CIT v. Lokhandwala Construction Inds. Ltd.

ACIT-CC-7(3), Mumbai vs. Macrotech Developers Private Limited, Mumbai

In the result, the sole ground of appeal raised by

Bench: Shri Pawan Singh & Shri Prabhash Shankar

…on facts and circumstances of the case and in law, the learned CIT(A) was right in deleting the disallowance of Rs 720,74,02,961/-relying upon the decision of the judgement of the jurisdictional High Court in the case of Lokhandwala Construction India Pvt Ltd.260 ITR 579 which was rendered before the proviso to Section 36(1)(iii) of the Act.? 8. Whether on the facts and circumstances of the case and in law, the learned CIT(A) is justified in deleting the disallowance of Rs.15,84,12,237/- made w/s.14A of the Act without considering the fact that restricting the disallowance to the extent of exempt income earned is…

Macrotech Developers Limited (Mdl), Mumbai vs. Deputy Commissioner of Income Tax Central Circle 7(3), Mumbai

In the result, the sole ground of appeal raised by

Bench: Shri Pawan Singh & Shri Prabhash Shankar(Physical Hearing) Macrotech Developers Limited (Mdl) Dcit, Central Range – 7(3), Room No. 655, 6Th Floor, 412, Floor-4, 17G Vardhaman Chamber, Vs Cawasji Patel Road, Horniman Circle, Aayakar Bhavan, Maharshi Fort, Mumbai – 400001. Karve Road, Mumbai-400020. [Pan No. Aaacl1490J] Appellant / Assessee Respondent / Revenue (Physical Hearing) Acit – Cc – 7(3), Mumbai Macrotech Developers Private Limited Room No. 655, 6Th Floor, Vs 412, Floor-4, 17G Vardhaman Chamber, Aayakar Bhavan, Maharshi Cawasji Patel Road, Horniman Circle, Fort, Karve Road, Mumbai-400020. Mumbai – 400020. [Pan No. Aaacl1490J] Appellant / Assessee Respondent / Revenue

…on facts and circumstances of the case and in law, the learned CIT(A) was right in deleting the disallowance of Rs 720,74,02,961/-relying upon the decision of the judgement of the jurisdictional High Court in the case of Lokhandwala Construction India Pvt Ltd.260 ITR 579 which was rendered before the proviso to Section 36(1)(iii) of the Act.? 8. Whether on the facts and circumstances of the case and in law, the learned CIT(A) is justified in deleting the disallowance of Rs. 15,84,12,237/- made w/s. 14A of the Act without considering the fact that restricting the disallowance to the extent of exempt income earned…

DCIT-2(3)(1), Mumbai vs. Nouveau Developers Private Limited, Mumbai

In the result, cross objection by the assessee is allowed for statistical purposes and appeal by Revenue is dismissed

Bench: Shri. Saktijit Dey, Hon’Ble & Shri. Girish Agrawalassessment Year: 2017-18 Deputy Commissioner Of Nouveau Developers Private Income-Tax-2(3)(1) Limited Mumbai. 702, Natraj, Mv Road, Junction, Vs. Western Express Highway, Andheri (East), Mumbai – 400069. (Pan: Aaccn5280G) (Appellant) (Respondent)

…d., [2003] 260 ITR 279 (Bom). Relevant paragraphs from this decision of Keystone Realtors (supra) is extracted below: "18. In this regard, it is relevant to note that the Hon'ble jurisdictional High Court in CIT vs Lokhandwala Constructions Inds. Ltd., (2003) 260 ITR 579 (Bom.), in case of a builder held that where the loan was obtained for the project of construction of flats, which is stock in trade, the assessee is entitled to deduction under section 36(1) (iii) of the Act in respect of interest expenditure on such loans. The Hon'ble Court further held that while adjudicating the claim of deduction under secti…

DCIT- 2(3)(1), Mumbai vs. Paranjape Schemes Construction Limited, Vile Parle East, Mumbai

