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Showing contexts for: lodha develop in Lodha Developers Ltd(Formerly Known As ... vs Dcit Cen Cir 7(3), Mumbai on 12 May, 2022Matching Fragments
2. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the disallowance of Rs.23,96,276 being 50% of payment of marketing expenses paid to Lodha Developers UK Limited for lack of evidences.
3. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the disallowance of regularization charges Rs. 1,58,42,172 treating the same as penalty towards infringement of law.
4. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the disallowance of write off of non-refundable security deposit of Rs. 61,21,854 for electric connections as revenue expenditure."
7. With regard to Ground No. 1 which is in respect of disallowance of foreign exchange loss of ₹.13,10,46,670 treating the same as capital loss.
8. Brief facts relating to above grounds are, during the year, the Assessee invested in bonds of Lodha Developers International (Netherlands) B.V. During F.Y.2014-15, the bonds were redeemed incurring a loss of ₹.52.43 crores due to change in foreign exchange rate of Rupees to GBP. However, the foreign exchange loss for period ending 31 March 2014 of ₹.13,10,46,670 was booked on mark to market basis on 31 March 2014 and the balance ₹.37.2 crores of loss was booked in FY 2014-15 on redemption. The Assessing Officer held that the loss is neither allowed to be set off nor carried forward and he categorized it as a dead loss and disallowed the same. The Ld.CIT(A) relying on the decision of the Hon'ble SC in the case of M/s. Sutlej Cotton Mills (116 ITR 21) and the CBDT Instruction No. 3/2010 dated 26 March 2010 held that the assessee had invested in bonds which was clearly a capital asset and hence the loss incurred was a capital loss and thereby upheld the action of the Assessing Officer.
13. Coming to the Ground No.2 which is in respect of disallowance of ₹.23,96,276 being 50% of payment of marketing expenses paid to Lodha Developers UK Limited ("LD UK") for lack of evidence.
14. Brief facts relating to above ground are, during the year, assessee had made a payment of ₹.47,92,553 to Lodha Developers UK Limited towards selling and marketing. The Assessing Officer disallowed the expenses following the order of the Ld. ITSC of earlier years and on the ground that the assessee failed to substantiate its claim that actual work of selling and marketing was done by LD UK with any evidences, disallowed 50% of the total expenses on ad-hoc basis. The CIT(A) upheld the disallowance made by Assessing Officer.
"21. At the time of hearing, the Ld. AR submitted that the assessee company is engaged in the real estate constructions and the assessee has made some payments to Lodha Developers UK Ltd towards the selling and marketing services but the assessee could not substantiate fully with the details of claim of marketing and selling expenses. The A.O found that the total payments/ reimbursements aggregated to Rs.87,78,309/- and the assessee could submit only marketing agreement in the assessment proceedings and supporting evidences of claim were not produced. Finally, the A.O was not satisfied with the submissions and information and restricted the claim to the extent of 50% of the expenses being Rs. 43,89,154/-. On appeal, the CIT(A) has confirmed the addition and dismissed the ground of appeal. On further appeal before the Hon'ble Tribunal, the Ld. AR submitted that the assessee has appointed agents as per the agreement and there is increase in the revenue due to NRI customers investments in properties in India. The Ld. AR for the first time has filed the details of payments, marketing & selling expenses incurred by the Lodha Developers U K Ltd, sample invoices of marketing expenses incurred in UK, and statement of sale of properties in India to NRI customers in the F.Y.2012-13 and prayed for allowing the claim based on the substantial evidence filed. The Ld.DR submitted that the A.O. should be provided an opportunity to verify and examine the additional evidence filed by the assessee. Further on perusal of the assessment order, we find that the assessee could not substantiate the claim with proper evidences for various reasons. Accordingly, to meet the ends of justice and the principles of natural justice, we restore the disputed issue for limited purpose to the file of the Assessing officer to verify and examine the claim and grant the relief and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information and we allow this ground of appeal of the assessee for statistical purposes.