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2018 (6) TMI 63 - AT - Income TaxClaim of expenditure towards Interest on PDCs paid in Cash - Direction to compute the interest on post dated cheques from the date after the six months of issue of such post dated cheques i.e. from the date of execution of sale-deed - Held that:- Assessee was used to pay part payments of the sale consideration in respect of the land purchased at the time of execution of the sale-deed and the payments of balance sale consideration were invariably made through post dated cheques (PDCs) and for the intervening period )i.e. period between the date of sale deed and the date of encashment of PDCs), interest was paid in cash to the vendors of the land by the vendee company on monthly basis @ 1.25% p.m. on the amount of PDCs and this cash payment of interest by the vendee company, was not accounted for by it, in its books of account. The addition on the ground has been made in the several group companies of the BPTP group during the course of earlier assessment proceedings u/s 143(3)/148/153A in consequence to search carried out on 15/11/2007. - Decided against revenue Additional payment made to the owners of the land as allowable u/s 37 - Held that:- Payment for acquiring land cannot be said disbursement of expense or not claimed as expense. In case of owner i.e. assessee effectively the owner of the land is purchasing the same and selling all the rights in said land at a cost of land plus ₹ 35,000 per acre. Therefore, the cost of land plus ₹ 35,000 per acre is the sale cost which effectively claimed but due to accounting entries, such transaction gets squared up to the extent of cost of land, as such owner including the assessee is directly crediting ₹ 35,000 per acre in its P&L account. - Revenue appeal dismissed.
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