DCIT, Central Circle – 7(3), Mumbai v. National Standard India Ltd
[Citation -2019-LL-0924-69]
| Citation | 2019-LL-0924-69 |
|---|---|
| Appellant Name | DCIT, Central Circle – 7(3), Mumbai |
| Respondent Name | National Standard India Ltd. |
| Court | ITAT-Mumbai |
| Relevant Act | Income-tax |
| Date of Order | 24/09/2019 |
| Assessment Year | 2012-13 |
| Judgment | View Judgment |
| Keyword Tags | commercial expediency • wholly and exclusively for business purposes • compensatory payments • revenue expenditure • cancellation of contract • low tax effect • disallowance of compensation |
| Bot Summary: | The Revenue has raised the following grounds in its appeal: - 1(a). On the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the disallowance of.1,30,80,781/- made 2 ITA No. 4824/MUM/2017 M/s. National Standard India Ltd. by the Assessing Officer on the ground that the payment of the said amount to the customers/buyers in the cancelled project was justified by commercial expediency and was laid out wholly and exclusively for the purposes of the business of the assessee. On the facts and circumstances of the case and in law, the Ld CIT(A) failed to appreciate that the agreement with the customers/buyers in the cancelled project did not stipulate any payment of compensation. 1 On the facts and in the circumstances of the case and in law, the Ld.CIT(A) failed to appreciate that the assessee had cancelled the project 'Lodha Excellencia' and decided to come up with a new project by utilizing more FSI and increasing the saleable area and on that account the payment of compensation of Rs. 1,30,80,781/-could best be termed as capital outlay for a new project and hence, disallowable as revenue expenditure. At the time of hearing, Authorized Representative of the assessee submitted that tax effect on the issue in the present appeal is.40,41,961/- which is below. 142/2007-ITJ, the appeal of the Revenue is not maintainable. We have heard the submissions and perused the grounds of appeal in this appeal. |