR EJUDICE OCCASIONED TO THE ASSESSEE BUT AT THE END THE HON BLE SUPREME COURT HAS DIRECTED THE GOVERNMENT TO PAY SIMPLE INT EREST @ 11% P.A. ALONG WITH THE AMOUNT PAID BY THE ASSESSEE. I N THIS BACKGROUND THE ASSESSING OFFICER CONCLUDED THAT TH E AMOUNT RECEIVED BY THE ASSESSEE IS NOT COMPENSATION BUT IN TEREST LIABLE TO TAX ON ACCRUAL BASIS UNDER THE HEAD INCOME FROM OT HER SOURCES. THE STAND OF THE ASSESSEE HAS BEEN THAT THE ASSESSE E COULD NOT START ITS ACTIVITIES DUE TO MAJOR OBSTACLES AND CON SEQUENTLY HAS SUFFERED HUGE LOSSES. THE ASSESSEE CLAIMED THAT TH E ASSESSEE HAD CONTESTED FOR POSSESSION OF LAND AND NOT FOR ANY CO MPENSATION. THE HONBLE SUPREME COURT HAS AWARDED COMPENSATION/LOSS OF PROFIT CALCULATED AT 11% P.A. ON THE AMOUNT PAID TOWARDS P URCHASE OF LAND. THE STAND OF THE ASSESSEE WAS THAT THE ASSES SING OFFICER WAS NOT JUSTIFIED IN CONSIDERING THE INCOME ON NOTIONAL BASIS AND MAKING ADDITION IN AY. 2001-02. WE FIND THAT UNDI SPUTEDLY THE ASSESSEE FIRM MADE THE PAYMENT OF RS. 7 81 00 000/- IN THE COURSE OF PURCHASE OF LAND. PRIOR TO THE SAME ASSESSEE F IRM WAS BROUGHT INTO EXISTENCE FOR BUSINESS ACTIVITIES. THE INTENT ION OF THE ASSESSEE WAS TO DEVELOP THE LAND WHICH COULD NOT BE MATERIAL IZED BECAUSE THE GOVERNMENT OF MAHARASHTRA DENIED TO SELL THE LA ND TO THE ASSESSEE THOUGH THERE WAS NO BREACH OF TERMS AND CO NDITIONS ON THE PART OF THE ASSESSEE. THE HONBLE SUPREME COUR T HAS NOT DIRECTED THE STATE GOVERNMENT TO GIVE POSSESSION AS PER AGREEMENT BUT ALLOWED COMPENSATION TO BE PAID TO THE ASSESSEE AS A MEASURE TO QUANTIFY THE AMOUNT OF COMPENSATION AT 11% P.A. SIMPLE INTEREST. THE HONBLE SUPREME COURT CLEARLY HELD THAT THE AMO UNT PAYABLE TO THE ASSESSEE WILL BE FOR HARDSHIP OR PREJUDICE OCCA SIONED TO THE ASSESSEE. SO IT MAKES CLEAR THAT THE AMOUNT RECEIV ED BY THE ASSESSEE WAS IN THE NATURE OF COMPENSATION. IN VIE W OF THE ABOVE THE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE AMOUNT RECEIVED BY THE ASSESSEE OF RS. 1 8335 436/- IS A BUSINESS RECEIPT. THIS REASONED FINDING NEEDS NO INTERFERENCE FROM OUR SIDE. 4. AS REGARDS THE YEAR OF ACCRUAL AND TAXABILITY OF THE COMPENSATION RECEIVED BY THE ASSESSEE THE ASSESSIN G OFFICER HAS CONTENDED THAT THE SAME IS LIABLE TO BE TAXED ON AC CRUAL BASIS FOR THE PERIOD A.Y. 2000-01 TO 2005-06. THE ASSESSIN G OFFICER STATED THAT THE INTEREST INCOME ACCRUES FROM YEAR TO YEAR AND NOT ON THE DATE OF GRANTING ENHANCED COMPENSATION. THE CASE O F THE ASSESSEE IS NOT THAT OF ENHANCEMENT OF COMPENSATION. THE AS SESSEE HAD RECEIVED INTEREST ON ENHANCED COMPENSATION AWARDED UNDER THE LAND ACQUISITION ACT ON ACCOUNT OF COMPULSORY