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TMI Blog2024 (7) TMI 1485X X X X Extracts X X X X X X X X Extracts X X X X ..... d facts of the case in deleting the addition of Rs. 58,09,780/- made by AO on account of notional ALV in respect of unsold spaces/ flats treating the same as income from house property. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and facts of the case allowing part relief towards this allowance of deduction u/s 80-IB at Rs. 4,69,59,072/- made by AO by way of proportionate allocation various expenses to eligible projects where as such deduction is to be computed as if each eligible unit was an independent and only source of income as provided u/s 80- IA(5) of the income tax Act, 1961 and see 80-IB (13) of income tax Act, 1961. 4. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and facts of the case in allowing part relief towards this allowance on deduction u/s 80-IB at Rs. 4,69,59,072/- by admitting additional details and evidences without affording any opportunity to AO in violation of provision of Rule 46A of income tax Rule 1962 and ignoring the request of AO in prescribed form ITNS -51 as required by Ld. CIT (A) before disposal of appeal. 5. On the facts and circumstances of the case, the Ld. CIT(A) has erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 14A of the Act, addition made by the AO, qua the ALV of vacant properties amounting to INR 58,09,780/-. However, in respect of the disallowance of deduction u/s 80IB(10) of the Act, he partly allowed the claim of the assessee. Thereby, he reduced the disallowance of deduction u/s 80IB(10) of the Act out of total disallowance of INR 4,69,59,072/- by directing the AO to re-compute the disallowance on the basis of his finding in respect of allocation of various expenses on eligible projects. The Ld.CIT(A) deleted addition(s) related to ALV of vacant properties, disallowance u/s 14A of the Act and he substantially reduced disallowance of deduction u/s 80IB(10) of the Act, from INR 4,69,59,072/-. 5. Aggrieved against this, both the assessee and the Revenue have assailed the finding of Ld.CIT(A) in appeal and cross-objection respectively before this Tribunal. 6. Ground No.1 & 9 of Revenue's appeal are general in nature, need no separate adjudication. 7. Ground No.2 is against the deleting the addition of INR 58,09,780/- made on account of notional ALV in respect of unsold spaces/flats treating the same as income from house property. 8. At the time of hearing, Ld. Sr. Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee that since the property was vacant for the whole of the previous year, the annual letting value thereof shall be taken to be nil in view of section 23(1)(c), on the ground that since the properties were held by the assessee as stock in trade and not for the purpose of letting out, 'vacancy allowance' provided under section 23(1)(c) of the Act could not be claimed. The Court also rejected the contention of the assessee that subsection (5) inserted under section 23 of the Act, to provide for determination of notional ALV in case of real estate developers, had for the first time introduced the charge of notional ALV in cases where building etc. are held by such developer as stock-in-trade after the end of one year from the end of financial year in which the certificate of completion is obtained, was applicable from 01.04.2018 and thus, was no charge of notional ALV in cases where building/ flats etc. were held as stock-in-trade. It would, however, be pertinent to point out that the Supreme Court has admitted the Special Leave Petition filed by the assessee against the said decision of the High Court which is reported at 256 Taxman 294 (SC), which is pending disposa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke wood work, fixing of lights and taking electricity connection etc. It is pertinent to mention here that the electricity connection is being applied in the name of the owner who purchases the flat or commercial space from the assessee. The flats/commercial space lying in stock do not have any electricity connection and thus are not in habitable condition. [Refer, Shree Nirmal Commercial Ltd. v. CIT 193 ITR 694 (Bom.), Shyam Sunder Behl v. ADIT: 147 Taxman 1 (Amritsar)(Mag.), S.M. Chandrashekar v. ITO: 76 taxman.com 278 (Bang. Trib.), ACIT v. Dr. Amrit Lal Adlakha: (2006) 105 TTJ Asr. 271] It is further pertinent to point out that the properties at S. No. 13 and 14 (Refer pg. no. 26 of the PB) are merely farm lands on which no residential unit has been constructed, which are outside the purview of section 22 of the Act. It would be pertinent to point out that the aforesaid issue, whether any building was constructed on farm lands was set-aside by Delhi