M/s. Bunty Housing, v. ACIT Cir 4,

CO 31/PUN/2010 | misc
Pronouncement Date: 29-10-2010 | Result: Dismissed

Appeal Details

RSA Number 3124523 RSA 2010
Assessee PAN INMAY2003A
Bench Pune
Appeal Number CO 31/PUN/2010
Duration Of Justice 1 month(s)
Appellant M/s. Bunty Housing,
Respondent ACIT Cir 4,
Appeal Type Cross Objection
Pronouncement Date 29-10-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 29-10-2010
Assessment Year misc
Appeal Filed On 29-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C.SUDHIR JM AND SHRI RAMAKOTAIAH A M I.T.A. NO. 713/PN/20 09 (ASSTT. YE AR : 2005-06 ) ASSTT. COMMISSIONER OF INCOME TAX APPELLANT CIRCLE-4 PUNE VS. M/S. BUNTY HOUSING RESPONDENT S NO 63/4 PIMPLE GURAV PUNE 411 027 C.O. NO. 31/PN/2010 (ARISING FROM I.T.A. NO. 713/PN /2009) (ASSTT. YEAR : 2005-06 ) M/S. BUNTY HOUSING CROSS OBJECTOR RESPONDENT S NO 63/4 PIMPLE GURAV PUNE 411 027 V/S. ASSTT. COMMISSIONER OF INCOME TAX RESPONDENT CIRCLE-4 PUNE DEPARTMENT BY : SMT. MANJU AJWANI ASSESSEE BY : SHRI SUNIL NONE ORDER PER I.C. SUDHIR JM THE REVENUE HAS QUESTIONED THE FIRST APPELLATE ORD ER ON SEVERAL GROUNDS INVOLVING AN ISSUE AS TO WHETHER THE LD CIT(A) IS J USTIFIED IN HOLDING THAT THE PROFITS OF ASSESSEES BUSINESS AMOUNTING TO RS. 75 00 000/- ADMITTED BY THE ASSESSEE DURING SURVEY U/S. 133A IS NOT TAXABLE IN A.Y. 2005 -06 SINCE THE ASSESSEE IS FOLLOWING PROJECT COMPLETION METHOD. 2. IN SUPPORT OF THE GROUNDS THE LD. D.R. HAS BASI CALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. SHE SUBMITTED THAT LD CIT(A) HAS FAILED TO APPRECIATE THAT SINCE NONE OF THE FLATS/SHOPS WERE COMPLETED IN THE A.Y. 2004-05 THEREFORE NO REVENUE ITA NO. 713/PN/2009 & C.O. 31/PN/2010 M/S. BUNTY HOUSING (A.Y. 2005-06) 2 COULD BE RECOGNIZED DURING THAT YEAR. IN THE A.Y. 2006-07 THE ASSESSEE DID NOT OFFER ANY INCOME TO TAX BUT DETERMINED FROM THE SA ME ACCOUNT PROFITS OF RS. 1.98 CRORES AND CREDITED THE PARTNERS ACCOUNT WITH THE SHARE OF PROFIT WHICH CLEARLY SHOW THAT THE ASSESSEE ITSELF IF NOT FOLLOWING THE ALLEG ED METHOD OF REVENUE RECOGNITION HENCE CANNOT CLAIM THAT THE PROFITS CANNOT BE WOR KED OUT AFTER INCURRING THE ENTIRE EXPENDITURE AND RECEIVING ENTIRE CONSIDERATION IN R ESPECT OF 3 BUILDINGS AND 6 SHOPS. 