IN THE HIGH COURT OF DELHI AT NEW DELHI 
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   ITA 450/2013  
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 COMMISSIONER OF INCOMET TAX (C) ? III    ..... Appellant 
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 Through:  Mr.N.P.Sahni, Advocate 
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 versus 
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 M/S VANSHIDAR PROJECTS PVT. LTD. ..... Respondent 
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 Through:   None. 
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 CORAM: 
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 HON'BLE MR. JUSTICE SANJIV KHANNA 
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 HON'BLE MR. JUSTICE SANJEEV SACHDEVA 
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 O R D E R 
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    07.10.2013 
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 The finding of the first appellate authority and the Tribunal is 
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 that Rs.1,92,00,000/- (wrongly taken by the assessing officer as Rs.2,28,00,000/-)  was not claimed as an expenditure  in the profit and 
 loss account and,  therefore, Section 40A(1) is not applicable.  The said 
 factual position, has not been disputed.  Copy of the profit and loss 
 account to contest the said finding has not been filed.  The issue is not 
 whether payment in cash was made to purchase, stock in trade but whether 
 any expenditure was claimed.  Section 40A(1) cannot be applied if no 
 expenditure is claimed to reduce profits in profit and loss account. 
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 In fact, interest of the revenue is fully protected in view of the 
 observations/directions stated in the last few lines of the first 
 appellate authority.  The same reads as under: 
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 ? However, as and when the investment made by way of advance to farmers 
 for purchase of land is treated as part of ?work, in progress stock in 
 trade? it would be a logical corollary that the said value of ?work in 
 progress stock in trade? would have to be reduced by 1/5th of the total 
 cash payment made during the year (FY 2006-07) for Rs.1,92,00,000/- which 
 works out to Rs.38,40,000/-. Subject to the above direction the addition 
 made to income during this year for Rs.45,60,000/- is directed to be 
 deleted.? 
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 The assessee has accepted the said directions and did not prefer 
 any appeal to the Tribunal. 
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 There is no merit in the present appeal which is misconceived. 
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 Appeal is dismissed in limine. 
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 SANJIV KHANNA, J 
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 SANJEEV SACHDEVA, J 
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 OCTOBER 07, 2013/sv 
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 $ 3 
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