Bench of the Tribunal to the file of assessing officer for fresh examination in assessee's own case for assessment years 2004-05 to 2006-07 [Refer, Order dated 28.03.2017 of Delhi Bench of Tribunal (ITA No. ITA Nos. 3193/Del/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court therefore, the finding of Ld. CIT(A) cannot be sustained and same deserved to be reversed. Hence, the order of Ld.CIT(A) on the issue of taxability of vacant house property/ commercial space is hereby, set aside and the corresponding finding by the AO are sustained. Except the claim of the assessee that the properties mentioned at Sl.Nos.13 and 14 at page No.26 of Paper Book were merely farm lands and no house properties were constructed thereon, would be outside the purview of section 22 of the Act. However, the Ld.CIT(A) has deleted the impugned addition without giving specific finding regarding the properties being vacant farm land and there was no construction of house property by the assessee. Therefore, the issue of taxability of properties claimed as being vacant farm lands needs verification by the AO for ascertaining the correctness of the claim that no house/building was constructed on such lands. Thus the issue is hereby, restored to AO. If it is found true that during the relevant time, no house property/commercial space were constructed thereon. No addition would be called for. Thus, Ground No.2 of the Revenue's appeal is partly allowed, in the te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis on the ratio of each eligible projects. 13. On the other hand, Ld. Senior Counsel for the assessee, Shri Ajay Vohra opposed these submissions and submitted that the authorities below did not appreciated the facts in right perspective. He contended that AO failed to bring any defect into the separate accounts prepared by the Assessee for each project. Hence, the allocation made by the AO is arbitrary and unjustified. 14. Ld.Sr. Counsel for the assessee pointed out that by way of Ground Nos. 3 & 4, the Revenue has challenged against the part relief granted by the Ld.CIT(A) in respect of allocation of various expenses to the eligible projects. The AO allocated various expenses to the eligible projects in ratio of sales and consequently, proposed disallowance of deduction of INR 3,59,98,438/- in respect of all nine projects. But having considered that out of nine projects, he had already disallowed the entire claim of deduction in respect of three projects namely, Avantika Aakriti, Golf Link I and Golf Link II, by treating for not eligible for deduction, the AO restricted disallowance on the six projects only for an amount of INR 3,45,09,112/-. He submitted that Ld.CIT(A) follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had already allocated expenditure to the tune of INR 2,97,95,338/- to the respective housing projects and allocated the entire advertisement expenditure to various eligible projects in the ratio of sales of each project. On further appeal, the Ld.CIT(A) allowed relief qua allocation of advertisement expenditure to the extent of INR 2,97,95,338/-. Considering that such expenditure was debited to the cost of construction of respective projects, not warranting further allocation to the profit of eligible unit. With respect to remaining expenses, Ld.CIT(A) upheld the action of AO in treating the same, to be common expenditure, warranting allocation to eligible projects in sales ratio. However, ld.CIT(A) observed that since advertisement expenditure incurred during the relevant year was abnormally high vis-a-vis earlier year, Ld.CIT(A) took average advertisement expenses of Assessment Years 2005-06, 2006-07 and 2008-09, amounting to INR 38,22,503/- and allocated the same to the eligible projects in sales ratio. The contention of the assessee is that the assessee maintained separate books of accounts in respect of eligible projects and all the expenses, including advertisement exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the projects was higher than the investment made in such projects. 