TaxTMI 
TaxTMI 
2019 (11) TMI 270
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....he appeal of the assessee in ITA No. 1825/Del/2005 are reproduced as under: "1(a) That on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) [here-in-after referred to as CIT(A)], was not justified in upholding the disallowance of the appellant's claim for deduction of depreciation amounting to Rs. 24,41,250/- on the value of machinery spare parts capitalized during the year. 1(b) That on the facts and in the circumstances of the case and without prejudice to ground no.1(a) taken here in above, the Ld. CIT(A)grossly erred in holding that although depreciation is allowable on machineries in 'ready to use' condition but the same is not allowable on machinery spares which are also in 'ready to use 'condition. 1(c). That on the facts and in the circumstances of the case, and without prejudice to ground no. 1(a) & 1(b) taken here in above, the appellant may otherwise be allowed deduction on the basis of Actual consumption, in case the claim of depreciation is not allowable to the appellant. 2(a) That on the facts and in the circumstances of the case, Ld. CIT(A) was not justified in disallow....
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....rcumstances of the case and without prejudice to ground no.6(a) taken here in above, the Ld. CIT(A)completed the appellate proceedings in haste without affording reasonable opportunity to the appellant for furnishing all the relevant documents and hence the impugned issue may be set aside for allowing the same on merits. 7(a) That on the facts and in the circumstances of the case, theLd.CIT (A) was not justified in upholding the disallowance of the claim of the appellant towards provision for other expenses amounting to Rs. 1,61,25,533/- out of the total claim for Rs. 3,57,49,802/-. 7(b) That on the facts and in the circumstances of the case and without prejudice to ground no.7(a) taken here in above, the Ld. CIT(A)completed the appellate proceedings in haste without affording reasonable opportunity to the appellant for furnishing all the relevant documents and hence the impugned issue may be set aside for allowing the same on merits. 8(a) That on the facts and in the circumstances of the case, the Ld. CIT(A)was not justified in confirming the disallowance made by the Ld. Assessing Officer in respect of interest received vide intimation u/s143(1) fo....
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....n the circumstances of the case, the Ld. CIT (A) was not justified in upholding the disallowance of the claim of the appellant amounting to Rs. 6,77,97,458/- on account of the profit on sale of fixed asset in computing the book profit for the purpose of Section 115JB of the Act. 15. That on the facts and in the circumstances of the case, the Ld. CIT (A) was not justified in disallowing Rs. 28,96,70,614/- towards the claim of deduction u/s 80HHC in computing the book profit for the purpose of Section 115JB of the Act. 16. That the appellant craves leave, to add, to amend, to modify, to rescind, supplement or alter any ground stated herein above either before or at the time of hearing." 3. The grounds of the appeal of the Revenue in ITA No. 2234/Del/2005 are reproduced as under: "1. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the alternate claim of the assessee for deduction u/s80HHB(A)disregarding the fact that the assessee had neither furnished with the return of income the report of the auditor in form No.10CCAA nor created the requisite reserve required as per the law. Since the assessee did not fulf....
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....of the case and in law, the CIT(A) has erred in deleting the disallowance of Rs. 1,96,24,269/- out of total disallowance of Rs. 3,57,49,802/- made by the AO on account of provision for other expenses disregarding the fact that the said expenditure was claimed by the assessee on estimate and adhoc basis and the expenditure had not crystallized in the relevant financial year. 9. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in restricting the disallowance of provision for demobilization to Rs. 2,13,04,000/- and provision for other expenses to Rs. 1,61,25,533/- in computation of book profit for the purpose of section 115JB as against the disallowance made by the AO of an amount of Rs. 4,80,49,000/- as provision for demobilization and Rs. 3,57,49,802/- as provision for other expenses. 10. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in granting relief to the assessee with regard to the AO's Action of adding back the provision for gratuity amounting to Rs. 44,39,494/- to compute the book profit u/s 115JB of the I.T. Act, 1961. 11. On the facts and in the circumstances of the case and in....
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....Aggrieved with the finding of the Ld. CIT(A), both the assessee and the Revenue are in appeal raising the respective grounds as reproduced above. 5. In ground No. 1 of the appeal of the assessee, the issue of disallowance of depreciation amounting to Rs. 24,41,250/-on the value of the machinery part treated as capital asset by the assessee ,is involved. In ground number 1(a) & 1(b), the assessee has contested the disallowance whereas in ground No. 1(c), the assessee has sought alternative deduction on the basis of the actual consumption of machinery spares as revenue expenditure. 6. The facts qua the issue in dispute are that in the assessment years prior to the assessment year under consideration, the assessee company had been following the practice of charging the cost of 'machinery spares' as revenue expenditure in the year of actual consumption. In the year under consideration, it is claimed that pursuant to change in the accounting policy to comply with accounting standards, the assessee capitalised the 'Machinery spares'. Accordingly, the assessee added back the amount of Rs. 97.65 lakhs incurred on purchase of 'Machinery spares' under computation of the income and clai....