In the result, appeal of the assessee is partly allowed for statistical purposes and the Revenue appeal is dismissed

Bench: SHRI AMIT SHUKLA (Judicial Member), SMT RENU JAUHRI (Accountant Member)

…therefore, the payments made through borrowing of NCDs the interest has to be allowed u/s.36(1)(iii). This issue stands covered by the judgment of the Hon’ble Jurisdictional High Court in the case of CIT vs. Lokhandwala Constructions Industries Limited (2003) 260 ITR 579 (Bom HC) which reads as under:- “4. From the facts found by the Tribunal on record, it is clear that assessee undertook two-fold activities. It bought and sold flats. Secondly, the assessee was also engaged in the business of construction of buildings. The profits from the both the activities were assessed under Section 28 of the Income-tax Act.…

Paranjape Schemes Construction Limited, Mumbai vs. Deputy Commissioner of Income Tax - 2(3)(1), Mumbai

In the result, appeal of the assessee is partly allowed for statistical purposes and the Revenue appeal is dismissed

Bench: SHRI AMIT SHUKLA (Judicial Member), SMT RENU JAUHRI (Accountant Member)

…therefore, the payments made through borrowing of NCDs the interest has to be allowed u/s.36(1)(iii). This issue stands covered by the judgment of the Hon’ble Jurisdictional High Court in the case of CIT vs. Lokhandwala Constructions Industries Limited (2003) 260 ITR 579 (Bom HC) which reads as under:- “4. From the facts found by the Tribunal on record, it is clear that assessee undertook two-fold activities. It bought and sold flats. Secondly, the assessee was also engaged in the business of construction of buildings. The profits from the both the activities were assessed under Section 28 of the Income-tax Act.…

Tata Chemicals Limited, Mumbai vs. PCIT-2, Mumbai

In the result, the appeal of the assessee is allowed

Bench: Shri Amarjit Singh & Shri Anikesh Banerjeeassessment Year: 2017-18 Tata Chemicals Limited Pcit-2, Mumbai

…ion of 6 Tata Chemicals Limited A.Y. 2017-18 share capital of the subsidiary to consolidate its overall business interest. Therefore, the DRP after following the decision of Core Health Care Ltd. (167 taxman 206) (SC) and Lokhandwala Construction Inds. Ltd. (260 ITR 579) Bombay High Court held that interest payment to be allowable u/s 36(1)(iii) of the Act. Similarly, in the A.Y. 2010-11 & 2011-12 the DRP has decided the issue in favour of the assessee. However, in the A.Y. 2012-13, the DRP on the basis of issue contested by the Revenue before the ITAT rejected the objection filed by the assessee on the ground o…

DCIT-CC-7(3), Aaykar Bhavan, Maharishi Karve Road, Mumbai, Maharashtra vs. Arihant Premises Private Limited, Mumbai

In the result, ground Nos

Bench: Shri Prashant Maharshi & Shri Anikesh Banerjeedcit-Cc-7(3), Vs Arihant Premises Private Limited Room No-655, Aayakar Bhavan, 412, Floor-4, Vardhaman Chamber Maharishi Karve Road, Cawasji Patel Road, Horniman Mumbai-400 020 Circle, Fort, Mumbai-400 001 Pan : Aaaca7260K Appellant Respondent

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI PRASHANT MAHARSHI, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER DCIT-CC-7(3), vs Arihant Premises Private Limited Room No-655, Aayakar Bhavan, 412, Floor-4, Vardhaman Chamber Maharishi Karve Road, Cawasji Patel Road, Horniman Mumbai-400 020 Circle, Fort, Mumbai-400 001 PAN : AAACA7260K APPELLANT RESPONDENT Assessee by : Shri Neeraj Sheth Respondent by : Shri Manoj Kumar Sinha (SRDR) Date of hearing : 11/07/2024 Date of pronouncement : 24/ 07/2024 O R D E R PER ANIKESH BANERJEE, J.M: The instant appeal of the revenue wa…