15.3. It was contended on behalf of the assessee that during the year under consideration, the assessee had incurred interest expenditure of INR 16,60,41,925/-. The assessee had maintained separate books of accounts in respect of eligible projects and thus, interest expenses of INR 8,20,91,514/-, having direct relation to such project(s) were already allocated/debited in the independent books. The balance interest cost of INR 8,39,50,411/- represent interest cost which was not directly identified to any project inasmuch as the same related to projects which were under conceptualization stage or were not identifiable or where the assessee expected abnormal delays in obtaining approval therefore, i.e. where the land acquisition was slow or projects were kept in abeyance due to certain legal/market related consideration. Such borrowing cost was shown as period cost under the head "interest expenses". It is contended on behalf of the assessee that the assessee company had claimed deduction u/s 80IB(10) of the Act in respect of nine projects eligible for deduction. Out of these nine projects, seven projects were alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in respect of the 3 eligible projects namely Avantika Aakriti, Golf link I and Golf Link-II, the AO restricted disallowance on the aforesaid ground to 6 projects only for an amount of Rs. 3,45,09,112/-. Eligible Project Sales Ratio (%) Particulars of expenses allocated to eligible projects in sales ratio Advertiseme nt & Publicity (Rs. 6,03,86,8 13) Interest expenses (Rs. 16,60,41,92 5) Professional Charges (Rs. 3,09,90,57 2) Directors's meeting fees (Rs. 9,65,00 0) Director's travelling expenses (Rs. 28,14,14 1) Total Avantika Aakriti Housing Project 0.19 % 1,14,735 3,15,480 58,880 1,830 5,850 4,96,775 Golf Link I Housing Project, Greater Noida, UP 0.24 1,44,928 3,98,500 74,377 2,316 6,750 6,26,871 Golf LinkII Housing Project, Gautam Budh Nagar, UP 0.14 84,540 2,32,460 43,390 1,350 3,940 3,65,680 Green Glade-II Housing Project, Gautam Budh Nagar, UP 0.23 1,38,890 3,81,890 71,278 2,220 6,470 6,00,758 Green Glade-I Housing Project, Greater Noida, UP 0.37 2,23,430 6,14,355 1,14,665 3,750 10,410 9,66,610 Nest Homes (Ahsiana) Group Housing Project, Lucknow 0.9 5,43,481 14,94,377 2,78,915 8,685 25,327 23,50,785 Whispering Meado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. ACIT: ITA. No: 3021/Ahd/2013. Similarly, the Courts in the following cases have held that unless the expenditure incurred on the R & D work relates to the undertaking/unit in question, the same cannot be apportioned to it on hypothetical basis: * Zandu Pharmaceuticals Works Limited v. CIT: 350 ITR 366 (Born.) * Bush Boake Allen (India) Ltd. v. CIT: 273 ITR 152 (Mad.) It is further submitted that all the impugned eligible projects were launched in earlier years which stood substantially sold out and were nearing completion during the year under consideration. The details of launch of the project and percentage of completion as at the end of the relevant assessment year are as under: S.No. Name of the eligible Project Year of lauch of the project (FY) Stage of completion of the project Relevant pg.no. of Form No.10CCB 1. Avantika akriti Housing Project 1997-98 100% 140 & 143 2. East End Loni Housing Project 2000-01 100% 151 & 155 3. Golf Link-I Housing Project 1997-98 100% 163 & 167 4. Green Glade I Housing Project 1997-98 100% 174 & 178 5. Golf Link-II Housing Project 1997-98 100% 186 & 190 6. Green Glade II Housing Project 2001-02 100% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,97,95,338/- considering that such expenditure was debited to cost of construction of respective projects, not warranting further allocation to the profit of eligible unit. With respect to remaining expenses, the CIT(A) upheld the action of the AO in treating the same to be common expenditure, warranting allocation to eligible projects in sales ratio. However, the CIT(A) observed that since advertisement expenditure incurred during the relevant year was abnormally high vis-a-vis earlier year due to advertisement placed for fund raising through Qualified Institutional Placement, the CIT(A) took average advertisement expense of assessment years 2005-06, 2006-07 and 2008-09, amounting to, Rs. 38,22,503/- and allocated the same to eligible projects in sales ratio. Submission It is submitted that the assessee maintains separate books of accounts in respect of eligible projects and all the expenses, including advertisement expenses, having direct relation to such project(s) were already allocated/debited in the independent books. During the year, the assessee had following projects, which were eligible for deduction under section 80- IB(10) of the Act. The details of said pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule-12 of the Balance Heet at pg. no. 15 of the PB). The balance borrowing cost of Rs. 8,39,50,411/- being not related to the projects was debited to the profit and loss account (Refer Schedule-14 of the Balance Heet at pg. no. 16 of the PB). The AO allocated entire interest expenditure of Rs. 16,60,41 ,925/- on pro rata basis in the ratio of sales against projects eligible for deduction under section 80IB(10) of the Act, and accordingly, reduced the deduction claimed by the assessee under that section by a sum of Rs. 2,27,97,559. The CIT(A) deleted the allocation of interest expenditure made by the AO holding that the