Case Law Details
Vipin Madanlal Thapar Vs DCIT (ITAT Mumbai)
The assessee was engaged in the business of real estate development. During the year under consideration the assessee was engaged in construction of development of building project named ‘Swaraj Crystal’ in Navi Mumbai. The project was completed in assessment year 2012-13 and assessee has declared a total profit of Rs.30,79,372/-. The addition of Rs.1,25,60,620/- in respect of purchases made from 5 parties as referred above were made by the A.O on the ground that sales tax department has treated these as bogus. The assessee submitted before the lower authorities that the said expense were capitalized in work in progress of Rs.3,44,85,729/- as on 31.03.2011. The assessee has also submitted the copies of ledger account of the 5 parties, copy of bank statement showing payment made by account payee cheques certificate from civil engineer and site engineer etc. and submitted that without disproving these material the A.O has made the addition on the basis of information displayed on the website of the sale tax department. After taking into consideration the above facts and material on record, it is observed that assessee has not claimed such expenses as revenue expenses during the year under consideration but same were capitalized as work in progress. Therefore, any disallowance it is made its amount to reduce work in progress, since, the expenses were capitalized in the work in progress. We have considered the judicial pronouncements referred by the ld. Counsel wherein it is held that since the expenses were shown by the assessee under the head work in progress and has not been reflected in the trading account, therefore, no addition can be made. In the light of the above facts and findings, we consider that decision of ld. CIT(A) in sustaining the impugned disallowance of expenditure made by the A.O is not justified.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal filed by the assessee is directed against the order passed the CIT(A)-11, Pune, dated 14.01.2022 for A.Y. 2011-12. The assessee has raised the following grounds before us:
“1. BECAUSE the CIT(A) has erred in law in upholding the assessment order even though the underlying order under section 127 of the Income Tax Act, 1961 is bad in law.
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