DCIT Vs Savvy Infrastructure Pvt Ltd (ITAT Ahmedabad)
Project Loss Claim of Real Estate Developer Accepted – Business Expenditure Found Genuine- Ahmedabad ITAT Upholds CIT(A)’s Order
Savvy Infrastructure Pvt Ltd, a real estate developer, filed its return declaring income of ₹1,99,420/-. During scrutiny assessment u/s 143(3), AO noted that the Assessee had claimed a project loss of ₹1,21,93,308/- in respect of the Sierra Project, shown under “Other Expenses.” AO disallowed the claim & treated it as unexplained expenditure u/s 69C, observing that no proper supporting documents were filed during assessment.
On appeal, CIT(A) examined ledgers, vouchers & supporting records furnished by Assessee. After being satisfied that the loss was duly supported by evidence & had clear business nexus, CIT(A) deleted the addition.
Revenue challenged the CIT(A)’s decision, contending that (i) no documents were produced during assessment, (ii) only ₹20,05,468/- towards AMC payment was proved, & (iii) CIT(A) wrongly admitted additional evidence without remand.
Tribunal, after hearing both sides, upheld the order of CIT(A). It observed that the Paper Book contained a group summary of direct project expenses for FY 2015-16 along with explanation that the balance was incurred in FY 2016-17, collectively forming the claimed loss. These documents sufficiently established genuineness & business nexus of expenditure. Accordingly, ITAT declined to interfere with the well-reasoned CIT(A) order & dismissed Revenue’s appeal.
