TaxTMI 
TaxTMI 
2013 (12) TMI 19
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....issioner of Income-tax(Appeals) erred in confirming the action of the Assessing Officer in estimating the income from development works undertaken by the appellant at 12.5% on gross receipts without excluding the recoveries made by the contractee. 3. The learned Commissioner of Income-tax(Appeals) erred in confirming the action of the Assessing Officer in estimating the income at 7.5% of the gross receipts in respect of the works entrusted for the sub-contractors. 4. The learned Commissioner of Income-tax(Appeals) erred in confirming the addition of Rs.2,37,69,481/- representing the interest received without considering the fact that such interest was received in connection with provision of bank guarantee and the interest received is assessable under the head "income from business". The learned CIT(A) ought to have held that such interest form part of income from business and shall not be separately added when the net income from business is estimated." 3. Facts of the case in brief for the assessment year 2008-09 are that the assessee, a company engaged in the business of civil contracts filed its return of income for the assessment year 2008-09 on 30.9.2008, declaring t....
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....524) in this behalf, and submitted that the departmental recoveries should be reduced from the gross contract receipts, and it is only on the net receipts that the rate of profit adopted should be applied. 7. Learned Departmental Representative on the other hand, strongly relied on the orders of the Revenue authorities and submitted that there is no merit in the contentions of the assessee, on this issue. 8. We have considered the rival submissions and perused the orders of the revenue authorities. Admittedly, there is no dispute with regard to the reasonableness of the rate adopted by the Assessing Officer for estimating the income of the assessee from the contracts, and all the grievance of the assessee is only with regard to the method adopted by the Assessing Officer for arriving at the gross receipts, viz. without deducting the departmental recoveries therefrom. We are in agreement with the learned counsel for the assessee that the departmental recoveries, which have not actually been received by the assessee, cannot be treated as yielding in any income to the assessee. It is only in the year in which assessee receives such recoveries made by the Government that such inc....
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....d 16.3.2012 in assessee's own case for the assessment years 2001-02 and 2002-03. 12. We have considered the rival submissions and perused the orders of the lower authorities. We find that this very issue came up for consideration before this Tribunal in assessee's own cases for assessment years 2001-02 and 2002-03, in ITA Nos.430/Hyd/2003 and ITA No.996/Hyd/2003, and the Tribunal vide order dated 16.3.2012 confirmed the order of the CIT(A), estimating the income on sub-contract receipts at 4% for assessment years 2001-02 and 2002-03. Accordingly, in conformity with the said order of the Tribunal for earlier years, we set aside the impugned order of the CIT(A), and direct the Assessing Officer to estimate the income of the assessee from sub-contract receipts adopting a rate of 4%. To this extent, grounds of the assessee on this aspect are partly allowed. 13. The next grievance of the assessee in these appeals relates to assessment of interest received by the assessee. 14. The learned counsel for the assessee, reiterating the contentions urged before the lower authorities submitted that the lower authorities have made the impugned additions without considering the fact that ....
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....eparate addition is called for under S.56, for bringing to tax the interest income in question, under the head 'other sources'. In support of this contention, reliance is placed on the decisions of the Tribunal in assessee's own cases for the earlier years noted above. On careful consideration of the matter, we find no merit in the contentions of the assessee on this aspect. The issue as to the head under which the interest earned by the assessee, even in the course of carrying on the business, now stands settled by the decisions of the Apex Court in Tuticorin Alkali Chemicals & Fertilisers Ltd.(227 ITR 172) and Pandian Chemicals V/s. CIT(262 ITR 278). In view of the ratio laid down by the Apex Court in these decisions, which in fact have been followed by the CIT(A) in the impugned orders, the decisions of the Tribunal in assessee's own cases for assessment years 1991-92 and 1992-93 and for assessment year 1995-96, noted (supra), as also the decision of the jurisdictional High Court in the case of CIT V/s. Vidyut Steel ltd.(219 ITR 30), are no longer a good law. In this view of the matter, finding no merit in the grievance of the assessee on this issue, we uphold the orders of the ....