SIROYA DEVELOPERS, MUMBAI Vs ITO 17(3)(3), MUMBAI

This appeal concerns Siroya Developers and their dispute with the Income Tax Officer (ITO) 17(3)(3) in Mumbai for the assessment year 2009-10. The core of the disagreement lies in how certain amounts were treated in the tax assessment. Specifically, Siroya Developers contested the classification of funds recovered from Omega Investment and Properties Pvt. Ltd. and interest received from a partner, arguing they should reduce construction costs or be part of business profits, rather than being taxed as 'Income from Other Sources'. The appeal also questioned the denial of a deduction under section 80IB(10).

IN THE INCOME TAX APPELLATE TRIBUNAL
“G” Bench, Mumbai

Before Shri S. Rifaur Rahman, Accountant Member
and Shri Ravish Sood, Judicial Member
ITA No.409/Mum/2017
(Assessment Year: 2009-10)

M/s Siroya Developers
101, Kingston Towers,
GD Ambekar Marg, Parel Tank
Road, Parel – East,
Mumbai – 400 033
(Appellant) 

Vs.

ITO-17(3)(3)[Previously assessed
with ACIT-31(3)],
Mumbai
PAN – AANFS1544G
(Respondent)

Appellant by: Shri B.V Jhaveri, A.R
Respondent by: Shri. Avaneesh Tiwari, D.R
Date of Hearing : 07.08.2020
Date of Pronouncement: 10.09.2020

O R D E R

PER RAVISH SOOD, JM

The present appeal filed by the assessee is directed against the order passed by the Principal Commissioner of Income Tax(Appeals)-28, Mumbai, dated 22.11.2016 for A.Y.2009-10, which in turn arises from the assessment order passed by the A.O u/s 143(3) r.w.s 263 of the Income-tax Act, 1961 (for short “Act”), dated 30.03.2015. The assessee has assailed the impugned order on the following grounds of appeal before us:

“1). On the facts and the circumstances of the case and in law, the learned CIT(A) erred in assessing the appellant ant an income of Rs. 2,05,29,283/-.

2). On the facts and the circumstances of the case and in law, the learned CIT(A) erred inassessing item of income which are not part of the order u/s 263 of the Act. The CIT(A) cannot make an addition on the points on which were not directed in the order passed by the Commissioner of Income-tax u/s 263 of the Act.

3). On the facts and the circumstances of the case and in law, the learned CIT(A) erred in treating amount of Rs. 2,01,22,773/- recovered from Omega Investment and Properties Pvt. Ltd. as a income from Other Sources instead of reducing from the cost of construction of the project. The CIT(A) wrongly confirmed the said amount as “Income from other sources”.

4). On the facts and the circumstances of the case and in law, the learned CIT(A) erred in not considering the matching concept of accounting thereby reducing the amount received from the expenditure incurred. The appellant submits that the expenditure incurred for which amount received from Omega Investment and Properties Pvt. Ltd. has to be adjusted against each other since the expenses as well as amount received from the Omega Investment and Properties Pvt. Ltd. were for project.

5). Without prejudice to above, the CIT(A) ought to have allowed necessary effect by way of adjustment in closing stock.

6). On the facts and the circumstances of the case and in law, the learned CIT(A) erred in not allowing deduction u/s 80IB(10) on the said income of Rs. 2,01,22,733/-.

7). On the facts and the circumstances of the case and in law, the learned CIT(A) erred in confirming treatment of Interest received from a partner of Rs. 53,73,413/- as “Income from Other Sources” instead of a part of the receipt under the head “Profits & Gains from Business”.

8). On the facts and the circumstances of the case and in law, the learned CIT(A) erred in not allowing set off of the expenditure incurred in respect of interest paid against the interest income from the partner.

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