ACQUI SITION OF THE LAND OF THE ASSESSEE. IN THE CASE OF THE ASSESSEE THE COMPENSATION IS RECEIVED FOR BREACH OF TERMS BY GOVERNMENT OF MA HARASHTRA. THE COMPENSATION IS RECEIVED FOR LOSS SUSTAINED BY THE ASSESSEE ACCRUED IN THE YEAR OF RECEIPT AS HELD BY THE HONBLE SUPRE ME COURT IN THE CASE OF CIT VS. A. GAJAPATHY NAIDU REPORTED IN (196 4) 53 ITR 114. THE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. MOT ILAL PADAMPAT SUGAR MILLS CO. (P) LTD. REPORTED IN (1979) 118 ITR 825 HELD THAT THE AMOUNT ON ACCOUNT OF DAMAGES ACCRUED ON THE DATE OF DECREE PRIOR TO THE DATE OF ACTUAL RECEIPT WHERE THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. THE ASSESSEE HAS FOLLOWED THE MERCANTILE SYSTEM OF ACCOUNTING. THE DECISION OF T HE HONBLE SUPREME COURT AS WELL AS RECEIPT OF COMPENSATION AM OUNT HAS TAKEN PLACE IN THE F.Y. 2004-05 RELEVANT TO THE A.Y . 2005-06. THE AMOUNT OF COMPENSATION HAS CRYSTALLIZED ON THE EVEN T OF DECISION OF THE HONBLE SUPREME COURT WHICH HAS TAKEN PLACE IN THE F.Y. 2004- 05 RELEVANT TO THE A.Y. 2005-06. IN VIEW OF ABOVE THE AMOUNT OF COMPENSATION RECEIVED OF RS. 1 83 35 436/- WAS LIAB LE FOR CONSIDERATION AS BUSINESS RECEIPT IN A.Y. 2005-06 A S CLAIMED BY THE ASSESSEE AFTER CONSIDERING ALLOWABLE DEDUCTIONS UND ER THE INCOME- TAX ACT 1961. IN THE LIGHT OF ABOVE FACTS THE CI T(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDIT ION OF RS. 17 45 046/- FOR A.Y. 2001-02. FOR SIMILAR REASONS WITH REGARDS TO THE ADDITIONS MADE BY THE ASSESSING OFFICER OF RS. 83 65 069/- RS. 37 99 675/- FOR A.Y. 2002-03 AND 2003-04 THE CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE SA ME. 5. AS REGARDS THE DISALLOWANCE OF PRE-OPERATIVE EXP ENSES OF RS. 62 22 514/- THE ASSESSING OFFICER NOTED THAT THE AS SESSEE HAS CAPITALIZED EXPENSES FOR YEARS TOGETHER ON ACCOUNT OF INTEREST AND PRE-OPERATIVE EXPENSES AND HAS CLAIMED THE EXPENSES AGAINST THE ENTIRE RECEIPTS IN ORDER TO AVOID TAX INCIDENCES. THE ASSESSING OFFICER HAS CONCLUDED THAT THE SAID EXPENSES ARE NO T THE EXPENDITURE LAID OUT OR EXTENDED WHOLLY AND EXCLUSI VELY FOR THE PURPOSES OF MAKING OR EARNING SUCH INCOME. THE MAT TER WAS CARRIED IN APPEAL BEFORE THE FIRST APPELLATE AUTHOR ITY AND RAISED VARIOUS CONTENTIONS. THE CIT(A) AFTER CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAS INCURRED EXPENDITURE TOTALING TO R S. 62 22 514/- DURING THE PERIOD AY. 2000-01 TO 2003-04 IN RELATIO N TO THE PROPOSED TRANSACTION OF LAND PURCHASE. THE ASSESSE E HAS TREATED THE SAID EXPENSES AS DEFERRED EXPENSES AND HAS SHOW N THE SAME UNDER THE HEAD PRE-OPERATIVE EXPENSES ON THE ASSET SIDE OF THE BALANCE SHEET. THE ASSESSEE