TaxTMI 
TaxTMI 
2014 (7) TMI 1261
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....made by the learned AO in the hands of the appellant ignoring the facts of the instant case that the expenses incurred by the appellant on temporary errection/accommodation is fully allowable expenditure. 2. The learned CIT(A) erred on facts and in law in confirming the addition of Rs. 22,60,18,330 made by the learned AO in the hands of the appellant ignoring the facts of the present case. 3. The learned CIT(A) erred on facts and in law in confirming the addition of Rs. 11,55,272 made by the learned AO in the hands of the appellant without appreciating the facts of the present case that the expenses pertaining to prior period were accrued crystallized during the relevant year and are fully allowable. 4. The learned CIT(A) erred on facts and in law in not providing the appellant reasonable and sufficient opportunity to have its say and to make compliances of the reasons being relied upon by him in making addition in the hands of the appellant. 5. The appellant reserves it right to advance such other grounds before or at the hearing, which it may consider fit and appropriate, for which it craves leaves to amend, alter or otherwise modify the grounds appearing hereinbefore wit....
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.... upon the judgment of the Hon'ble Gauhati High Court in the case of CIT v. Sibson Construction & Co. [1996] 221 ITR 468, the AO has allowed depreciation at 7.5 per cent i.e. Rs. 82,41,179 and made disallowance of the extra claim of Rs. 10,16,41,206 as revenue expenditure and added the same to the income of the assessee. 7. Assessee preferred an appeal before the learned CIT(A) with the submission that the structures consist of temporary site accommodation and general site arrangements and are eligible for 100 per cent depreciation. It was also contended that the rate of 7.5 per cent adopted by the AO does not exist in the Statute at present. The learned CIT(A) reexamined the claim of the assessee and being convinced with the explanations of the assessee, he was of the view that the cost of site accommodation needs to be allowed equally to the life of the project i.e. five years and therefore, the cost would be spread over five years. He accordingly computed the allowable expenditure at l/5th of the total claim of Rs. 10,98,82,385 which comes to Rs. 2,19,76,477. Accordingly, the disallowance was restricted to Rs. 8,79,05,908. 8. Aggrieved, the assessee as well as the Revenue a....
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....lier assessment years, no disallowance of this nature was ever made though assessments were framed under s. 143(3) of the Act. In support of his contention, the learned counsel for the assessee has placed reliance upon the assessment orders for asst. yrs. 2004-05 to 2008-09, in which no disallowance under this head was ever made. The learned counsel for the assessee has further contended that following the rule of consistency, no disallowance can be made in the impugned assessment year. 10. The learned Departmental Representative, on the other hand, has placed reliance upon the order of the AO. Besides, it was also contended that the assessee has not furnished complete details before the lower authorities and the expenses thereof: whereas the learned counsel for the assessee has submitted that the accounts of the assessee are duly audited and complete details were furnished before the AO. 11. Having carefully examined the orders of the lower authorities in the light of the rival submissions and the documents placed on record, we find that the assessee has been conducting similar nature of activities since its inception. The assessments for asst. yrs. 2004-05 to 2008-09 were frame....
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....ee has preferred an appeal before the learned CIT(A) with the submission that the expenses relating to shuttering, centering, scaffolding, etc.. are allowable at 100 per cent, as these items are nothing but consumable stores which would either be used in the construction or written off as and when it becomes necessary. 16. The learned C1T(A) re-examined the claim of the assessee and being partly convinced with it, he allowed depreciation at 15 per cent and restricted the addition to Rs. 22,60,18,330. 17. Aggrieved, the assessee as well as the Revenue are in appeal before the Tribunal. 18. During the course of hearing, the learned counsel for the assessee has submitted that the assessee is engaged in the construction of bridges, flyovers, underways and similar projects on a large scale. All the activities require shuttering, centering, scaffolding, etc. which may be elaborated as a false work erected to give temporary support to concrete structure and it is removed after the concrete gains strength. It also includes temporary support structures for framework used to mould concrete to form a desired shape and scaffolding to give workers access to the structure being constructed. I....
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....val submissions, we find that no disallowance was made by the AO in this regard during the earlier assessment years i.e. 2004-05 to 2008-09 though the assessments were framed under s. 143(3) of the Act. Copies of the assessment orders are placed at pp. 102 to 110 of the compilation of the assessee. 21. We have also carefully examined the order of the Tribunal in the assessee's own case pertaining to asst. yr. 1995-96 which is available at pp. 33 to 42 of compilation of the assessee filed along with appeal memo in which the Tribunal has followed its earlier order for asst. yr. 1988-89 and has directed the AO to allow 100 per cent depreciation on the cost of shuttering, centering, scaffolding, etc. This order was passed on 31st .Jan., 2011 and nothing is placed before us on behalf of the Revenue with regard to any contrary views taken by the Tribunal or the High Court on this issue in the assessee's case. 22. Our attention was also invited to the fact that the assessee has been debiting a particular amount per cubic metre to the cost of the project as expenses incurred in shuttering, centering, scaffolding, etc. keeping in view the complexity of nature of work. Copy of the ....