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....of the machinery spares is not allowed, the assessee may be allowed deduction on the basis of the actual consumption of the machinery spares. 9. On the other hand, the Ld. DR submitted that in the case of Insilco Ltd (supra), it is held that for eligibility of depreciation, the spares must be integral part of the machinery, otherwise no depreciation is allowable. He submitted that the assessee has substantiated with documentary evidences that the spare parts in question are integral part of the Machinery. He did not object on the alternative ground for allowing expenditure on the basis of the actual consumption of machinery spares. 10. We have heard the rival submissions and perused the relevant material on record. 11.1 The 1st issue in the grounds raised is whether capitalising of machinery spares for the purpose of Income Tax Act in view of accounting standards is justified. 11.2 In the case of Insilco Ltd (supra) Hon'ble High Court has referred to Accounting Standard (AS-10) and observed obligation of the assessee to treat the spares which are integral parts of fixed asset as capital expenditure as under: 16.4 It is clear upon reading the provisi....
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.... 11.3 In above case, the learned counsel of the assessee submitted that in view of the mercantile system of accounting followed under section 145(1) of the Act, the treatment of assessee's emergency spares as capital expenditure in accordance to revised AS-2 and AS-10 would be in consonance with provisions of the Act. However this proposition was objected by the learned counsel of the Revenue. The relevant observation of the Hon'ble High Court on the issue whether Revenue authorities are required to follow accounting standard is reproduced as under: "16.6 It is not disputed that the assessee is maintaining the accounts based on a mercantile system. Under sub-s. (1) of s. 145 of the Act the assessee's income which is chargeable under the head "Profits and gains of business or profession" is required to be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. 16.7 As indicated above the assessee has been maintaining a mercantile system of accounting, therefore, the treatment of emergency spares in accordance with the revised AS-2 and AS- 10 would be in consonance with the mercantile system of accoun....
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....talized added to the cost of the fixed asset which have been created as a result of such expenditure. The above rule of accountancy should, in our view, be adopted for determining the Actual cost of the assets in the absence of any statutory definition or other indication to the contrary." 16.9 The learned counsel for the Revenue relied upon the judgment of the Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. vs. CIT (1997) 141 CTR (SC) 387 : (1997) 227 ITR 172 (SC) to buttress her submission that accountancy principles cannot override the provisions of the Act. This proposition is unassailable. One cannot take resort to a principle or rule of accountancy when the Act provides specifically for the situation at hand. But when the situation is one where there is no definitive provision, a Court can take resort to well accepted accountancy rules and principles. The Supreme Court in Tuticorin Alkali Chemicals (supra) has not derogated from this principle enunciated in Challapalli Sugar Mills Ltd. (supra). See observation in Tuticorin Alkali Chemicals (supra) at pp. 183 to 186, in particular, observations at p. 185(H) to p. 186(D). 16.10 The a....
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....ses of determining the justifiability of the assessee's claim for depreciation and development rebate under the Indian IT Act, 1961. The assessee sought to include in the cost of asset the interest paid by it for the period prior to commencement of business on borrowings taken up by it. The Supreme Court in coming to the conclusion that the assessee's stand was correct resorted to the rules of accountancy prevailing in the industry. In this context the following observations of the Supreme Court being apposite are extracted below : "In finding the answer to the question mentioned above, we have to bear in mind that it arises in the context of profits or gains of business and the permissible deductions on account of depreciation and development rebate relating to the machinery and plant of the assessee. As the expression 'Actual cost' has not been defined, it should, in our opinion, be construed in the sense which no commercial man would misunderstand. For this purpose, it would be necessary to ascertain the temptation of the above expression in accordance with the normal rules of accountancy prevailing in commerce and industry. ....It would appear ....
