DIVYANIDHI BUILDCON PRIVATE LIMITED,JAIPUR vs. DCIT CIRCLE 6, JAIPUR, JAIPUR

per the provisions of section 45(3) of the Income Tax Act.

Therefore, the income earned on account of transfer of the land

held as investment in the books of accounts of the assessee

company has been offered under the head 'Income from capital

gains' and there is no dispute on it. Apart from the above income,

there is no other income from any activity during the previous year,

13 ITA No. 616/JPR/2023 Divyanidhi Buildcon Pvt. Ltd. vs.ITO but the only expenses amounting to Rs. 32,10,282/- have been

claimed by the assessee, resulting in 'Loss from business' of Rs.

32,10,282/-, which has been set off against the capital gain of Rs.

3,00,60,152/-, earned from the transfer of the said land to the AOP

Baid Colonizers and Developers. The ld. AO vide letter dated

13.11.2019 directed the assessee to prove the allowability of the

various expenses debited to the profit and loss account. The

assessee filed a detailed reply but the reply of the assessee was

not accepted on the grounds that the assessee has not undertaken

any business activities regularly. Thus, in the absence of any

business activity the expenditure claimed by the assessee for an

amount of Rs. 32,10,282/- was added back as income of the

assessee. In the first appeal the ld. CIT(A) has out of the claim of

the assessee confirmed the disallowance of interest of Rs.

30,34,582/- paid by the assessee on unsecured loans. The

assessee before us submitted that when ld. CIT(A) allowed the

claim of employee expenses of Rs. 1,64,773/- and other expense

of Rs. 10,927/- there is no reason to disallow the interest expenses

of Rs. 30,33,892/- and Rs. 690/- being the amount incurred as

bank charges. The reasoning advanced by the ld. CIT(A) while

denying the claim of expenditure is that “Here the assessee has

14 ITA No. 616/JPR/2023 Divyanidhi Buildcon Pvt. Ltd. vs.ITO never started its own business since its corporation”, this reasons

is against the fact of case of the assessee. As it is evidently clear

that the assessee has purchased two chunk of land for one they

have entered into development with the AOP and on another they

have started laying the pipeline, marking the land and applied the

electric connection. This act of the assessee clearly proves that the

assessee has started business activity and therefore, the only

reasons advanced by the ld. CIT(A) is against the set of facts and

the denial of interest and bank charges to the assessee is against

the set of facts already on record. The various case laws cited by

the assessee before us and before the ld. CIT(A) is not disputed

and thus the same is considered. The ld. CIT(A) merely on the one

reasons not granted the deduction to the assessee by observing

that the assessee has never started its own business which is

against the fact as the assessee has purchase two chunk of land

one is sold and another is under development proves that the

assessee has started its business and therefore, we direct the ld.

AO to allow the claim of the assessee for an amount of Rs.

30,34,582/-.

In the result, the appeal filed by the assessee is allowed.

15 ITA No. 616/JPR/2023 Divyanidhi Buildcon Pvt. Ltd. vs.ITO Order pronounced in the open Court on 03/06/2024.

Sd/- Sd/-

¼ Mk0 ,l- lhrky{eh ½ ¼ jkBkSM+ deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judcial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 03/06/2024 *Santosh/ Ganesh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Divyanidhi Buildcon Pvt. Ltd., Jaipur. 1. 2. izR;FkhZ@ The Respondent- DCIT, circle-6, Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. xkMZ QkbZy@ Guard File { ITA No. 616/JPR/2023} 6. vkns'kkuqlkj@ By order

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