3. THE LD. A.R ON THE OTHER HAND TRIED TO JUSTIFY THE FIRST APPELLATE ORDER WITH THIS SUBMISSION THAT IN THE A.Y. 2006-07 THE A.O H IMSELF HAS ACCEPTED PROJECT COMPLETION METHOD CONSISTENTLY FOLLOWED BY THE ASSE SSEE. IN SUPPORT HE REFERRED PAGE NUMBERS 39 TO 53 OF THE PAPER BOOK I.E. COPIES OF ASSESSMENT ORDER FOR THE A.Y. 2006-07 FRAMED U/S. 143(3) ACKNOWLEDGEMENT OF HAVING FILED RETURN OF INCOME FOR A.Y. 2008-09 ALONG WITH COPY OF STATEMENTS OF INCOME AND PROFIT & LOSS ACCOUNT BALANCE SHEET WITH RELEVANT ANNEXURES. THE LD. A.R. ALSO PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CA SE OF BILAHARI INVESTMENTS PVT LTD. (299ITR 1)(SC) AND OF THE PUNE BENCH OF THE T RIBUNAL IN THE CASE OF THAKKAR DEVELOPERS (2008) (115 TTJ 841). 4. HAVING GONE THROUGH THE ORDERS OF THE LOWER AUTH ORITIES WE FIND THAT THE ASSESSEE FIRM ENGAGED IN THE BUSINESS OF REAL ESTAT E PROMOTERS AND BUILDERS HAS CLAIMED TO HAVE FOLLOWED THE PROJECT COMPLETION MET HOD. THE A.O. DID NOT AGREE WITH THE SAME AND ESTIMATED INCOME AT RS. 75 00 000 /- COMPUTED ON THE BOOKING AMOUNTS RECEIVED IN RESPECT OF SOME OF THE FLATS/SH OPS OF PARTICULAR BUILDINGS. THE A.O. WORKED OUT THE INCOME OF RS. 75 00 000/- BY WA Y OF REVERSE CALCULATION AND ADOPTING 17% OF G.P. RATE ON THE BOOKING AMOUNT OF RS. 443.4 LAKHS. THE A.O NOTED THAT DURING SURVEY U/S. 133A THE PARTNER OF THE FIRM STATED THAT OUT OF 175 FLATS AND 61 SHOPS ENVISAGED IN THE PROJECT BUILD ING C D AND E WERE ALMOST ITA NO. 713/PN/2009 & C.O. 31/PN/2010 M/S. BUNTY HOUSING (A.Y. 2005-06) 3 COMPLETE .E. BRICK WORK PLASTER AND DOOR FRAMES HA VE BEEN PUT WHEREAS THE 6 TH FLOOR CONSTRUCTION WAS IN PROGRESS. IT WAS ALSO ME NTIONED THAT POSSESSION OF THESE FLATS IN THIS BUILDING WAS EXPECTED TO BE GIVEN IN DECEMBER 2004. THE PARTNER OF THE FIRM WAS THEREFORE REQUESTED TO WORK OUT THE TENTATIVE PROFIT & LOSS ACCOUNT IN RESPONSE TO WHICH HE STATED THAT THE ESTIMATED INC OME ON THE LIKELY SALE OF THE FLATS DURING THE YEAR IN THE THREE BUILDINGS C D AND E A ND 30 SHOPS BEFORE SALARY AND INTEREST TO PARTNERS WOULD BE AROUND RS. 75 00 000 /-. BASED ON THE STATEMENT OF ONE OF THE PARTNERS DURING THE SURVEY THE A.O PROC EEDED TO ESTIMATE ABOVE STATED INCOME OF THE YEAR. DURING THE ASSESSMENT PROCEEDI NGS THE ASSESSEE HAD STATED THAT THE FIRM FOLLOWED PROJECT COMPLETION METHOD FO R RECOGNITION OF REVENUE. THE PRESENT MAYUR NAGARI PROJECT PHASE-I AND PHASE-II COMMENCED IN MAY 2003 AND WAS NOT COMPLETE AS ON 31.3.2005 AND THEREFORE THE WORK WAS SHOWN AS WORK-IN- PROGRESS AS ON 31.3.2005 AND NO REVENUE COULD BE RE COGNIZED DURING THIS YEAR. IT WAS ALSO STATED THAT THE PROJECT WAS ELIGIBLE FOR D EDUCTION U/S. 80 IB(10) OF THE ACT FOR WHICH