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....ccountancy governing underwriting accounts. It is a well accepted proposition that 'for the purposes of ascertaining profits and gains the ordinary principles of commercial accounting should be applied, so long as they do not conflict with any express provision of the relevant statutes, [see Whimster & Co. vs. IRC (1925) 12 Tax Cases 813 (C. Sess); IRC vs. Cock Rusell & Co. Ltd. (1949) 29 Tax Cases 387 (KB)]. This proposition has been affirmed by this Court in P.M. Mohammed Meerakhan vs. CIT (1969) 73 ITR 735 (SC). In the said case it has been observed (at p. 743) : "For that purpose it was the duty of the ITO to find out what profit the business has made according to the true accountancy practice." 11.4 The decision in the case of CIT Vs Southern petrochemical industries Corporation limited(supra) wherein it is held that depreciation is allowable on standby spare parts items which are not taken for use during the accounting year, has been considered in the case of CIT Vs Insilco Ltd (supra). We also note that the finding in the case of SPIC Ltd (supra) is identical to the finding in the case of Southern petrochemical industries Corporation limited (supra). ....
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....t that must be constantly borne in mind is that as a result of the expenditure which is claimed as an expenditure for repairs what is really being done is to preserve and maintain an already existing asset. The object of the expenditure is not to bring a new asset into existence, nor is its object the obtaining of a new or fresh advantage. This can be the only definition of "repairs" because it is only by reason of this definition of repairs that the expenditure is a revenue expenditure. If the amount spent was for the purpose of bringing into existence a new asset or obtaining a new advantage, then obviously such an expenditure would not be an expenditure of a revenue nature but it would be a capital expenditure, and it is clear that the deduction which the legislature has permitted under s. 10(2)(v) is a deduction where the expenditure is a revenue expenditure and not a capital expenditure." .............................................................................................." 11.9 Before us, the assessee has failed to demonstrate whether the spare parts which are used when a machine malfunctions, has brought into existence a new asset or given....
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....ing Officer disallowed the claim assigning following reasons: (a) Assessee is only a contractor executing certain specific civil work and not a developer (b) Such infrastructure project should be notified in the official Gazette and no evidence regarding the same was submitted by the assessee (c) The assessee is not involved in construction of the entire infrastructure facility as a whole. (d) The real motive and initiative behind undertaking of the project remains that of the principal and the contactors cannot lay claim on the same. (e) The assessee company has not infused fresh capital or any technical expertise in any manner so as to lay claim over the fact that it is engaged in development of infrastructure facility. (f) Similar disallowance was made in assessment year 2000-01. 12.3 The Ld. CIT(A) upheld the disallowance relying on the decision of Ld. 1st appellate authority in assessment year 2000-01, wherein it was held that;- (a) The role of the assessee is that of a contractor only; (b) The assessee was only executing certain civil works relating to construction of infrastructure facility; ....
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....e by the appellant were planning, execution, construction and making the infrastructure facility ready for operations. Ld. Assessing Officer has not pointed out any specific clauses of any agreement, which show's that all attributes of development were not present. Making a bald assertion that assesses was a contractor does not serve any purpose. Merely using the terms contractor in the agreement would not make any difference as what has to be seen is the substance. Anybody who enters into a contract is closely called a contractor but that does not mean that such person entering into the contract cannot be developer. The other agreement with MSRDC shown to us as one as instance clearly shows that appellant was engaged in investigation, planning,, organizing and construction of road over bridge within the stipulated time. If the Activities undertaken by the appellant cannot be termed as development, we are afraid then what can be called development? Therefore, we do not have any hesitation in holding in view of the arguments advanced from the sides of both parties and decisions relied upon that appellant was developing infrastructure facility and claimed deduction u/s 80IA in re....
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....qua the issue in dispute are that the assessee company entered into an agreement with the Government of Iran for supply of signalling & electrical equipment and supervision of its installation and commissioning. The agreement also provided for services such as supervision of installation, commissioning and training. 13.3 The Assessing Officer disallowed deduction amounting to Rs. 23.18 crores claimed under section 80HHC of the Act on the ground that the assessee company was obliged to supply services and was also responsible for training & commissioning and the said services are not eligible for deduction under section 80HHC of the Act. The Assessing Officer also observed that no clearance of an Indian custom station had taken place and the goods have been transported directly from third countries. The Ld. CIT(A) relying on the order of 1st appellate authority in assessment year 2000-01 upheld the action of the Assessing Officer. In assessment year 2000-01, the 1st appellate authority held that supply and erection of signalling system cannot be categorised as export of goods. 13.4 Before us the Ld. Counsel of the assessee submitted that issue in dispute is covered....
