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2021 (3) TMI 735 - HC - Income TaxDisallowance of payment paid to the landlord towards the land expenses - appellant-Company had to pay compensation on account of landlord to various tenants from time to time to get the possession of the property for development - HELD THAT:- The appellant decided to settle the dispute between Mr. D. Ramesh and his sister in order to continue with the construction of project on reliasation of the property that may arise from the sale of apartments and under those circumstances, the amount was paid to Mr.D.Ramesh. Tribunal has merely relied upon certain clauses of the Joint Development Agreement which was entered into at the initial stage of the project. During the course of the project, there occurred many obstacles and hurdles and they were faced by the appellant and therefore, merely relying on the Joint Development Agreement, the Tribunal erred in law and facts, especially when the Tribunal has not doubted the genuineness of the expenditure incurred by the appellant. The amount which was paid to Mr.D. Ramesh was rightly treated as cost of the project as evidenced by the accounts which was certainly within the knowledge of the Assessing Officer and the Appellate Authority. The cost of the project includes the sum paid to Mr. D. Ramesh and the entire project has been sold out as reflected in the profit and loss account. Therefore, the Tribunal has certainly on erroneous assessment of facts, not allowed the amount paid to Mr.D.Ramesh as deduction, as cost towards the project. The Tribunal was certainly having no power to re-write the agreement and if the parties have modified the understanding by an agreement, the same should not have been ignored specially when the amount paid to Mr.D. Ramesh was certainly an expenditure, it should have been allowed as a deduction. - Decided against revenue.
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