COMPLETION CERTIFICATE WAS REQUIRED AS P ER THE CONDITIONS LAID DOWN IN THAT SECTION WHICH WAS NOT RECEIVED DURING THE YEAR UN DER CONSIDERATION SINCE THE HOUSING PROJECT WAS NOT COMPLETE AS A WHOLE. THE A SSESSEE FURTHER STATED BEFORE THE A.O THAT THE PROJECT WAS NOT EVEN 60% COMPLETE AND THE CONSTRUCTION WAS GOING ON EVEN IN THREE BUILDINGS C D AND E DURIN G THIS YEAR. THE A.O REJECTED THIS CONTENTION STATING THAT IN BUILDING C OUT OF 24 FLA TS POSSESSION OF 15 FLATS HAD BEEN HANDED OVER IN BUILDING D 24 OUT OF 30 FLATS AND IN BUILDING E 20 OUT OF 24 FLATS WERE HANDED OVER UPTO 31.3.2005. TAKING THESE 3 BU ILDINGS OUT OF THE TOTAL 7 BUILDINGS THE A.O STATED THAT POSSESSION OF 76% OF THE FLATS WAS ALREADY GIVEN IN ADDITION TO 6 SHOPS THEREFORE TAKING INTO CONSIDE RATION THE TOTAL BOOKING AMOUNT OF THESE PARTICULAR FLATS AND SHOPS AMOUNTING TO RS.4 43.4 LAKHS THE A.O ESTIMATED PROFIT AT 17% TO ARRIVE AT THE FIGURE OF AROUND RS . 75 LAKHS. ITA NO. 713/PN/2009 & C.O. 31/PN/2010 M/S. BUNTY HOUSING (A.Y. 2005-06) 4 5. THE ABOVE ACTION WAS OBJECTED BEFORE THE LD CIT( A) WITH DETAILED SUBMISSION REPRODUCED BY THE LD CIT(A) IN PARA NO. 3.2 AND 3.3 OF THE FIRST APPELLATE ORDER. 6. THE LD CIT(A) AFTER DISCUSSING THE ISSUE IN DET AIL HAS COME TO THE FOLLOWING CONCLUSION IN PARA NOS. 3.4 3.5 AND 3.6 OF THE FIR ST APPELLATE ORDER : 3.4 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT. IT IS A MATTER OF RECORD THAT THE APPELLANT WAS FOLLOWING THE PROJECT COMPLETION METHOD OF ACCOUNTING. THIS PARTICULAR PROJECT STARTED DURING THE ASSESSMENT YEAR 2004-2005 AND IN THE RETURN OF THIS ASSESSMENT YEAR IN THE AUDITORS REPORT UNDER THE HEAD SIGNIFICANT ACCOUNTING POLICIES IT HAS BEEN MENTIONED THAT THE ASSESSEE FOLLOWS THE PRINCIPLE OF REVENUE RECOG NITION AT THE TIME OF COMPLETION OF THE PROJECT. SIMILAR IS THE CASE WI TH THE AUDIT REPORTS FOR ASSESSMENT YEAR 2005-2006 AND SUBSEQUENTLY. IT WAS ALSO CLARIFIED THAT THE APPELLANTS PROJECT WAS ELIGIBLE FOR DEDUCTION U/S. 80IB(10) IN WHICH ONE OF THE CONDITIONS MENTIONED WAS THAT THE HOUSING PROJE CT SHOULD BE COMPLETED BEFORE 31 ST MARCH 2008 IN ACCORDANCE WITH THE COMPLETION CERT IFICATE ISSUED BY THE LOCAL AUTHORITIES WHEN IT HAS COMMENCED PRI OR TO 01-04-2004. IN APPELLANTS CASE IT IS STATED THAT THE PROJECT WAS FINALLY COMPLETED VIDE COMPLETION CERTIFICATE DATED 27-03-2008 AND THEREF ORE REVENUE WAS RECOGNIZED AND DEDUCTION U/S 80IB(10) CLAIMED IN AS SESSMENT YEAR 2008- 2009. IN RESPECT OF METHOD OF ACCOUNTING WHICH WA S REGULARLY EMPLOYED BY THE APPELLANT THE APPELLANT HAS ALSO RELIED ON THE DECISION OF THE HONBLE SUPREME COURT REPORTED IN THE CASE OF BILAHARI INVE STMENTS P. LTD. (2008) 299 ITR 1 AND ITAT PUNE BENCH IN THE CASE OF THAKA R DEVELOPERS (2008) 115 TTJ 841 (PUNE). 