2015 (10) TMI 1617

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....ar 2012-13. Shri Mehboob Ali Khan, ld. DR represented on behalf of the Revenue and Shri Raghu R. Pikale, CA represented on behalf of the Assessee. As the issues in both the appeals are interconnected, both the appeals are disposed off by this common order. 2. It was the submission by the ld. DR that the Assessee, Department of Tourism had entered into a contract with one M/s. Arihant Ship Breakers Pvt. Ltd., Mumbai for the removal of a stranded vessel, M.V River Princess which was stranded in the shallow waters off Sinquerim beach. The contract was for an amount of Rs. 99 crores. The Government approved valuers had valued the scrap from the vessel at Rs. 14.01 crores which was to be adjusted towards the final payment. It was the submission....

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....d there was no condition of deposit in the contract between the Assessee and M/s. Arihant Ship Breakers Pvt. Ltd. and consequently, the same should not have been treated as a deposit but as part payment of the total consideration of Rs. 99 crores for which the contract was entered into between the Assessee and M/s. Arihant Ship Breakers Pvt. Ltd. 3. In reply, the ld. AR submitted that the said amount of Rs. 10 crores was only a deposit against the Bank guarantee of Rs. 10 crores which M/s. Arihant Ship Breakers Pvt. Ltd. had given for the due performance. The ld. AR drew our attention to the copy of the agreement between the Assessee and M/s. Arihant Ship Breakers Pvt. Ltd., Bombay dt. 25.4.2011 by which the said M/s. Arihant Ship Breakers....

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....cally allows the contractor to retain the scrap value equivalent to an amount of Rs. 10 crores and the balance is to be deposited with the Assessee. Clause 3(f) clearly admits that no payment or any benefit of whatsoever nature shall ensue to the contractor except as provided in clause 3(e) until the entire work at that stage is fully completed satisfactorily in accordance with the terms of the agreement. Thus, clause 3(e) and 3(f) clearly shows that the amount of Rs. 10 crores retained by the contractor, M/s. Arihant Ship Breakers Pvt. Ltd. from the sale of the scrap is clearly payment received by M/s. Arihant Ship Breakers Pvt. Ltd. in lieu of the contract and against the bid of Rs. 99 crores being the final amount due to the contractor. ....