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IN THE INCOME TAX APPELLATE TRIBUNAL “H(SMC)” BENCH, MUMBAI

BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER

ITA No. 491/Mum./2026 (Assessment Year : 2013-14)

Veda Real Estate Corporation Pvt. Ltd.

4^th Floor, 139, Seksaria Chambers, Nagindas Master Road, Fort,

Mumbai - 400001.

……………. Appellant (PAN: AADCB8408M)

v/s

Deputy Commissioner of Income Tax, Central Circle – 8(1),

656, 6^th Floor, Aayakar Bhavan, Maharishi Karve Road, ……………. Respondent

Mumbai – 400020

Assessee by : Shri Punit Shah Revenue by : Shri Pravin Salunkhe SR. DR

Date of Hearing – 17/03/2026 Date of Order – 26/03/2026

O R D E R

PER SANDEEP SINGH KARHAIL, J.M.

The assessee has filed the present appeal against the impugned order

dated 24.11.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeal) – 47,

Mumbai [“learned CIT(A)”], for the assessment year 2013-14.

2. In its appeal, the assessee has raised the following grounds:

[ITA No. 491/Mum./2026, A.Y. 2013-14] 2

“Ground No.1

The CIT (A) - 47, Mumbai (hereinafter referred to as 'CIT (A)) erred in passing the order without considering the detailed written submissions filed

by the Appellant on 25" October 2017.

The Appellant submits that the order passed by the CIT(A) is bad in law and pray that the Order passed by CIT (A) be set aside.

Ground No.2 Without prejudice to above the Assessing Officer erred in making addition of Rs.77,82,113 without providing any opportunity of being heard to the Appellant, and submit that the order is in violation of principle of natural

justice and bad in law and pray that the same be quashed.

Ground no 3:

Without prejudice to above, the CIT (A) erred in holding that site office and sample flat expenses incurred were in contravention of law and upheld invoking of Explanation 1 to section 37(1) of the Income Tax Act, 1961, without providing the law under which such construction is prohibited. The Appellant submits that provision of Explanation 1 to section 37(1) are not applicable to the facts of their case and pray that the addition of

Rs.77,82,113 be deleted.

Ground no 4:

Without prejudice the above, CIT (A) erred in also holding that the expenditure incurred on site and sample flat of Rs. 77,82,113 were pre- operative expenses, without appreciating the facts available on records, which clearly demonstrate that the Appellant was actively engaged in the business of real estate development and the said expenditure were incurred in connection with such activity and pray that the AO directed to delete the

addition of Rs. 77,82, 113.

Ground no.5(a):

Without prejudice to above, CIT (A) erred in also holding that the expenditure of Rs.77,82,113 /- incurred on site development expenses and sample flat are capital expenditure in nature, on the ground that Appellant has admitted that the sample flat forms part of capital structure of the project and will be ultimately sold. The Appellant submits that the said finding is factually incorrect and pray that the expenditure of Rs. 77,82,113 is revenue in nature as the expenditure is incurred for the purpose of business and be allowed as deduction and the addition of Rs. 77,82,113 be

deleted.

Ground No.5(b):

[ITA No. 491/Mum./2026, A.Y. 2013-14] 3

Without prejudice to the above, the CIT (A) erred in treating the expenditure of Rs. 77.82,113/- incurred on site and sample flat as capital expenditure. Even assuming but without admitting that the same is not allowable as revenue expenditure, the said expenditure shall form part of the project cost, and is intended to be sold in the ordinary course of business in the near future and should be added to the work in progress and allowed as a

deduction in computing the profits of the business.

Ground No.6

Without prejudice to above the CIT (A) erred in making disallowance of Rs. 77,82,113. The Appellant submits that disallowance if at all to be made, shall ought to be restricted to Rs. 63,85,958 which is i