TMI Blog2011 (6) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the additional development cost paid to the Municipal Corporation and also regarding site development expenses, BMC expenses and brokerage charges. 3. Aggrieved, assessee preferred an appeal before the Ld. CIT(A) and raised the following ground: The Ld. DCIT erred in ignoring the loss as per return of income of ₹ 23,11,275/- while computing the total taxable income for A.Y. 2007-08. 4. The Ld. CIT(A) held as follows: The A.O. in its computation of income has taken the income as per return of income at Nil and then made various additions. The appellant has stated that it has filed a loss return showing loss as per return of income of ₹ 23,11,275/-. I have perused the above submissions and had asked the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income forming part of the Income tax return acknowledgement against the column total loss the amount of ₹ 23,11,275/- appears clearly. Therefore, we are convinced that the Ld. CIT(A) has inadvertently omitted to see the Income Tax return Acknowledgement where the total loss is made out of ₹ 23,11,275/-. Therefore we allow the loss of ₹ 23,11,275/- from the taxable income for A.Y. 2007-08. 6. The second ground raised by the assessee before the Ld. CIT(A) is as follows: The learned Dy. Commission of Income-tax erred in disallowing ₹ 24,24,200/- being the additional development cost charged by BMC . 7. Before the Ld. CIT(A) the AR of the assessee stated that the said expenses was paid to the Municipal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is certainly a one time expenditure and has also given him benefit of enduring nature. The Hon'ble ITAT, Mumbai E Bench in the case of Radhaballabh Silk Mills Pvt. Ltd. Vs. Dy. CIT, Circle 4(1), Mumbai (2007) 12 SOT 423 Mum has held that the payment made to BMC as penalty to regularize unauthorized consideration carried out without objection approval from BMC cannot be treated as revenue expenditure. Further, the Hon'ble ITAT, Mumbai I Bench in the case of National Plastic Ltd. Vs. ITO, Wd 1(2)-1 (2007) 11 SOT 415 Mum has held that the amount paid as penalty for consideration of building without taking permission from the concerned administrative/regulatory authority cannot be allowed u/s. 37(1) as it was penal in nature. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll such time said amount to be kept with MCGM as a disbursement amount towards compensation for loss of facility/amenity in the said neighbourhood of the building under reference. ii) I pass the order that an amount of ₹ 59,900/- shall be paid to MCGM towards infrastructure development. iii) An amount of ₹ 20,34,600/- which is an enhanced fine for carrying out work beyond approval. The developer shall pay aforesaid amount stated at Sr. No.2, 3 and 5 within 30 days from receipt of this order failing which I direct E.E.B.P (H K/E) to pursue the action by following due process of law. 10. The Ld. Counsel for the assessee also relied on the decision of the Delhi High Court in the case of CIT Vs Loke Nath Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ex post facto sanction for the constructions made after the sanction had lapsed by accepting by way of compensation such sum as it may deem reasonable. It is at that stage that the assessees had to consider the question of payment on the principles of ordinary commercial trading or on grounds of commercial expediency. Seen in the light of the law noticed above, the assessees had the desire to preserve the building and to save a part of it from demolition. The expenditure was for saving of the loss on the alteration of the closing stock of the assessees. Such an expenditure has to be permitted as a deduction made for the purpose of carrying on of business. The question whether a particular expenditure is a revenue expenditure incurred for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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