3.5 SO FAR AS DEDUCTION U/S 80IB(10) IS CONCERNED THE APPELLANT HAS MADE A CLAIM BEFORE THE ASSESSING OFFICER ALSO THAT IN C ASE PROFIT WAS BEING ESTIMATED ON PART OF THE FLATS WHICH WERE COMPLETED DEDUCTION U/S 80IB(10) SHOULD BE ALLOWED ON THIS PART OF ESTIMATED PROFIT SINCE THE PROJECT WAS ELIGIBLE FOR THIS DEDUCTION. THIS CLAIM WAS REJECT ED BY THE ASSESSING OFFICER MENTIONING THAT THERE WAS NO SUCH CLAIM IN THE RETU RN AND NO AUDIT REPORT IN FORM NO. 10CCB. IN VIEW OF THIS ESTIMATION OF PROF IT ON PART OF THE FLATS/SHOPS DURING THE YEAR THE APPELLANT HAS A CA SE THAT DEDUCTION U/S 80IB(10) SHOULD BE CONSIDERED SINCE IT WAS AN ELIGI BLE PROJECT. FURTHER ITA NO. 713/PN/2009 & C.O. 31/PN/2010 M/S. BUNTY HOUSING (A.Y. 2005-06) 5 TECHNICALLY THE ASSESSING OFFICER IS CORRECT THAT T HERE WAS NO SUCH CLAIM MADE IN THE RETURN AS THERE WAS NO CORRESPONDING AUDIT REPORT. BUT HOW COULD THERE HAVE BEEN ANY CLAIM IN THE RETURN WHEN THE AP PELLANT HAS BEEN FOLLOWING THE PROJECT COMPLETION METHOD AND THE RE VENUE HAS BEEN RECOGNIZED AND DEDUCTION U/S 80IB(10) CLAIMED ONLY AFTER COMPLETION CERTIFICATE DATED 27-03-2008 FOR THE COMPLETE PROJE CT HAS BEEN OBTAINED BY IT WHICH IS A NECESSARY CONDITION FOR DEDUCTION U/S 80 IB(10). INFACT THE ASSESSEE HAS ALSO RAISED THIS ISSUE IN THE APPEAL V IDE GROUND NO.5 WHICH IS WITHOUT PREJUDICE TO GROUND NOS. 1 TO 4. 3.6 AFTER CONSIDERING THE EXPLANATION OF THE APPELL ANT MENTIONED ABOVE AS ALSO THE FACTS ON RECORD IT IS HELD THAT THE PROJE CT COMPLETION METHOD FOLLOWED BY THE APPELLANT WHICH IS A RECOGNIZED ME THOD IN SUCH CASES HAS TO BE CONSIDERED FOR RECOGNITION OF REVENUE AND AS SUC H THIS ESTIMATION OF INCOME AT RS. 75 LAKHS COMPUTED ON THE BOOKING AMOU NTS RECEIVED IN RESPECT OF SOME OF THE FLATS/SHOPS OF PARTICULAR BUILDINGS CANNOT BE SUSTAINED AND IS HEREBY DELETED. THE WORKING OF THIS AMOUNT OF RS. 75 LAKHS HAS ALSO BEEN MADE BY WAY OF REVERSE CALCULATION AND THERE IS NO BASIS OF ADOPTION OF 17% RATE OF PROFIT. GROUND NOS. 1 TO 3 ARE THEREFORE ALLOWED. SO FAR AS GROUND NO.4 IS CONCERNED IT BECOMES INFRUCTUOUS SINCE GRO UND NOS. 1 TO 3 ARE ALLOWED AND THERE IS NO NEED FOR SEPARATE