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2009 (12) TMI 47 - MADRAS HIGH COURTDirect Expenditure on project – ITAT disallowed the direct expenditure incurred towards various projects as claimed by the appellant - The assessee is engaged in the business of promotion of real estate and construction. For the assessment year 1997-98, the assessee filed return of income on 28.11.1997 admitting the total income of Rs.1,08,720/-. While completing the assessment, among other disallowances, the Assessing Officer disallowed a sum of Rs.12,29,025/- towards direct expenses, namely, site electricity, site expenses, commission, rent etc. The Assessing Officer chose to disallow the direct expenditure in respect of four projects namely Yesodha, Blossom, Gayathri and Krishna arcade – held that - It is clear from the assessment order where the amount of Rs.12,29,025/- claimed as expenses has been accepted by the assessee itself that the claim should be disallowed. - However, the assessee filed an appeal by stating that the commission and brokerage in respect of procurement of land have not been granted as expenses incurred by the assessee. Both before the First Appellate Authority and the Tribunal, this stand has been taken by the assessee. We are unable to appreciate the arguments of the learned counsel for the assessee, as what was disallowed by the Assessing Officer was on the consent given by the assessee regarding expenses as direct expenditure on the projects in a sum of Rs.12,29,025/-. Apart from that, the amount of brokerage or commission has never been considered in the assessment order. An issue which is not available in the assessment order has been taken on appeal before the two Authorities below and ultimately before us also – appeal dismissed – decided in favor of revenue.
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