The Dy. Commissioner of Income Tax, Central Circle-6(4), Mumbai vs. M/S Tapir Construction Limited, Mumbai

In the result, appeal filed by the assessee is allowed in terms indicated hereinabove

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. Rifaur Rahman, Hon'Bledcit – Central Circle – 6(4) V. M/S. Tapir Constructions Limited Room No. 1925, 19Th Floor M-62 & 63, 1St Floor Air India Building Connaught Place Nariman Point, Mumbai - 400021 New Delhi – 110001, New Delhi Pan: Aaect9858L (Appellant) (Respondent)

…eduction. In any event, the very foundation of disallowance is special bench decision in the case of Wall Street Construction (supra) which stands reversed by Hon’ble jurisdictional High Court in the case of CIT Vs Lokhandwala Construction Industries Limited (260 ITR 579) which holds good even today. The proviso to Section 36(1)(iii) does not come into play in the present case as the residential units are part of the stock in trade, and not the capital assets. Respectfully following the views so expressed by the coordinate benches, we approve the detailed and well-reasoned approach adopted by the CIT(A) and decli…

Deputy Commissioner of Income Tax - Central Circle 2(4), Mumbai vs. Keystone Realtors Private Limited, Mumbai

In the result, appeal of the Revenue in ITA No

Bench: Shri Vikas Awasthy & Shri Gagan Goyalआअसं.1807/मुं/ 2022 एवं 1808/मुं/ 2022 ("न.व.2016-17 एवं 2017-18)

…received.” 4. Smt. Madhumalti Ghosh representing the Department submits that the CIT(A) while deciding ground No.1 and 2 of appeal has followed the decision of Hon'ble Jurisdictional High Court in the case of CIT vs. Lokhandwala Construction Industries Ltd., 260 ITR 579 (Bom). The assessment year relevant to the said case is assessment year 1987-88. The CIT(A) has failed to take into consideration a vital fact that the provisions of section 36(1)(iii) of the Income Tax Act, 1961 [in short ‘the Act’] were amended by the Finance Act, 2003 w.e.f. 01/04/2004. The proviso was inserted by way of amendment, whereby int…

Dy CIT CC 2(4), Mumbai vs. Keystone Realtors Pvt Ltd., Mumbai

In the result, appeal of the Revenue in ITA No

Bench: Shri Vikas Awasthy & Shri Gagan Goyalआअसं.1807/मुं/ 2022 एवं 1808/मुं/ 2022 ("न.व.2016-17 एवं 2017-18)

…received.” 4. Smt. Madhumalti Ghosh representing the Department submits that the CIT(A) while deciding ground No.1 and 2 of appeal has followed the decision of Hon'ble Jurisdictional High Court in the case of CIT vs. Lokhandwala Construction Industries Ltd., 260 ITR 579 (Bom). The assessment year relevant to the said case is assessment year 1987-88. The CIT(A) has failed to take into consideration a vital fact that the provisions of section 36(1)(iii) of the Income Tax Act, 1961 [in short ‘the Act’] were amended by the Finance Act, 2003 w.e.f. 01/04/2004. The proviso was inserted by way of amendment, whereby int…

ACIT -893) (1), Mumbai vs. M/S. Triple Securities Pvt. Ltd, Mumbai

…by the Assessing Officer. Thus, the interest expenditure was allowable as deduction under Section 36(1)(iii) of the Act. In this regard he relied upon the decision of the Hon‟ble Bombay High Court in the case of Lokhandwala Construction Industries Ltd. [2003] 260 ITR 579. He further submitted that Part Occupancy Certificate was issued to the Assessee in the Previous Year 2014-15 relevant to Assessment Year 2015-16 and therefore, all construction work-in-progress expenses were capitalized in the Financial Year 2014-15 and shown as closing finished goods inventory. The amount of interest incurred for the Assessment…

