AWAS DEVELOPERS & CONSTRUCTION PVT. LTD.,MUMBAI vs. DCIT CENT. CIR. 5(4), MUMBAI

आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2015-16 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-53, Mumbai in appeal No.CIT(A)-53/IT-418/DCC-5(4)/2017-18 dated 16/05/2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/12/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle 5(4), Mumbai (hereinafter referred to as ld. AO).

M/s. Awas Developers & Construction P. Ltd.

as and when the occasion demands.

3. All the aforesaid grounds of appeal are independent, in the alternative and without prejudice to one another.

3. None appeared on behalf of the assessee. We have heard the ld. DR and perused the materials available on record. We find that assessee is a real estate developer and had filed its return for the A.Y.2015-16 on 29/09/2015 declaring total loss of Rs.93,240/-. The ld. AO during the course of assessment proceedings observed that assessee has not paid the outstanding interest payment of Rs.8,86,16,625/- to Punjab and Maharashtra Co-operative Bank on or before the due date of filing of return of income. Accordingly, the interest expenses of Rs.8,86,16,625/- debited to profit and loss account and its capitalisation to work in progress(WIP) was disallowed by the ld. AO u/s.43B of the Act in the assessment. We find that the assessee before the ld. CIT(A) had contended that provisions of Section 43B of the Act would apply only if interest was claimed as deduction while computing the income referred to Section 28 of the Act. It was further contended before the ld. CIT(A) that no expenditure was claimed in the profit and loss account but rather the same was capitalised to work in progress as on 31/03/2015. Accordingly, it was argued that provisions of Section 43B of the Act would not come into operation at all. We find that the ld. CIT(A) ignoring the aforesaid contentions of the assessee had observed in part 4.3 of the order that assessee had debited the sum of Rs.8,86,16,625/- in its profit and loss

M/s. Awas Developers & Construction P. Ltd. account towards finance cost and had also observed that the said interest expenditure had been capitalised and debited to work in progress. We find this matter requires factual verification by the ld. AO as there are contradictory findings on facts. Hence, we deem it fit and appropriate to remand this issue to the file of the ld. AO for de novo adjudication in accordance with law. Assessee is at liberty to furnish further evidences in support of its contentions. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

Order pronounced in the open court on this 15/01/2020