ADJUDICAT ION ON THE SAME. 7. THE LD CIT(A) HAS ALSO COMMENTED UPON THE AMOUNT OF INTEREST OF RS.8 42 179/- AND ADVERTISEMENT EXPENSES OF RS.7 59 842/- DEBITED TO THE PROFIT & LOSS ACCOUNT AND CHARGED TO REVENUE DURING THE YEAR RESULTING IN LOSS OF RS.15 99 183/- SHOWN IN THE COMPUTATION OF INCOME F OR THE YEAR. LD CIT(A) HAS OBSERVED THAT ON THE OTHER HAND THE PROJECT COMPL ETION METHOD ENVISAGED THAT SUCH EXPENSES WHICH ARE RELATED TO THIS PROJECT SH OULD BE CAPITALIZED TO THIS RESPECTIVE PROJECT ACCOUNT AND CLAIMED AS REVENUE E XPENSES ONLY IN THE YEAR WHEN THE REVENUE IS ULTIMATELY RECOGNIZED. IN THIS REGA RD HE REFERRED DECISION OF THE SPECIAL BENCH OF TRIBUNAL (MUMBAI) IN THE CASE OF W ALL STREET CONSTRUCTION LTD. (2006) 101 ITD 156 (SB) ACCORDING TO WHICH THE AS SESSEE WAS FOLLOWING A PROJECT COMPLETION METHOD OF ACCOUNTING INTEREST IDENTIFIA BLE WITH THAT PROJECT SHOULD BE ITA NO. 713/PN/2009 & C.O. 31/PN/2010 M/S. BUNTY HOUSING (A.Y. 2005-06) 6 ALLOWED ONLY IN THE YEAR WHEN THE PROJECT IS COMPLE TED AND INCOME FROM THE PROJECT IS OFFERED FOR TAXATION AND IT CANNOT BE ALLOWED ON YEAR TO YEAR BASIS. THE LD CIT(A) ACCORDINGLY AFFORDED OPPORTUNITY TO THE ASSESSEE TO EXPLAIN AND JUSTIFY AS TO WHY THE CLAIM OF EXPENSES ON ADVERTISEMENT AND INTEREST AS REVENUE EXPENSES WAS MADE TO THIS YEAR WHEREAS THE PROJECT COMPLETION METHOD WAS BEING FOLLOWED. IN RESPONSE THE ASSESSEE FURNISHED EXPLANATION. CONSIDERING TH E SAME THE LD CIT(A) FOLLOWING THE DECISION OF SPECIAL BENCH MUMBAI IN THE CASE OF WALL STREET CONSTRUCTION LTD. (SUPRA) CAME TO CONCLUSION THAT INTEREST EXPENDITUR E PERTAINING TO PARTICULAR PROJECTS WAS TO BE ADDED TO THE WORK-IN-PROGRESS WHEN THE PR OJECT COMPLETION METHOD WAS BEING FOLLOWED. THE LD CIT(A) HAS ALSO MADE FOLLOW ING RELEVANT OBSERVATIONS ON THE ISSUE IN PARA NO. 3.9 AND 3.10 OF THE FIRST APPELLA TE ORDER : 3.9 ON THE OTHER HAND IN THIS CASE THERE IS NO IN CONSISTENCY AND THE ENTIRE INTEREST AMOUNT IS TO BE CAPITALISED AND TREATED A S PART OF WORK-IN-PROGRESS IN THIS YEAR IT BEING NOT A CASE OF MULTIPLE PROJE CTS. IT IS NOTICED THAT THE APPELLANT HAS STARTED THE MAYUR NAGARI PROJECT DURI NG THE ASSESSMENT YEAR 2004-2005 AND THIS PROJECT HAS BEEN DIVIDED INTO TW O PARTS MAYUR NAGARI PHASE-I AND PHASE-II BY THE APPELLANT. THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FLED WITH THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004- 2005 SHOWS THAT THE APPELLANT HAS PREPARED WORKS