HAS CLAIMED THE DEDUCT ION OF THE SAID EXPENSES OUT OF THE AMOUNT RECEIVED AS COMPENSATION IN THE A.Y. 2005-06. THE ASSESSEE FURNISHED DETAILS OF THE SAI D EXPENSES WHICH INCLUDED INTEREST ON PARTNERS CAPITAL ACCOUNT TO TH E TUNE OF RS. 53 21 657/- INTEREST ON LOAN RS. 1 48 000/- AND OT HER ADMINISTRATIVE EXPENSES OF RS. 7 52 857/-. THE CIT (A) NOTICED THAT THE ASSESSEE HAS NOT CARRIED OUT ANY OTHER BUSINESS ACTIVITY OTHER THAN THE PROPOSED LAND PURCHASE TRANSACTION. IT WA S SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSEE FIRM IS FOLLOWI NG PROJECT COMPLETION METHOD OF ACCOUNTING. ALL THE EXPENSES RELATING TO A PARTICULAR PROJECT ARE IDENTIFIED AND ARE CLAIMED A S DEDUCTION ONLY IN THE YEAR THE PROJECT IS COMPLETED. THE INCOME O F THE PROJECT IS OFFERED TO TAX IN THE YEAR IN WHICH THE PROJECT IS COMPLETED. THE PROJECT GOT TERMINATED IN THE A.Y. 2005-06 AND HENC E THE EXPENDITURE IN RELATION TO THE SAID PROJECT INCURRE D OF RS. 62 22 514/- UNDER THE HEAD PRE-OPERATIVE EXPENSES D URING THE COURSE OF THE PROJECT I.E. A.Y. 2000-01 TO 2005-06 HAS BEEN CLAIMED IN A.Y. 2005-06. FOR THIS PROPOSITION THE ASSESSE E RELIED ON DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF WALL STREET CONSTRUCTION LTD. VS. JCIT (2006) 102 TTJ (M UM) 505 WHEREIN IT HAS BEEN HELD THAT IN THE CASE OF ASSESS EE FOLLOWING PROJECT COMPLETION METHOD TRUE PROFITS CAN BE DETER MINED ONLY WHEN ENTIRE COST OF THE PROJECT DIRECT OR INDIRECT INCLUDING FINANCING COST IS ADDED TO THE VALUE F WORK IN PROGRESS. AFT ER CONSIDERING THE SUBMISSIONS RAISED ON BEHALF OF THE ASSESSEE AND FO LLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF WALL STREET CONSTRUCTION LTD (SUPRA) THE CIT(A) DELET ED THE PRE- OPERATIVE EXPENSES OF RS. 62 22 514/- CLAIMED BY TH E ASSESSEE IN THE A.Y. 2005-06. HAVING CONSIDERED THE RIVAL SUBMI SSIONS AND PERUSING THE MATERIAL ON RECORD WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) WHO HAS GRANTED RELIEF TO ASSES SEE OF RS. 62 22 514/- AS DISCUSSED ABOVE. THE SAME IS UPHELD . 6. AS REGARDS THE ISSUE OF REOPENING OF THE ASSESSM ENT WE FIND THAT SINCE WE HAVE DECIDED THE ISSUE ON MERITS IN F AVOUR OF THE ASSESSEE SO THE PRELIMINARY ISSUE RAISED BY THE RE VENUE GOES ACADEMIC. 7. IN THE RESULT ALL THE APPEALS OF THE REVENUE AR E DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 29 TH JULY 2013. SD/- SD/- (R.K.PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 29 TH JULY 2013 ANKAM COPY TO:- 1) ASSESSEE 2) DEPARTMENT 3) THE CIT(A) AURANGABAD 4) THE CIT- AURANGABAD 5) THE DR A BENCH I.T.A.T. PUNE. 6) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY I.T.A.T. PUNE