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....htly dealt with the issue. 27. Accordingly these appeals are disposed of. ITA No. 266/Lkw/2013 : 28. This appeal is preferred by the Revenue against the order of the learned CIT(A) on a solitary ground that the learned CIT(.A) has erred in law and on facts in deleting the addition of Rs. 10,01,685 made by the AO by way of disallowances of expenses claimed for payment under the head pension contribution for employees of the Corporation. 29. At the very outset, the learned counsel for the assessee has submitted that the tax effect involved in this appeal is less than the prescribed monetary limit, therefore, the Department ought not to have filed this appeal in view of the instructions issued by CBDT. 30. The learned Departmental Representative did not controvert the above fact. 31. It is noticed that s. 268A of the Act has been inserted by the Finance Act, 2008 with retrospective effect from 1st April, 1999. The provisions contained in s. 268A read as under: "268A. (1) The Board may, from time to time, issue orders, instructions or directions to other IT authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or applicatio....
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....essment year, but no evidence was either placed before the AO or before the learned CIT(A). Even before the Tribunal no evidence is placed in order to establish that these prior period expenses have been crystallized in the impugned assessment year. 36. Identical issue has already been examined by us in the foregoing paras wherein we have held that disallowance on account of prior period expenses deserves to be confirmed in the absence of any documentary evidence in order to establish that the prior period expenses have been crystallized in the impugned assessment year. Following the view taken in the foregoing appeals, we confirm the order of the learned CIT(A) in this regard. 37. Accordingly, both the appeals of the assessee are dismissed. ITA Nos. 157 and 255/Lkw/2014 : 38. These are cross-appeals by the assessee as well as the Revenue against the order of the learned CIT(A) for asst. yr. 2010-11. 39. The grounds raised by the assessee in ITA No. 255/Lkw/2014 are as under : "1. The learned CIT(A)II, Lucknow erred on facts and in law in confirming the addition of Rs. 12,80,00,000 made by the AO in the hands of the appellant ignoring the facts of the instant case that the ....
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.... The CIT(A) has allowed the assessee to write off l/5th of the expenses claimed in this year, which is not permissible as per the IT Act. The action of the AO is justified in view of the decision of Hon'ble Gauhati High Court in the case of CIT v. Sibson Construction & Co. (1996) 221 ITR 468 (Gau.). 2. The CIT(A) has erred in law and on facts in allowing deduction under s. 80-IA of the IT Act, 1961 at Rs. 7,62,89,122 to the assessee ignoring the fact that the above claim of deduction has not been substantiated by the assessee during the assessment proceedings and is not allowable as per provision of s. 80AB of the IT Act, 1961." 41. Ground No. 1 in the Revenue's appeal in ITA No. 157/Lkw/2014 and ground Nos. 4 and 5 in the assessee's appeal in ITA No. 255/Lkw/2014 relate to the disallowance made on account of expenditure under the head temporary site accommodation and shuttering, centering, scaffolding, etc. 42. These issues have already been examined by us in the foregoing appeals in which we have held that expenditures on these heads are allowable expenditure and the additions made thereon were to be deleted. We, therefore, following the same decide this issue in ....
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....as made provision for "foreseen loss" at Rs. 12.80 crores in its books of account, but it was disallowed by the AO having noted that the assessee could not file any evidence on the basis of which it has created the provision for "foreseen loss". 49. An appeal was preferred before the learned CIT(A), but the disallowance was confirmed by the learned CIT(A), as the assessee could not place satisfactory evidence to justify the creation of provision for "foreseen loss" in its books of account. 50. Now the assessee is before us with the submission that it has created the provision as per guidelines issued by the Institute of Chartered Accountants of India through Accounting Standard-7, therefore, the same may be allowed. During the course of hearing, the learned counsel for the assessee was asked to explain as to on what basis and for what reason assessee is making the provision for "foreseen loss". In response thereto, it was contended that the assessee is engaged in such a business where unforeseen losses are mandatory and every year assessee is suffering certain losses which cannot be quantified and the assessee is making a provision for the same on estimate basis. 51. The learned....