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....t sustainable and the disallowance made is hereby deleted" 13.7 Thus, the Tribunal has held that services are identical to the supply of material and dominant objective of the contract is purchase of equipment by the government of Iran. Further, it is held that direct shipment of the goods cannot disentitle assessee in claiming the deduction under section 80HHC in respect of the goods exported from one country to the other country outside India. 13.8 In view of facts and circumstances existed in the year under consideration being identical as compared to assessment year 2000-01 and the fact that Ld. CIT(A) himself has followed finding of the 1st appellate authority in assessment year 2000-01, respectfully following the finding of the Tribunal (supra), we set aside the finding of the Ld. CIT(A) on the issue in dispute and direct the Assessing Officer to allow the deduction claimed under section 80HHC of the Act. 14.1 In ground No. 4, the assessee has challenged disallowance of Rs. 9,32,902/-on account of miscellaneous donations. 14.2 The Assessing Officer observed that following donations have been paid to various Sports and Railway welfare organi....
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.... rival submission of the parties. Before the lower authorities, the assessee failed to establish that expenditure incurred on donations are wholly and exclusively for the purpose of business as required in terms of section 37 of the Act. Before us also, the assessee failed to substantiate as how case of the assessee is covered by the decision in the case of CIT Vs Bata India Ltd(supra). The expenses have evidently incurred on donation to Railway Board Association and Welfare Societies of Railway employees and not on festivals or community celebration in the area of projects executed by the assessee.In absence of any such evidences of incurring expenses on account of festival or community celebration in the vicinity of project executed, the reliance placed by the assessee on the decision in the case of CIT Vs Bata India Ltd(supra) is misplaced. We do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground of the appeal of the assessee is dismissed. 15.1 The ground No. 5 of the appeal of the assessee relates to disallowance of prior period expenses amounting to Rs. 1,80,20,765/-sustained by the Ld. CIT(A).....
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....ced that the liability in respect of the expenses pertaining to the FY 1986-87 crystalised during the year. In view of the above facts, expenses to the amount of Rs. 69,91.904 (Rs. 8,22.887 + Rs. 11.78.541 + Rs. 22.12.452 + Rs. 9.44.372 + Rs. 1[1.70.450 - Rs. 2.36.798) is allowed. 10.3.2 The appellant counsel has also filed the details regarding the claim of Rs. 11,56,337 in respect of NOIDA Express Way Project vide its letter dated 17-01-2005. On going through the details filed, it is observed that the liability of the expenses was communicated to the appellant vide letter dated 18-04-2001 by the concerned authority. As the liability has not crystalised during the year,the same cannot be allowed as expenditure. 10.3.3 In the letter dated 18-01-2005, prior period expenses in respect of the NTPC Korba Project has been claimed of Rs. 11,48,247. On going through the details submitted on page No.6, it is observed that the bifurcation of the expenses relating to various years have been given but no proof has been attached that the liability arose during the year, hence, the same cannot be allowed as expenditure. 10.3.4 For the Malaysia Project, a sum of Rs. 24....
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.... 15.6 We find that the Ld. CIT(A) has sustained the disallowance after examining and verifying the details in respect of the expenses filed before him . The Ld. CIT(A) held that in respect of the expenses amounting to Rs. 11,70, 450 /-claimed as prior period expenses for corporate office, the assessee failed to furnish any evidence for liability in respect of Rs. 2,36,798/- related to arrears of foreign service contribution of Sri Manoher Lal for the financial year 1986-87, claimed as crystallised in the year under consideration and accordingly sustained the disallowance in respect of the amount of Rs. 2,36,798/-. Before us also no evidences in this respect have been furnished by the assessee. Accordingly, we uphold the said disallowance of Rs. 2,36,798/-. 15.7 The Ld. CIT(A) disallowed claim of prior period expenses of Rs. 11,56,337 in respect of 'NIODA Expressway project' holding that liability of the expenses was communicated to the assessee vide letter dated 18/04/2001 by the concerned authority and thus the liability had not crystallised during the year and same was not allowable as expenditure in the year under consideration. Before us the Ld. counsel has subm....