assessee had not used borrowed funds for investment in such eligible projects and that most of the eligible projects were complete and/or were running in surplus i.e. internal accruals from the projects was higher than the investment made in such projects. Submission During the year under consideration, the assessee had incurred interest expenditure of Rs. 16,60,41 ,925/-. It is submitted that the assessee maintains separate books of accounts in respect of eligible projects and thus, interest expenses of Rs. 8,20,91,514/-, having direct relation to such pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest expenditure was made in respect of these projects in the initial /earlier years, and, therefore, opening investments in such projects stood accepted to be out of surplus/interest free funds. Reliance in this regard is placed on the following decisions wherein it has been held that where opening advance/investments have been accepted to be made out of interest free funds, no part of the interest-bearing borrowed funds can be attributed to such investments/advances: * Godrej & Boyce Manufacturing Company Ltd. v. DCIT: 394 ITR 449 (SC) * CIT v. Sridev Enterprises: 192 ITR 165 (Kar.) * CIT vs. Givo Ltd.: ITA No. 94112010 (Del.) * CIT v. Gujarat Narmada Valley Fertilizers Co. Ltd.: 221 Taxman 479 (Guj.) * Punjab Woolcombers Ltd. v. ACIT: (2004) 1 SOT 114 (Chand) * Meenakshi Synthetics vs CIT: 84 ITD 563 (Lucknow) * GR Agencies vs ITO; 79 TTJ 496 (Lucknow) In view of the above, it is respectfully submitted that there was no warrant to allocate any interest expenditure incurred by the Head Office to the eligible units since no part of interest-bearing funds were utilized for making investment or for undertaking regular operations in the eligible unit. It may be app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee) During the relevant year, the assessee company incurred an expenditure of Rs. 3,09,90,572/- towards legal and professional charges. The details of said expenditure is as under: (i) Legal and Professional Charges (IT, law matters) Rs. 9,90,200/- (ii) Legal & Professional Charges (Others) Rs. l ,95, 18,387/- (iii) Legal & Professional Charges (Retainers hip ) Rs. l,04,23,153/- (iv) Legal & Professional Charges (Architect Fee) Rs. 67,500/- Since the said expenditure was not related to projects eligible for deduction under section 8OIB ( 10) of the Act, the same were not allocated to the said projects. The AO, however, allocated the aforesaid expenses incurred on professional charges on pro-rata basis in the ratio of sales of each eligible project. The CIT(A), however, on analyzing the details of professional charges held that expenditure only to the extent of Rs. 1,04,23,153/- being retainership charges paid to various professionals for looking after legal cases of the company ought to be allocated to the eligible units. The Assessee as well as Revenue has challenged the aforesaid order of the CIT(A). Submission From perusal of the details of the professional c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion imposed on the assessee company under the Company Law and thus, the assessee has to conduct such meetings irrespective of whether the assessee is undertaking any projects eligible for deduction under section 80IB(1 0) of the Act. No issue, relating activities of the eligible project, was discussed in the said meetings. In view of above, allocation of Director's meeting fee expenses to the eligible projects is not warranted. Re (V) : Directors travelling expenses (Ground of appeal no. 3 of Departmental appeal) The AO allocated Rs. 28,14,141/- being the expenses incurred on foreign travelling to the projects eligible for deduction under section 80IB-(10) of Act. The details of foreign travelling expenses are placed at Pg. no. 270 of the PB. It is pertinent to note that the foreign travelling expenditure were mainly incurred for travel to Thailand which were in relation to non-eligible projects at Mumbai. On perusal of the details, the CIT(A) held that no allocation of the said expenses was warranted since the assessee was maintaining separate books of accounts and the eligible projects were not benefitted from the foreign visit of the directors. Re: Principle of consiste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Certificates of approval of projects by Appropriate Authority to substantiate commencement of projects before stipulated date. (b) Certificate of completion of projects by Appropriate Authority to substantiate completion of projects before stipulated date. (c) Statutory certificate by Chartered Accountant as prescribed. (d) Explanation regarding higher profitability at Rs. 12,88,63,163/- against sales in projects subject to deduction