Value of TDR and the value of fully constructed industrial building can not stand on equal footing – ITAT Mumbai

This appeal preferred by the Revenue is directed against the order dated 1.2.2010 passed by the ld. CIT(A)-4 for the Assessment Year 2006-07-.2. The facts of the case in brief are that the assessee is engaged in construction activity. It has completed Phase I of a project at Malad comprising construction of  industrial galas called “Aditya Industrial Estate”. During the year  it  Commenced Phase II comprising of  additional galas in the same project. For Phase II it purchased TDR for Rs. 1,43,04,413 as under:

The TDR and other costs incurred aggregating Rs. 1,76,71,459 were reflected as capital work-in-progress in the Balance Sheet for the year ended 31-3-2006.

The assessee had obtained a term loan of Rs. 2 crores from the Small Industrial Development Bank of India (SIDBI) for construction of Phase II. The loan was secured against mortgage

of immovable properties. The mortgage deed was executed on 26.9.2005, and registered with the stamp authorities at Borivali. This transaction of mortgage was included in the AIR data by the Sub-Registrar.