The Commissioner Of Income Tax – 19, Mumbai v. M/S.aditi Developers, Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.882 OF 2011 The Commissioner of Income Tax – 19, Mumbai..Appellant. Versus M/s.Aditi Developers, Mumbai..Respondent. Mr.Suresh Kumar for the appellant.Mr.Sanjiv M. Shah for the respondent. CORAM : J.P. Devadhar &K.K. Tated, JJ. P.C. : DATE : 13th September 2011 1.Whether the Income Tax Appellate Tribunal was justified in quashing the order passed by the Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961 is the question raised in this appeal. 2.The assessment year involved herein is AY 2006-07. 3.The assessee – firm is engaged in the business of construction of building and development. The assessee has been following project completion method. In the assessment year in question, the expenditure incurred by the assessee in the project was allowed by the assessing officer in his order passed under Section 143(3) of the Income Tax Act, 1961. The Commissioner of Income Tax was of the opinion that the provision for construction expenses for the year in question represented expenses that are likely to be incurred in the project during the previous year 2006-07 relevant to assessment year 2007-08 and being a contingent liability is not allowable in the assessment year in question. 5.The Income Tax Appellate Tribunal has recorded a finding of fact that during the course of assessment proceedings, the assessing officer had called for the details of the expenditure incurred by the assessee and on being satisfied that the expenditure was incurred in the year in question allowed the claim of the assessee. The Income Tax Appellate Tribunal following the decision of the Apex Court in the case of Calcutta Company Limited V/s. CIT reported in (1959) 37 ITR 1 (S.C.) confirmed the order passed by the assessing officer. The finding of fact recorded by the Income Tax Appellate Tribunal is that the Commissioner of Income Tax has not demonstrated that the assessment order is erroneous or prejudicial to the interest of the Revenue. 6.In these circumstances, the order of the Income Tax Appellate Tribunal in setting aside the order of the Commissioner of Income Tax passed under Section 263 of the Act cannot be faulted. Accordingly, the appeal is dismissed with no order as to costs. (J.P. Devadhar, J.)