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Vardhman Developers Ltd vs. ITO (ITAT Mumbai)

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: February 4, 2015 (Date of pronouncement)
DATE: February 9, 2015 (Date of publication)
AY: 2009-10
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CITATION:
Expenditure towards repair and renovation of leased premises is capital in nature. Method for allocation of common expenses to different WIP projects of a builder explained

The assessee being a builder and developer, Accounting Standard 7 (AS-7), issued by the ICAI, titled, ‘Construction Contracts’, would not apply, so that the prescription of AS-9 and AS-2, based on general principles that govern any business, would apply for the revenue recognition and inventory valuation respectively. Only costs incurred toward a particular project, or otherwise related to construction activity, would stand to be allocated and, thus, capitalized as a part of the project cost

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