AC COUNT SEPARATELY FOR MAYUR NAGARI PHASE-I (S.NO.63/4) PHASE II (S.NO. 6 3/3/1). IN THE WORKS ACCOUNT FOR MAYUR NAGARI PHASE-I THE ENTIRE INTERES T EXPENSES OF RS.5 04 140/- AND ADVERTISEMENT EXPENSES OF RS.6 59 267/- HAS BEEN DEBITED AND NOTHING HAS BEEN DEBITED TO THE WORKS ACCOUNT OF MAYUR NAGARI PHASE- II. HOWEVER IN ASSESSMENT YEAR 2005-2006 THE APP ELLANT ITSELF MAKES A DEPARTURE AND CHANGES ITS METHOD OF PREPARING ACCOU NTS I.E. THE PROJECT ACCOUNT OR WORKS ACCOUNT. IN THE ASSESSMENT YEAR 2005-06 WHAT THE APPELLANT HAS DONE IS THAT T HAS TAKEN AWAY THE INT EREST AND ADVERTISEMENT EXPENDITURE OUT OF THIS PROJECT OR WORKS ACCOUNT A ND SHOWN THE SAME IN THE PROFIT AND LOSS ACCOUNT WHICH WAS NOT THE CASE IN T HE ASSESSMENT YEAR 2004- 2005. THEREFORE THERE IS NO CONSISTENCY IN APPEL LANTS TREATMENT OF INTEREST AND ADVERTISEMENT EXPENSES IN THE ACCOUNTS THEREB Y VIOLATING THE PRINCIPLE ENUNCIATED IN THE ABOVE REFERRED TO PUNE ITAT DECIS ION IN THAKKAR DEVELOPERS CASE WHICH STATED THAT THE AS 1 MANDATE D THAT CONSISTENCY WAS A FUNDAMENTAL ACCOUNTING PRINCIPLE. THIS CHANGE IN THE METHOD IS THEREFORE ITA NO. 713/PN/2009 & C.O. 31/PN/2010 M/S. BUNTY HOUSING (A.Y. 2005-06) 7 NOT ACCEPTABLE. ACCORDING TO ACCOUNTING TREATMENT GIVEN IN ASSESSMENT YEAR 2004-2005 THEREFORE THE ENTIRE INTEREST AND ADVER TISEMENT EXPENSES SHOULD BE TREATED A PART OF MAYUR NAGARI PHASE-I ONLY. 3.10 IN ANY CASE AND WITHOUT PREJUDICE TO THE ABOV E REASONING THE MAYUR NAGARI PROJECT IS A NEW PROJECT STARTED IN ASSESSME NT YEAR 2004-2005 AND INSPITE OF THE APPELLANT HAVING TREATED PHASE-I AND PHASE-II AS TWO DIFFERENT PROJECTS BASICALLY THEY ARE PART OF THE SAME PROJE CT. THERE WAS NO OTHER PROJECT IN PROGRESS DURING THE YEAR. IN THE APPELL ANTS SUBMISSION DATED 12- 02-2009 IT IS ALSO ACCEPTED THAT THE ADVERTISEMENT EXPENSES PERTAINED TO HOARDINGS AT VARIOUS PLACES IN MAGAZINES AND NEWSP APERS BROCHURE PRINTING ETC. FOR BOTH THE PROJECTS WHICH WERE ADVERTISED SIMULTANEOUSLY. IT IS THEREFORE ABSOLUTELY CLEAR THAT THE INTEREST EXPEN SES AND ADVERTISEMENT EXPENSES AS A WHOLE RELATED TO THIS MAYUR NAGARI PR OJECT PHASE-I AND PHASE- II ONLY AND IT WAS NOT A CASE OF MULTIPLE PROJECTS BEING RUN SIMULTANEOUSLY BY THE APPELLANT. AS SUCH INTEREST AND ADVERTISEMENTS WAS LIABLE TO BE CAPITALIZED AND TREATED AS WORK-IN-PROGRESS OF THE APPELLANT SINCE PROJECT COMPLETION METHOD WAS BEING FOLLOWED. THIS IS IN N O WAY IN CONTRAVENTION TO THE DECISION IN THE CASE