The Commissioner Of Income Tax v. M/S. Quartet Developers Pvt. Ltd

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 39 OF 2014 THE COMMISSIONER OF INCOME TAX Versus M/S. QUARTET DEVELOPERS PVT. LTD. ... Appellant ... Respondent Mrs. Asha A. Desai, Advocate for the appellant. Mr. Ashwin D. Bhobe, Advocate for the respondent. -Coram:B. P. DHARMADHIKARI &A. S. GADKARI, JJ.-Date:15th September, 2014 P.C. Perused the order of assessment as also the order of CIT(Appeals). The assessment order has been set aside by CIT (Appeals)and this order of CIT is maintained by the ITAT. 2. The Assessment Officer only because of stipulation in the development agreement has disallowed certain expenditures. Thoseexpenditures are like brokerage commission expenses and openingbalance of work in progress in the Assessment Year 2005-2006 atRs.37,82,839/-. Thus, the total amount of Rs.40,07,839/- has beendisallowed. 3. CIT (Appeals) has rightly found that this disallowance is noton the basis of the facts available in para 7. It has been expresslyobserved that the Assessment Officer did not dispute the genuineness of payment of brokerage and commission and the opening W.I.P. Thebooks of accounts of Assessee has not been doubted. The onlyreason given by AO has been incorrect and CIT (Appeals ) hasfurther observed that the vendor was going to be the only confirmingparty. The remark in the assessment order is also found to beincorrect. The matter was taken to ITAT. After taking note of thefacts, the ITAT in para 6 has noted that the sale agreement with thedeveloper was in the financial year 1990-91 and the Assessee hassigned the agreement for allotment of plots in the said property withsix parties. The Assessee incurred the expenses of Rs.1,71,000/- forproviding the access to the said property and spent amount ofRs.2,14,447.80 for the construction/demarcation of the road from themain road to the boundary of the said property. It is also noted thatthe developer M/s Nagesh Mahalaxmi Ventures had offered toundertake as agreed to complete the overall internal developmentwork relating to sub-division of the property like obtaining necessaryapprovals from the Government Authorities and construction ofinternal roads. It is also noted that the Assessee has incurred hisexpenditure through banking channel after deduction of TDS andnecessary evidence has been produced. It has further found that asthe Assessee has incurred this expenditure, it has to be allowed. 4. It is apparent that the provision of access till the boundary ofplots appears to be the responsibility of the Assessee and furtherinternal development i.e. the lay out development appears to be the responsibility of the developer. 5. CIT (Appeals) as also ITAT have correctly found that when theexpenses are shown to be undertaken, the same must be allowed. The fact that the accounts of the Assessee support the expensesundertaken is not in dispute. The Assessment Officer had neverdoubted the correctness of the entries in the books of accounts. 6. In this situation, we find no substantial question of law arisingout of the order of ITAT dated 29.10.2013. The appeal is rejected. at* A. S. GADKARI, J. B. P. DHARMADHIKARI, J.