under section 80- IB(10) at Rs. 25,34,44,798/- and explanation why other income of Rs. 6,32,718/- included in such claim of deduction. (e) Explanation why loss of Rs. 18,37,161/- in East End and Rs. 27,03,645/- in Green Grade projects in assessment year 2006-07, be not set off in assessment year 2007-08 against profits computed under section 80IB(10). (f) Explanation why profits of projects of Avantika Akriti, Golf Link - I & II commenced prior to 1.10.1998, be not excluded from deduction under section 80-IB(10) of Income Tax Act 1961. (g) Why administrative and interest expenses in Profit and loss account of the assessee company in respect of all business activities as per tax audit report be not allocated to profits computed in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63/-. Further, disallowance of INR 15,00,000/- was made on adhoc basis towards infringement of prescribed conditions relating to flats constructed having area more than specified limit. Accordingly, the AO allowed deduction of INR 8,21,04,091/- u/s 80IB(10) of the Act and disallowed at INR 4,69,59,072/-. However, Ld.CIT(A) reduced the disallowance by observing that the assessee filed a chart showing capital work in progress on its ongoing projects. A sum of INR 2,97,95,338/- was incurred on "Advertisement and Publicity" was already allocated to different ongoing projects as shown in Schedule 12 of the balance sheet. He was of the view that expenditure on advertisement which has already been allocated to different projects cannot be reallocated. However, he considered that a sum of Rs. 38,22,503/- being average of advertisement expenses incurred during Assessment Years 2005- 06, 2006-07 and 2008-09 should be allocated on pro-rata basis in the sales ratio u/s 80IB(10) of the Act on eligible projects. In respect of "Interest on borrowed capital", the Ld.CIT(A) has given a finding that investment made u/s 80IB(10) of the Act was negative. Most of the projects eligible for deduction u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible projects which is duly supported by the audit report in Form No.10CCB. All direct and indirect expenditure having direct nexus with the eligible projects have already been added to the cost of the said project. It is contended that the expenditure which is not directly, attributable to the eligible projects ought not to be apportioned to that project while computing deduction available under the Act. In support of this contention, reliance was placed on following judicial pronouncements:- [i] CIT vs Mineral Enterprises Ltd. 310 CTR 612 (Kar.HC); [ii] CIT vs Hindustan Lever Ltd. 221 Taxman 71 (Bom.HC); and [iii] Transpek Silox Industry Ltd. in ITA no.3021/Ahd./2013. 20. It was further submitted that all the eligible projects in question were launched in earlier years which stood substantially sold out and were nearing completion during the year under appeal. Ld. Counsel for the assessee drew our attention to the status of the project and also summary of the eligible projects by pointing out to supplementary Paper Book pages No.314 to 329 to buttress the contention that the projects were sold out. It was further contended that since the projects stood substantially s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a finding that such fee related to meetings of the Directors and such meeting issues related to eligible projects would also be subject matter. The assessee has not furnished Minutes of Board meeting to support its contention that no agenda related to the eligible projects was discussed in these meetings. In the absence of such evidence, we do not see any merit in the contention of the assessee. Further, Ld. CIT(A) in respect of Director's travelling has given a finding that foreign travelling by the Directors was not related to any eligible projects. This finding is not rebutted by the Revenue by placing any contrary material on records. Therefore, we do not see any reason to interfere into the finding of Ld. CIT(A). Hence, the Ground Nos. 3 to 6 of appeal of Revenue against deletion of allocation of expenses to eligible project are dismissed. 21. Ground No.7 raised by the Revenue is against allowing setting off losses against profits of succeeding years. 22. Ld. Sr. DR for the Revenue supported the assessment order and submitted that the Ld.CIT(A) grossly erred in allowing the first setting off against the profits from other eligible projects and holding that balance if any nee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions v. DCIT: Tax Case (Appeal) No. 524 of 2008 (Mad.) * CIT vs Sh. Anil H. Lad: 45 taxmann.com 98 (Kar.) * CIT V. Mewar Oil & General Mills Ltd: 271 ITR 311 (Raj.) * ACIT v. Intex: 154 ITD 365 (Chennai) * DCIT v. ITC Ltd.: 154 ITD 136 (Kol.) In that view of the matter, losses of earlier years which had already been set off against other income in earlier years, could not be notionally set off again while computing current income admissible for deduction under section 80-IB(10) of the Act during the relevant year. In that view of the matter, the ground of appeal raised by the Department deserves to be dismissed." 