THE ACIT,GNR CIRCLE,, GANDHINAGAR vs. DAHEJ SEZ LTD., GANDHINAGAR

These four appeals filed by the Revenue are directed against the order of the Ld. CIT(A), Gandhinagar, Ahmedabad dated 17.02.2012, 24.01.2014,

Brief facts of the case are that the Assessee is a Govt Company registered under 617 of the Company Act 1956. Assessee co has filed its return of income on 30.09.2009 declaring total income nil. As per the Co. Act Assessee's co. statutory Audit were appointed by Comptroller of Accountant General (C & A G). Company Statutory auditor M/S M K Shah & Co. Ahmedabad was appointed. The statutory audit was carried out by M/S M K Shah on 28.05.2010 and thereafter the same was revised on 14.10.2010. Thus assessee co has filed the return of income on provisional accounts.

The assessee co has incurred loss of Rs 8426272/- and claimed FDR interest of Rs 7285883V- as income from other sources as per the account attached with the return of income. However the Assessing Officer added Rs 36638613/- as interest income worked out by Assessing Officer on accrual basis i.e on

Against the said order, assessee preferred first statutory appeal before the ld. CIT(A) who determined income of the assessee at Rs. 9290255/-. However, he also directed to verify the figures given by the assessee in its annexure to the order of the ld. CIT(A) wherein all the details pertaining to interest and lease charges were given.

Now, revenue has come before us and stating that ld. CIT(A) has erred in law and on facts to granting to relief to the assessee.

We have gone through the relevant record and impugned order. There are two issues before us. One is relating to allowing interest on unpaid lease charges of Rs. 73,42,902/- which have not crystallized during the year. In this case, ld. A.O. has taxed the interest income on FDRs on accrual basis, whereas the expenses claimed are not allowed on the ground that the same are not claimed by filing revised return and hence they are not ascertained liabilities and not crystallized during the year under consideration. Assessee’s contention is that revised return could not have been filed because the original return itself was

Respectfully following the aforesaid Jurisdictional High Court, we dismiss this ground of appeal.

Now we come to next ground relating to reducing lease income by Rs. 2,45,99,415/- without confirming the fact whether said income is offered for tax as per mercantile system followed by assessee in earlier year.

In this case, assessee’s contention is that expenses should also be allowed on accrual basis, just as the income is also being taxed on accrual basis. As we can see, assessee has worked out the expenses and income from 01/09/2006 i.e. the date from which the assessee got possession of land from GIDC. This indicates that the business of the assessee has already commenced from that date. Ld. A.R. submitted for assessment year 2009-10 wherein contention of the assessee was accepted by the A.O. and same is part of paper book at page nos. 236 & 237 and since assessee has following mercantile system and ld., A.O. has accepted similar contention for assessment year 2009-10 and ld. CIT(A) in this case directed the ld. A.O. to verify all the details which were filed by the assessee and ld. A.O. did not find any error in those details.

In the result, appeal filed by the Revenue is dismissed.

ITA No. 1020/Ahd/2014 for Assessment Year 2010-11. The revenue has taken following grounds of appeal: 1. The learned CIT(Appeals) has erred in law and on facts in allowing the interest on unpaid lease charges of Rs.280006990/- without appreciating that lease is for a period of 99 years and that the same is not allowable as revenue expenditure. 2. The learned CIT(Appeals) has erred in law and on facts in deleting the lease rent allowance of Rs.58714993/- without appreciating that TDS has not been deducted. 3. The learned CIT(Appeals) has erred in law and on facts in deleting the disallowance of Rs.58714993/- without appreciating that the same would not be allowable as revenue expenditure. 4. The learned CIT(Appeals) has erred in law in allowing the NA charges of Rs.8208000/- being the capital expenditure. 5. The learned CIT(Appeals) has erred in law and on facts in deleting the - disallowance of infrastructure up gradation charges of Rs.44070975/- by ignoring that the assessee has made such a claim before it had reached finality and that true income of a particular year has to be taxed in that year only. 6. On the facts and circumstances of the case the Ld.CIT(A) ought to have upheld the order of the Assessing Officer.

Since in connecting appeal in ITA No. 1046/Ahd/2012, we have dismissed the appeal of the revenue for similar ground. In parity with the said order, we dismiss this appeal of the Revenue.

In the result, appeal filed by the Revenue is dismissed.

Since in connecting appeal in ITA No. 1046/Ahd/2012, we have dismissed the appeal of the revenue for similar ground. In parity with the said order, we dismiss this appeal of the Revenue.

In the result, appeal filed by the Revenue is dismissed.

ITA No. 2353/Ahd/2015 for A.Y. 2012-13. The revenue has taken following grounds of appeal: i) The Ld.CIT(A) has erred in law & on facts in deleting the addition of Rs.6,61,70,442/- made by the A.O, on account of interest payable @ 10% p.a. on lease amount, The Ld.CIT(A) has erred in law & on facts in deleting the addition made of Rs.5,48,,49,770/- on account of amortization of lease amount as lease rent treating it as capital expenditure. iii) The Ld.CIT(A) has erred in law & on facts in deleting the addition of Rs.3,06,29,456/- made by the A.O.. on account of NA Charges. iv) On the facts and circumstances of the case, the Ld. Commissioner of Income- Tax(appeals) ought to have upheld the order of the Assessing Officer. v) It is, therefore prayed that the order of the Ld. Commissioner of Income- tax(Appeals) may be set aside and that of the Assessing Officer be restored.

In the result, appeals filed by the Revenue is dismissed.