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2019 (1) TMI 1536 - HC - Income TaxDisallowance of brokerage payable - assessee follows the percentage method mandated [under Accounting Standards 7 -“AS-7”], and recognised under Section 145 - Held that:- It is not disputed that for past years as well, the treatment given by the assessee was accepted by the Revenue. Furthermore, the project completion method which this Court alluded to in DLF Universal Ltd. [2015 (4) TMI 981 - DELHI HIGH COURT] finds reflection as an approved method in the decision of the Supreme Court. Furthermore, this Court notices that as to what appropriate methods of treatment of expenditure in the hands of a particular business per se have to be adopted, is the subject matter of Accounting Standards. In the present case, after 2007, every builder must necessarily follow the percentage of completion method by following the AS-7. If the Revenue’s arguments were to be accepted too, the expenditure which is clearly discernable and which may accrue in a particular year and even be paid has to necessarily be disallowed in substantial part and never proportionality granted. In such event, the likely result would be that for next succeeding year, the AO must find himself bound by previous determination and depend upon the balance amount paid. Given the statement in CIT v. Bilahari Investment Pvt. Ltd. [2008 (2) TMI 23 - SUPREME COURT] that adoption of one or more methods and the implementation of it, is largely revenue neutral. This Court is of the opinion that no question of law arises on this aspect. Disallowance under Section 14A - Held that:- Revenue appellate authorities noticed that for the concerned AY, the assessee did not indicate "tax exempt" income to attract the provision. Therefore, the decision in Cheminvest Ltd. v. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] clearly applied which the ITAT followed. No question of law, therefore, arises. Treatment of software expenditure claims - Held that:- The Court is of the opinion that the findings of the CIT(A) and ITAT are pure findings of fact. Moreover, as held by the CIT(A), the AO did not even care to examine the terms of agreement which the assessee entered into with the service provider. As far as the software expenditure goes, the Court is of the opinion that the findings of fact rendered by the CIT(A) and ITAT cannot be faulted.
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