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TMI Blog2018 (9) TMI 1896X X X X Extracts X X X X X X X X Extracts X X X X ..... empt income. This is precisely what the learned CIT(A) has held. In view of the matter and in view of the decision of the learned CIT(A) which is clearly in accordance with the law laid down by the Hon'ble jurisdictional High Court (supra), we see no reasons to interfere in the matter. 4. Ground no.1 is thus dismissed. 5. In ground nos. 2 & 3 the assessee has raised following grievances:- "2. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,58,94,590/- on account of disallowance of deduction u/s 80-IB(10) of the Act. 3. The Ld. CIT(A) has erred in law and on facts by not appreciating the facts that various charges such as AEC, AUDA, legal etc received by the assessee is not part of the income eligible for deduction u/s 80-IB(10) of the Act." 6. To adjudicate on these grounds, only a few material facts need to be taken note of. During the course of scrutiny assessment proceedings, the Assessing Officer noted that during the relevant previous year the assessee has received a sum of Rs. 1,58,94,590/- towards charges collected from the customers for AEC, AUDA, legal charges etc. The Assessing Officer was of the view that these receipts are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reproduced as under :- "If any amount becomes payable to AUDA, AMC, the State Government or other public authority like betterment charges or development taxes or any other charges, the same shall be reimbursed by the purchaser as may be fixed by the vendor or levied by the authority and the purchaser is liable to pay the same directly." (Emphasis supplied) 10.3 In this case the appellant has undisputedly paid these amount to AUDA, AEC and legal charges, the ledger of which have been produced before me in the Paper Book so filed. The appellant contends that such charges paid to AUDA, AMC and legal charges are essentially recovered from each of the customer as per Clause-19, crucial fact which has been omitted by the A.O. In a nutshell such amount and when received by the appellant has been received in pursuant to the sale deed, a legal document pertaining to the instant housing project and therefore it is closely related to the housing project and thus becomes eligible for deduction u/s.80IB(10) of the I.T. Act. 10.4 Further, my attention was drawn to the decision by Hon'ble Kolkata Tribunal in the case of ACIT vs North city DeveIoper (ITA No.1307/Kolkata/2010 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flat owners/purchasers is having direct nexus with the activity of developing and building housing project. We also observe on perusal of details at page 60 of the paper book that the total receipts against CESC, electricity and generator was of Rs. 45,70,703/- and whereas the expenses incurred by the assessee was of Rs. 63,94,341.94 and thus there was a loss of Rs. 18,23,638.94. Besides above, in respect of Rs. 3,66,763/-, which is also mentioned in ground No.3 of the appeal, received by the assessee from flat owners for extra work, we observe that the said work was carried out before handing over of possession of the respective flats to the buyers and not after handing over of the possession. The department has disputed the position but there was no cogent material brought on record to dislodge the fact that the said extra work was carried out by the assessee in terms of clause (c) of Section-A of Sixth Schedule of the Sale Agreements entered into with the flat buyers. Therefore, we hold that Id. C.I.T.(A) has rightly held that the said receipt of Rs. 3,66,763/- has a direct nexus with the activity of undertaking developing and building housing project and is eligible to be incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t i.e. para-7 is reproduced below for ready reference :- 6. With respect to the remaining amount covered under the discussion, balance written off out of the payments to contractors and suppliers, we notice that assessee had consistently taken a stand that: "The amounts have been generated during the course of business. In case of supplier payments sometimes the Appellant deducts some amounts and pays the bills. Since the amounts are generated during the course of business the same are eligible for deduction u/s. 80-IB(10) of the Act." 7. It would thus emerge that during the course of business in developing housing project, assessee had made payments to the suppliers towards various purchases made. On such payments, the assessee would occasionally deduct some amounts and pay the bill. Difference between the bill amount and payment actually made would be the amount generated during the course of business, Assessee therefore, contended that same should form pan of eligible deduction under section 80IB(10) of the Act. We have no hesitation in upholding the view of the CIT (Appeals) as well as Tribunal. Assessee following mercantile system of accounting may have debited claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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