Dy Commissioner of Income Tax, CC-7(3), Mumbai vs. M/S Macrotech Developers Limited(Successor to Lodha Impression Real Estate Pvt Ltd, Mumbai

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

…f Dy.CIT Central Circle -7 (3) Vs. M/s Pallav Dwellers Pvt. Ltd [ITA No. 2147/MUM/2018, Assessment Year 2014-15, 20.02.2020]. In that case, following the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Lokandwala Construction Industries Ltd. [260 ITR 579], it was held by the Tribunal that when the project constructed by an assessee is its stock-in-trade and not a fixed asset of the assessee, the interest paid on loans obtained for stock-in-trade is an allowable deduction under Section 36(1)(iii) of the Act. The CIT(A) has, in effect, granted relief to the Appellant by following the above decision…

Keystone Realtors Pvt Ltd, Mumbai vs. Dy CIT CC 2(4), Mumbai

In the result, the appeal by the assessee is partly allowed for statistical purposes

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

…etails of parties from whom the loan was availed and projects as well as the purpose for which the loan was utilized. 18. In this regard, it is relevant to note that the Hon’ble jurisdictional High Court in CIT vs Lokhandwala Constructions Inds. Ltd., (2003) 260 ITR 579 (Bom.), in case of a builder held that where the loan was obtained for the project of construction of flats, which is stock in trade, the assessee is entitled to deduction under section 36(1)(iii) of the Act in respect of interest expenditure on such loans. The Hon’ble Court further held that while adjudicating the claim of deduction under sectio…

Keystone Realtors Pvt Ltd., Mumbai vs. Dy CIT CC 2(4), Mumbai

In the result, the appeal by the assessee is partly allowed for statistical purposes

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

…etails of parties from whom the loan was availed and projects as well as the purpose for which the loan was utilized. 18. In this regard, it is relevant to note that the Hon’ble jurisdictional High Court in CIT vs Lokhandwala Constructions Inds. Ltd., (2003) 260 ITR 579 (Bom.), in case of a builder held that where the loan was obtained for the project of construction of flats, which is stock in trade, the assessee is entitled to deduction under section 36(1)(iii) of the Act in respect of interest expenditure on such loans. The Hon’ble Court further held that while adjudicating the claim of deduction under sectio…

Keystone Realtors Pvt Ltd., Mumbai vs. DCIT, Central Circle-2(4), Mumbai

In the result, the appeal by the assessee is partly allowed for statistical purposes

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

…etails of parties from whom the loan was availed and projects as well as the purpose for which the loan was utilized. 18. In this regard, it is relevant to note that the Hon’ble jurisdictional High Court in CIT vs Lokhandwala Constructions Inds. Ltd., (2003) 260 ITR 579 (Bom.), in case of a builder held that where the loan was obtained for the project of construction of flats, which is stock in trade, the assessee is entitled to deduction under section 36(1)(iii) of the Act in respect of interest expenditure on such loans. The Hon’ble Court further held that while adjudicating the claim of deduction under sectio…

Keystone Realtors Private Limited, Mumbai vs. Deputy Commissioner of Income Tax - Central Circle 2(4), Mumbai

In the result, the appeal by the assessee is partly allowed for statistical purposes

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

…etails of parties from whom the loan was availed and projects as well as the purpose for which the loan was utilized. 18. In this regard, it is relevant to note that the Hon’ble jurisdictional High Court in CIT vs Lokhandwala Constructions Inds. Ltd., (2003) 260 ITR 579 (Bom.), in case of a builder held that where the loan was obtained for the project of construction of flats, which is stock in trade, the assessee is entitled to deduction under section 36(1)(iii) of the Act in respect of interest expenditure on such loans. The Hon’ble Court further held that while adjudicating the claim of deduction under sectio…