24. We have heard the rival contentions and perused the material available on record. We find merit into the contention of Ld. Counsel for the assessee that losses of earlier years which had already been set off against other income in earlier years, could not be notionally set off again while computing current income admissible for deduction u/s 80IB(10) of the Act during relevant year. In the light of binding precedent cited by the Ld. Counsel for the assessee wherein it has been held that "loss if already absorbed against the profit of other eligible projec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the total income. The provisions of section 14A clearly postulates disallowance of expenditure only in a case where it is proved that the expenses incurred have a real relationship with the income which does not form part of the total income. In the absence of such nexus being established, it is not open to the assessing officer to disallow any part of the expenditure on proportionate basis. Reliance in this regard is placed on following decisions: - CIT vs. Walfort Share & Stock Brokers: 326 ITR 1 (SC) - Godrej & Boyce Mfg. Co. Ltd. v. CIT: 394 ITR 449 (SC) - Maxopp Investment Ltd. v. CIT: 402 ITR 640 (SC) affirming decision of the Delhi High Court in Maxopp Investment Ltd. vs. CIT: 347 ITR 272 (Del.) - CIT vs. Hero Cycles: 323 ITR 518 (P&H) - CIT v. Metalman Auto P. Ltd.: 336 ITR 434 (P&H) - CIT v. Reliance Utilities and Power Ltd.: 313 ITR 340 (Bom.) - CIT v. Torrent Power Ltd.: 363 ITR 474 (Guj). As regards old investment, it is respectfully submitted that such investment has been accepted to be made out of interest free funds inasmuch as no disallowance under section 14A of the Act was made in respect thereof in preceding assessment years. It is pertin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt Ltd. v. CIT: 381 ITR 107 (P&H) - PCIT v. Basti Sugar Mills Co. Ltd.: ITA No. 205 OF 2018 (Del HC) - PCIT v. Reebok India Company: [2018] 259 Taxman 100 (Delhi) Applying the aforesaid principle of investment, the Courts and various benches of the Tribunal have, in the following decisions, deleted disallowance made under section 14A of the Act: - CIT v. UTI Bank Ltd: 215 Taxman 8 (Guj.)[SLP dismissed vide order dated 07.02.2014 in Civil Appeal No. 468/2014 - CIT v. Max India Ltd: 388 ITR 81 (P&H) - H.T. Media Limited v. PCIT: 399 ITR 576 (Delhi) - HDFC Bank Ltd v. DCIT: 366 ITR 505 (Bom) - HDFC Bank Ltd v. DCIT: 383 ITR 529 (Bom) - CIT v. Abhishek Industries Ltd : 380 ITR 652 (P&H) - Lubi Submersibles Ltd.: ITA No.868 of 2010 (Guj.) - CIT Y. Gujarat Power Corporation Ltd. : 352 ITR 583 (Guj) - CIT v. Torrent Power Ltd.: 363 ITR 474 (Guj) In view of above, it is respectfully submitted that no part of interest expenditure can be disallowed under section 14A of the Act. It is also pertinent to point out that the assessing officer has not made any disallowance under section 14A of the Act in any preceding or succeeding assessment years. In that view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law in upholding the pro-rata allocation of Director's meeting fee to the profits of projects eligible for deduction under section 80IB(10) of the Act. The appellant company craves leave to add, amend, alter or vary from the aforesaid grounds of appeal at or before the time of hearing." 31. Ground No.1 of cross-objection is regarding allocation of expenses related to advertisement and publicity expenses. 32. Ld. Sr. Counsel appearing on behalf of the assessee reiterated the submissions made in written synopsis. He contended that Ld.CIT(A) erred in allocating the advertisement expenses, on average basis. 33. Per contra, Ld. Sr. DR for the Revenue opposed these submissions and relied on the finding of the AO on this issue. 34. We have considered the rival contentions of the parties and perused the material available on record. The issue regarding allocation of expenses related to advertisement and publicity expenses has been elaborately dealt in Revenue's appeal in ITA No.2731/Del/2010 (supra) wherein we have confirmed the finding of Ld. CIT(A). For the same reasoning, Ground No.1 raised by the assessee in this cross-objection is therefore, rejected. 35. Ground No.2 is against ..... X X X X Extracts X X X X X X X X Extracts X X X X
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