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TMI Blog2020 (1) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,61,518/- made by the A.O. on account of estimated gross profit at 15% of deemed sales of commercial space to M/s. Bansal Corporation Ltd. 3.1. The A.O. has made the aforesaid addition on account of gross profit @ 15% on deemed sales of Rs. 14.57 crores. The A.O. observed that on this sale accounted for the current year, assessee would have to pay MAT which have been saved by so-called sale in previous assessment year. The agreement Dated 31.03.2007 is an anti-dated document created to show transfer though not actual transfer took place. Further sale and purchase cannot be a unilateral act, it has to be bilateral act which took place in assessment year under appeal. The agreement in question was merely an arrangement to show sale in prece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below but also suggested that the matter could be remanded to the Ld. CIT(A) for consideration afresh. 6. After considering the matter in issue and submissions of both the parties, we are of the view that the matter requires re-consideration at the level of the Ld. CIT(A). A.O. had discussed the issue in detail and has given a specific finding of fact how the case of assessee was distinguishable from A.Y. 2007-2008. The Ld. CIT(A) did not discuss any of the fact brought out by the A.O. in the impugned order and merely followed assessment order for the A.Y. 2007-2008 for the purpose of deleting the addition. The Order for the A.Y. 2007-2008 under section 143(3) is placed on record which is silent with regard to matter in issue. No reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case. The assessee is in the business of promoting and developing of commercial complexes. The commercial shop/space developed by the assessee represents stock-in-trade and no capital asset came into existence. The expenditure incurred on development of commercial projects is charged to P & L A/c which ultimately gets allocated to the projects and closing inventories is valued accordingly taking into account the total expenditure incurred during the year. Therefore, expenditure attributed to the sales made during the year are expenditure revenue in nature and cannot be considered as capital expenditure. The A.O. was informed that even after completion of the project, the assessee was under an obligation to maintain the premises develo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttedly, the assessee is engaged in the business of developing and promoting commercial complexes. The assessee explained that it is under obligation to make minor/major modification to suit the convenience of the lessee. Therefore, fitment charges are incurred for better occupancy by the customers. Since the cost of construction is part of stock-in-trade and income have been offered accordingly, therefore, if the fitment charges are incurred for leased-out premises, the same would be revenue in nature. No new capital came into existence and no such finding have been given by the A.O. Therefore, considering the nature of business of assessee, the Ld. CIT(A) correctly deleted the addition because the expenditure is related to the business in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td., (supra) have been overruled by the Hon'ble Supreme Court in the case of Munjal Sales Corproation 168 Taxman 43 (SC) wherein it was held that "the interest free loans and advances to the sister concern out of own funds is not hit by the provisions of Section 36(1)(iii) of the I.T. Act, 1961." Further no nexus have been proved if advances have been given out of interest bearing funds. The Ld. CIT(A), therefore, deleted the addition. 13. The Ld. D.R. relied upon the Order of the A.O. and submitted that advance have reduced in assessment year under appeal and relied upon the following decisions : 1. Punjab Stainless Steel Inds. vs., CIT [2010] 324 ITR 396 (Del.) 2. Thukral Regal Shoes vs., CIT [2017] 391 ITR 119 (P&H) 3. Abhishek In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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