M/s. Housing Development & Infrastructure Limited Vs DCIT (ITAT Mumbai)
Assessing Officer denied the claim of the assessee being write off of unrealized cost of TDR observing that details have not been furnished and the assessee has not explained why the unabsorbed cost was not claimed in the original return and claimed in the revised return. The Assessing officer was also of the view that since the assessee disputed the termination of the contract by MIAL the expenditure debited to P&L account during this year is only a contingent liability and he was of the view that the expenditure is not allowable in the year under consideration but in the year in which the litigation between the assessee and the MIAL is settled. The Ld.CIT(A) also was of the same view and rejected the claim of the assessee.
We also observe that a detailed working of the unrealized cost of completed units and uncompleted units was furnished before the Assessing Officer which is at Page Nos.427 and 428 and the assessee has written off the cost in relation to the completed units out of completed units cost of ₹.98 crores out of the total cost of 709.49 crores.
Therefore, the contentions of the Lower Authorities that the details were not furnished and no explanation has been given appears to be not correct. The reason given by the Assessing Officer for denying the claim is that the expenditure is contingent. This also appears to be not correct for the reason that the assessee has already incurred the expenses in the books of accounts but only thing is the said expenditure was not charged to P&L account but was debited to work in progress account since the MIAL terminated the contract during this year.
