TMI Blog2009 (7) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... s a dissolved firm, which attempted in the past to construct a residential complex of apartments. But, any how, the project was not completed and abandoned in the mid-way. Later on, the assessee negotiated with a hotelier and sold the half constructed property for a price of Rs. 1,80,00,000. The major part of the sale consideration was appropriated to pay of the loan and interest due to M/s. Muthoot Bankers, from whom the assessee had availed loan facilities. 4. The assessee filed its return declaring a loss of Rs. 40,06,906. After examining the books of account and other details, Assessing Officer accepted the return and assessment was completed determining the loss at Rs. 40,06,906. 5. On examining the assessment records, the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the interest expenditure against the income of the impugned assessment year. Rejecting the explanations offered claimed by the assessee, the Commissioner confirmed her views and further held that the sum of Rs. 50 lakhs relating to the interest should have been treated as part of the project cost. She also observed that the assessee could not have carried forward the loss to the ensuing assessment years. Accordingly, she set aside the assessment and directed to re-do the assessment in the light of the revision order and in accordance with law. 8. The assessee is aggrieved and, therefore, this appeal before us. 9. We heard T.M. Sreedharan, learned counsel appearing for the assessee and Shri A.K. Thattai, learned Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee never completed the project and it never had an occasion to work out the profit or loss in the normal sense. Whatever excess or shortage is made out on sale and on closure of the accounts, they were in the nature of capital profit or capital loss. There is no question of business profit or business loss simply for the reason that the assessee did not complete the business cycle envisaged in the beginning. 12. Whether the interest cost is to be treated as a time cost or as a project cost, it does not make any difference in the present case. This is because the project has come to a halt and the property as a whole has been sold out, in its incomplete stature. As far as the assessee is concerned, there is no question of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, in the facts and circumstances of the case, it is not possible to agree with the view of the learned Commissioner that the order passed by the Assessing Officer in the present case is erroneous. 15. As the assessee s project has already come to a halt, there is no question of any carry forward and set off of losses in the succeeding assessment years and all the expenses would naturally be set off instantly against the consideration received by the assessee on the sale of the incomplete property. Therefore, we do not find much force in the findings of the learned Commissioner that the assessment is prejudicial to the interest of the revenue. 16. In the facts and circumstances of the case, we find that the revision order passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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