2018 (10) TMI 586 - ITAT DELHI

Accrual of income - Addition on account of transfer of development rights - receipt of advances - Held that:- The assessee-company rightly contended that income from transfer of development rights would accrue as per I.T. Act when assessee-company would receive approval for construction for specified FAR area from GDA. Unless and until it does not receive the approval from GDA, income would not accrue to the assessee-company. - Decided in favor of assessee.

Addition on account of transfer of development rights - allowable expenditure - Chargeability and accruability of value of development rights together with land - following the rule of consistency - Held that:- The assessee-company maintained books of account on the same accounting pattern as have been maintained in earlier years and the offering of the income as per sanctioned FSI have been accepted by the Tribunal in A.Y. 2008-2009. When the assessee-company followed the same accounting system in subsequent year and accepted by the A.O, there is no reason for the A.O. to deviate from the same. CIT(A) has not given any independent finding with regard to claim of the expenditure made by assessee-company as against proportionate income offered for taxation. No fault have been found in the accounting system followed by assessee-company. No material have been produced by the Revenue to rebut the contention of the assessee-company. No justification to disallow the expenses claimed by the assessee-company being cost of the land and development expenses incurred by the assessee-company. - Decided in favour of assessee.

Deemed dividend addition u/s 2(22)(e) - Held that:- As perusing the relevant records, it reveals that they are in the form of current and inter banking accounts and contain both types of entries i.e. giving and taking the amount and appear to be a current account and cannot be considered as loans and advances as contemplated u/s 2(22)(e) of the IT Act. The identical issue have been decided by the Tribunal in the case of assessee and other group concerns. Following the same, we are of the view that the amount in question could not be treated as deemed dividend under section 2(22)(e). - Decided in favour of assessee.