9911796707
TMI Blog2021 (7) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act, 1961 (here-inafter referred to as "the Act").The assessee has filed the Cross Objection in the Revenue's appeals bearing ITA no. 685/AHD/2016 for the Assessment Year 2011- 2012. 2. The Revenue has raised the following grounds of appeal: 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,91,25,000/- made on account of disallowance of construction loss. 2. The ld.CIT(A) has failed to appreciate that the assessee has claimed the loss on estimation basis and therefore not allowable u/s.37 of the Act. 3. On the facts and circumstances of the case, the Ld.Commissioner of Income Tax(A) ought to have upheld the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the Ld.Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 4.4 The AO also rejected the contention of the assessee i.e. the loss claimed in the year under consideration was offered to tax in the subsequent year when bungalows constructed by the assessee got regularized by the competent authority, on the reasoning that the loss was claimed in the year under consideration which is not permissible under the provisions of the Act. In view of the above the AO disallowed the construction loss claimed by the assessee for Rs. 1,91,25,000/- and added to the total income of the assessee. 5. Aggrieved assessee preferred an appeal to the learned CIT (A) who deleted the addition made by the AO by observing as under: 2.2. I have considered the contentions of the appellant as well as the details compile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the same. When AMC has approved the construction and regularized the irregularity, if any, by issuing the B.U. Permission and vacated the stay, it cannot be said that the expenditure is being prohibited under the law and is allowable under section 37(1) of the Act. If the loss is not allowed, it would be tantamount to double additions as the entire receipts in subsequent years have been shown as income and tax has been paid thereon and as the appellant has booked the loss on the basis of Accounting Principles issued by the Institute of Chartered Accountants of India, hence the construction loss incurred by the appellant for an amount of Rs. 1,91,25,000/- is allowed. Hence, appeal on this ground is allowed. 6. Being aggrieved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lead to the double addition which is not desirable under the provisions of law. This fact was also brought to the notice to the AO by the assessee at the time of assessment proceedings but the same was rejected by the AO by observing as under: 4.8 Also assessee has submitted that if loss is disallowed then it will be double addition as income has been subsequently recognized. The contention of the assessee is not correct as it has claimed a deduction in the current assessment year and which can be allowed only it is permissible under the provision the Act. 8.1 Assuming, the contention/finding of the AO is correct that impugned loss is not allowable for deduction in the year under consideration, then it is incumbent upon the AO to reduce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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