TMI Blog2021 (3) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... ee as called for by Ld. AO during the course of assessment proceedings. Since the submissions/explanations were found to be satisfactory, no further information was called from the assessee which is also evident from the fact that the returned loss has been accepted by taking note of the fact that the project was in preliminary stage and the assessee has not sold any flat during the year under consideration but received mere advances. In view of the foregoing, it could be concluded that the view of Ld. AO, could not be said to be contrary to law, in any manner, on both the issues as alleged by Ld. Pr. CIT. There was proper application of mind by Ld. AO on both the issues. Another pertinent fact to be noted is that notional interest on ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s. 263 as exercised by learned Pr. Commissioner of Income Tax-29 [Pr. CIT ] for Assessment Year (AY) 2014-15 vide order dated 17/01/2019. The effective ground read as under:- 1. The learned Pr. CIT erred in treating the order passed by A.O. u/s. 143(3) dated 28.12.2016 as erroneous and prejudicial to the interest of revenue. 2. The learned Pr. CIT ought not to have treated order passed u/s. 143(3) as erroneous or prejudicial to the interest of revenue. 3. The order passed u/s. 263 is bad in law. 2. We have carefully heard the rival submissions and perused relevant material on record including submissions made by the assessee during the course of assessment proceedings as well as during revisional proceedings. The vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings and Ld. AO accepted the same after due consideration. Therefore, the order was passed with due application of mind. Regarding revenue recognition, it pointed out that the sole project being undertaken by the assessee was in initial stages and expenditure on construction was only 4.25% during the year. The condition that construction cost should not be less than 25% of estimated cost to recognize the revenue was not met. Similarly, the condition that 25% saleable project area is to be secured by contracts/agreements were also not fulfilled since percentage of area booked by the assessee was less than 18% during the year. Regarding charging of interest on partner's capital balances, the attention was drawn to the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a specific query was raised regarding charging of interest on overdrawn capital of the partners. In response thereto, it was submitted that there were no sales during the year. The copies of partner's capital account as well as details of unsecured loans were furnished. Party-wise details of interest finances expenses were also submitted. In submission dated 30/11/2016, a note on business activity with detail of project under implementation and commencement certificate was filed. It was submitted that interest on capital was not charged as per partnership deed. It was reiterated that no sales were made during the year. In notice dated 30/11/2016, the assessee was directed to file details of total saleable area, built up area and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of completion achieved by the assessee during the year as well as clinched with the issue of interest expenditure. The requisite details as well as documentary evidences were furnished by the assessee as called for by Ld. AO during the course of assessment proceedings. Since the submissions/explanations were found to be satisfactory, no further information was called from the assessee which is also evident from the fact that the returned loss has been accepted by taking note of the fact that the project was in preliminary stage and the assessee has not sold any flat during the year under consideration but received mere advances. In view of the foregoing, it could be concluded that the view of Ld. AO, could not be said to be contrary to la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble Court in its subsequent judgment titled as CIT V/s. Max India Ltd. (295 ITR 282). Similar principal has been followed by jurisdictional High Court in Grasim Industries Ltd. V/s. CIT (321 ITR 92). The Hon'ble Delhi High Court, CIT V/s. Vikas Polymers ( 194 Taxman 57 16/08/2010) observed that as regards the scope and ambit of the expression erroneous , Hon'ble Bombay High Court in CIT vs. Gabriel India Ltd. [1993 203 ITR 108 (Bombay)], held with reference to Black's Law Dictionary that an erroneous judgment means one rendered according to course and practice of Court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles and thus it is clear that an order cannot be termed a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