OF THAKKAR DEVELOPERS (IT AT PUNE) AS DISCUSSED ABOVE AND WAS CONSISTENT WITH THE DECISION OF THE ITAT MUMBAI SPECIAL BENCH IN THE CASE OF WALL STREET CONSTRUCTION LTD. THEREFORE THE ENTIRE INTEREST AMOUNT OF RS. 8 41 179/- SHOULD BE CAPITAL IZED TREATING IT AS PART OF WORK-IN-PROGRESS FOR MAYUR NAGARI PROJECT. SO FAR AS ADVERTISEMENT EXPENSES ARE CONCERNED OUT OF THE AMOUNT OF RS.7 59 842/- T HE ASSESSEE HAS ITSELF DISALLOWED THE AMOUNT OF RS. 2 56 999/- UNDER SECTI ON 40(A)(IA) FOR NOT DEDUCTING THE TAX AT SOURCE. THOUGH IN PRINCIPLE THE ENTIRE AMOUNT OF ADVERTISEMENT EXPENSES IS LIABLE TO BE CAPITALIZED TO THE COST OF THE PROJECT AND DISALLOWED SO FAR AS CLAIM AS REVENUE EXPENSES IS CONCERNED; HERE THE NET AMOUNT LIABLE TO BE DISALLOWED WOULD BE THE BAL ANCE AMOUNT I.E. RS.5 02 843/-. THIS WOULD RESULT IN ENHANCEMENT IN RESPECT OF CURRENT YEARS INCOME OF THE ASSESSEE BY AN AMOUNT OF RS.8 41 979/ - ON ACCOUNT OF INTEREST AND RS.5 02 843/- ON ACCOUNT OF ADVERTISEMENT EXPEN SES WHICH ARE DISALLOWED IN ACCORDANCE WITH THE REASONING GIVEN A BOVE. 8. WE THUS FIND THAT THE FIRST APPELLATE ORDER I S COMPREHENSIVE AND REASONED ONE AND IS FULLY SUPPORTED BY THE DECISIONS IN THE CASES OF CIT V. BILAHARI INVESTMENTS PVT LTD. (SUPRA) OF HONBLE SUPREME COU RT AND OF THE PUNE BENCH IN ITA NO. 713/PN/2009 & C.O. 31/PN/2010 M/S. BUNTY HOUSING (A.Y. 2005-06) 8 THE CASE OF THAKKAR DEVELOPERS (2008) (SUPRA). WE ARE THUS NOT INCLINED TO INTERFERE WITH THE SAME. THE SAME IS UPHELD. THE ISSUE RAISED IN THE GROUNDS IS DECIDED AGAINST THE REVENUE AND IN RESULT RELATED GROUNDS ARE REJECTED. THE APPEAL IS DISMISSED. C.O. NO. 31/PN/2010 9. THE ASSESSEE HAS OBJECTED FIRST APPELLATE ORDER ON SEVERAL BASIS. SINCE WE HAVE ALREADY UPHELD THE ACTION OF THE LD CIT(A) IN ACCEPTING THE CLAIM OF THE ASSESSEE THAT THEY HAVE BEEN CONSISTENTLY FOLLOWING PROJECT COMPLETION METHOD THE OBJECTIONS RAISED IN THE CROSS OBJECTION UNDER CONS IDERATION DO NOT STAND AND THESE OBJECTIONS ARE REJECTED AS SUCH. 10. IN THE RESULT CROSS OBJECTION IS DISMISSED. 11. IN SUMMARY THE APPEAL AND CROSS OBJECTION BOT H ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH OCTOB ER 2010 SD/- SD/- (B. RAMAKOTAIAH) (I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED THE 29TH OCTOBER 2010 US COPY OF THE ORDER IS FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A)- II PUNE 4. CIT II PUNE 5. D.R. ITAT B BENCH 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES PUNE