TMI Blog2024 (2) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... e said expenses have also not been doubted by the Revenue. The assessee s case is that it has followed Accounting Standards in respect of its project and the same has not been disputed by the Revenue authorities. For the reasons set out above and following the decision of Somnath Buildtech [ 2022 (11) TMI 250 - DELHI HIGH COURT] we allow Grounds of the assessee and direct the Ld. AO to delete the impugned disallowances. Denial of credit of TDS as appearing in Form 26AS - HELD THAT:- This needs verification. We, therefore, direct the Ld. AO to verify the assessee s claim. If found to be correct, he should take remedial action and allow appropriate relief to the assessee. Appeal of the assessee is allowed. - Shri Shamim Yah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and disallowed them holding that these are not project expenses done for earning revenue during the year is erroneous and bad in law; 4. Without prejudice to the above grounds, that on the facts and circumstances of the case and in law, AO erred in issuing demand notice under section 156 of the Act, without appreciating that once they allow complete credit of TDS as appearing in the Form 26AS of the Assessee no demand will be payable and refund will arise payable to the Assessee. 5. That on the facts and circumstances of the case and in law, the AO has erred in levying /charging interest under sections 234A and 234B of the Act. 6. That on the facts and in the circumstances of the case and in law, the Id. AO has erred in not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charging of interest under section 234A and 234B is consequential. Ground No. 6 is about initiation of penalty proceedings under section 271(1)(c) of the Act which is pre-mature and is subject matter of separate proceedings. The remaining grounds are adjudicated herein below. 5. Ground No. 2 - Disallowance of Advertisement and business promotion expense. Ground No. 3 Disallowance of Brokerage expenses. Since the findings of the Ld. AO/Hon ble DRP are common in respect of both these disallowances, these are taken up together for consideration. The Ld. AO disallowed advertisement and business promotion expenses of Rs. 5,12,89,562/- and Rs. 61,67,000/- as project expense(s) not done for earning revenue during the year and added the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ITA No. 488/2019) dated 13.05.2019 (Del). 8. The Ld. CIT-DR relied upon the order of the Ld. AO duly approved by the Hon ble DRP. 9. We have carefully considered the rival submissions and perused the records. The facts are not in dispute. The assessee is real estate developer and is following Percentage Completion Method of accounting (POCM) and in the year of account the project has been completed to the extent of 0.14% only. This has not been disputed by the Revenue. This is the rationale on the basis of which the assessee did not account for any revenue in its books in the year. 10. The only reason assigned by the Ld. AO/Hon ble DRP for the impugned disallowances is that such expenses were not incurred for earning revenue durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that these expenses are not a direct cost of the specific project but are indirect costs incurred by the Assessee for development of its real estate business. The Revenue does not dispute that these expenses are admittedly not incurred as cost towards completion of the on-going real estate project and therefore in our considered view these expenses cannot be added toward the cost of valuation of the specific asset. The expenses such as advertising expenses, business promotion and brokerage and commission have been incurred by the Assessee towards building its reputation and network in the real estate market and so also the software development charges are incurred towards administrative expenses. 13. We do not find any error in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax remained the same in the present assessment year as well as in the subsequent assessment year. Therefore, the dispute raised by the Revenue is entirely academic or at best may have a minor tax effect. There was, therefore, no need for the Revenue to continue with this litigation when it was quite clear that not only was it fruitless (on merits) but also that it may not have added anything much to the public coffers. 15. We, therefore, do not find any infirmity in the order of the ITAT and that any substantial question of law arises for consideration in the present appeal. Accordingly, the same is dismissed. 13. For the reasons set out above and following the decision of Hon ble Delhi High Court in Somnath Buildtech ..... X X X X Extracts X X X X X X X X Extracts X X X X
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