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Showing contexts for: Infrastructure Development in M/S Aditya Housing & Infrastructure ... vs Department Of Income Tax on 28 May, 2014Matching Fragments
This appeal by the Revenue is directed against the order of the CIT(A)-II, Hyderabad dated 28.3.2013.
2. The Revenue raised the ground the CIT(A) erred in deleting the disallowance made u/s. 40(a)(ia) of the Act at Rs.
16,05,80,987.
3. Brief facts of the case are that the assessee is a company engaged in the business of construction and sale of flats filed its return of income on 30.09.2009 admitting a total income of Rs. 59,68,667. The return was processed u/s 143(1) of IT Act, and the case was selected for scrutiny u/s 143(2) and the M/s. Aditya Housing & Infrastructure Development Corporation Pvt. Ltd.
M/s. Aditya Housing & Infrastructure Development Corporation Pvt. Ltd.
=========================== contractors amounting to Rs. 83,07,258 and disallowed the said amount of Rs. 83,07,258 u/s.40(a)(ia) of the Act.
4. On appeal, the CIT(A) observed that since the assessee has not debited the said amount to the Profit and Loss A/c., the provisions of section 40(a)(ia) cannot be invoked on the expenditure not debited to the Profit and Loss A/c. Further, he observed that as per the facts the assessee has incurred in all Rs. 1212, 47,48,985 as project expenditure up to 31.3.2009 as deductible expenditure at Rs. 23,38,41,519 i.e., 1.93% only and the balance of Rs. 1189,09,04,466 is treated as inventory (work-in-progress) under the head current assets.
M/s. Aditya Housing & Infrastructure Development Corporation Pvt. Ltd. =========================== Rs.
1. M/s. Vinamra Universal Interest Liability 15,36,78,432 Traders Pvt. Ltd.
M/s. Aditya Housing & Infrastructure Development Corporation Pvt. Ltd.
===========================
7. The learned DR submitted that though the assessee has not claimed this as an expenditure in the Profit and Loss A/c. and shown it as an inventory in the Balance Sheet it will have the deeming effect on the profit of the assessee. Being so, the disallowance should be made by taking into consideration all provisions of section 40(a)(ia) of the Act. Further, he relied on the judgement of Supreme Court in the case of Attar Singh Gurmukh Singh vs. ITO (191 ITR 667) (SC) wherein held that word "expenditure" has not been defined in the Act. It is a word of wide import. Section 40A(3) refers to the expenditure incurred by the assessee in respect of which payment is made.