TMI Blog2012 (11) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... during the appellate proceedings certificate from the auditors was filed to the effect that they had made a wrong entry for such amount. Since the AO has treated the same as trading receipt on such receipt, the deduction of cost and other expenditure incurred by the assessee is required to be given as decided in Calcutta Company Limited Versus Commissioner Of Income-Tax, West Bengal [1959 (5) TMI 3 - SUPREME COURT] - issue is restored back to the file of AO to decide afresh after verifying the claim of the assessee in respect of expenditure incurred out of the trading receipt and make a de novo assessment - assessee’s appeal is allowed for statistical purposes. - ITA No.663/Ahd/2010 - - - Dated:- 12-10-2012 - Shri, A.K.Garodia, And S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the residential units/flats without allowing the deduction for the corresponding cost thereof which is evident from the balance sheet as on 31-3-2006 furnished to the A.O It is submitted that the work of construction was incomplete as on 31-3-2006 cannot be considered as the sale value of the work carried out till 31-3-2006 but has to be treated as an advance for the further cost to be incurred in the subsequent year. It is submitted that, even if the Ground No.1 is decided against the appellant, the ultimate surplus of Rs.46352 only can be taxed as an income in the next year i.e. year of completion and, therefore, the entire addition of Rs.7506811 be deleted or the same be reduced to Rs.46352 if the surplus is to be taxed in this year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03- 2006. He submitted that only surplus amount can be taxed as income in the next year. He placed reliance on the judgment of Hon ble Supreme Court rendered in the case of Calcutta Co. Ltd. v. CIT (1959) 37 ITR 1 (SC). In support of the contention that the expenditure incurred on the development and construction is allowable since such expenditure was incidental to the carrying on the business. He submitted that both the authorities below lost sight of the fact that though the contribution received from the Members for the construction of residential units of the flats may not be treated unsecured loan and same represents a liability to the Members because in case of sale same is refundable/adjustable. The same should have been shown a sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Though it is projected as a society and receipt are unsecured loan, it is a adventure in the actual of trade. All the ingredients required for adventure in the nature of liability exist and the receipts are in the nature of holding receipts. He submitted that Ld. CIT(A) has dismissed the appeal on the ground that the assessee itself has accepted the amount of Rs.75,06,811/- received during the year under consideration has been shown wrongly under the head unsecured loan by the auditors. However, neither during the assessment proceedings nor during the appellate proceedings certificate from the auditors was filed to the effect that they had made wrong entry for such amount. He submitted that both the authorities below have failed to appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 44AB of the Act. Therefore, under the circumstances it is difficult to verify the correctness of the accounts maintained by it for the relevant period. Moreover, the assessee, itself, had accepted that the amount of Rs.75,06,811/- received during the relevant period has been shown wrongly under the head unsecured loan by the auditors. However, neither during the assessment proceedings nor during the appellate proceedings certificate from the auditors was filed to the effect that they had made a wrong entry for such amount. We have given our thoughtful consideration to the fact and circumstances and the material available on record it is undisputed that the AO has treated the unsecured loan as a nonrefundable liability and also tre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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