Compensation for Delayed Flat Handover Deductible as Work-in-Progress

Jayant Hari Mulay Vs DCIT (ITAT Pune) Introduction: The Income Tax Appellate Tribunal (ITAT) Pune’s recent ruling in the case of Jayant Hari Mulay vs Deputy Commissioner of Income Tax (DCIT) brings clarity to the tax treatment of compensation paid to landlords for delayed possession of constructed flats. The decision centered around the applicability of such compensation as a deductible expense under work-in-progress. Analysis: The appellant, Jayant Hari Mulay, is a promoter and builder who faced delays in completing a construction project. The delay led to a compensation payout of Rs. 3...