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....ation. However , in view of no evidence filed in support of the claim of liability incurred in the year under consideration, the Ld. CIT(A) sustained the disallowance to the extent of Rs. 22,08,789/-. Before us, also no evidence in support of the claim that oil was lifted in the year under consideration, has been brought on record by the assessee. In absence of any documentary evidence in support of the claim, we uphold the finding of the Ld. CIT(A) in sustaining the disallowance of Rs. 22,08,789/-. 15.11 Next disallowance under prior period expenses amounting to Rs. 53,20,297/-pertaining to 'GAIL', 'L&T', and Rs. 17,56,806/- pertaining to 'OFC Ambala' was upheld by the ld. CIT(A), in view of no documentary evidences. Similarly disallowance of Rs. 63, 06, 235/-has been sustained by the Ld. CIT(A) in view of no details and evidence of the expenses. As no evidences were filed by the assessee in support of the claim that liability arose during the year under consideration, the Ld. CIT(A) upheld the disallowance. Before us the Ld. counsel claimed that retention money deducted and released by the client has been booked as income twice. He submitted that at the time of raising b....
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.... rebutted by the learned DR before us. In view of unrebutted fact that the liability amounting to Rs. 63,06,235/-crystallised during the year under consideration, the action of the Learned CIT(A) in allowing relief to the assessee to the extent, is justified. We do not find any error in the order of the Learned CIT(A) in this regard. The ground No. 6 of the appeal of the Revenue is accordingly dismissed. 16.1 The ground No. 6 of the appeal of the assessee relates to provision for demobilisation expenses sustained by the Ld. CIT(A) to the extent of Rs. 2,13,04,431/-. The ground No. 7 of the appeal of the Revenue relates to disallowance of provision for mobilisation expenses of Rs. 2.67 crores deleted by the Ld. CIT(A). 16.2 Regarding the provision of demobilisation expenses of Rs. 4,80,49,000/-claimed by the assessee as deduction, it was explained before the learned Assessing Officer that said provision was made for removal of temporary structure constructed at the project sites during construction period and shifting plant and equipment from the project site after completion of the projects. The assessee submitted that though the exact amount might not be quantifi....
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....India Ltd., 5 ITD 102; (b) Thermax Babcock & Wilcox Ltd. Vs. DCIT,72 TTJ 8271; (c) Voltas Ltd. Vs. DCIT, 64 ITD 232; (d) Calcutta Co. Ltd. Vs. CIT, 37 ITR 1, (e) CIT Vs. Navbharat Nirman Ltd., 141 ITR 723 (iv) The claim of the appellant is allowed in its own case in the earlier years. The claim on account of demobilization expenses and other expenses were disallowed only in AY 1985-86 and 1995-96 and in those years also, the same was allowed by the CIT (A). The department did not file any appeal on the issue before the ITAT. Therefore, as discussed above in the case of Radha Satsang Vs. CIT (supra), the same should not have been disallowed during the year. 13.3 As far as the provision for demobilization expenses are concerned, as the appellant has estimated the same on completion of the work at the work site, there is no dispute that the temporary structures and the plant and machinery moved at the site is required to be moved back for which the appellant is supposed to incur an expenditure. It cannot be said that the liability is not an ascertained liability though it is a fact that it is not exactly quantifiable. It is also a ....
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....s there is no work at Farakka. Again no evidence has been filed when this project was completed and how after completion of the project, the liability of the appellant to pay the employees arises. Therefore, the AO has rightly made the addition. To sum up. out of the total disallowance made by the AO of Rs. 4,80,49,000/-, a sum of Rs. 2,13,04,000 (Rs. 3,04,000 + Rs. 1,14,00.000 + Rs. 96,00,000) is confirmed and the balance is deleted. As no details have been filed for Rs. 431 (Rs. 4,80,49,000 - Rs. 4,80,00,569), the same is confirmed." 16.4 Before us, the learned counsel of the assessee reiterated the submission made before the Ld. CIT(A) and further submitted that provision for demobilisation represented definite business liability and was provided in accounts following mercantile system of the accounting though a part of the same was written back in the future years. The Ld. Counsel relied on the decision of the Hon'ble Supreme Court in the case of Rotork Control India (P) Ltd Vs CIT (2009) 314 ITR 62 (SC). In support of the proposition that accounting method followed by the assessee is presumed to be correct till the Assessing Officer comes to the conclusion th....
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....in the case of FFE Minerals India Pvt. Ltd. Vs. JCIT [2018] 98 taxmann.com 170 (Madras), particularly para 26-28. In para 26 of the order, the Hon'ble Court has held that - "Possibility" has been defined as an event that may or may not happen. Thus, degree of proof required to show that there is a probability of outflow of resource is higher, as the effect is which is more likely to happen than not to happen as to where possibility is an event, which may or may not happen. Therefore, the assessee has to definitely show that there is every probability that an outflow of resources will be required to settle. " 6.3 The Hon'ble Court has further held that - "Thus, only those obligations arisen for past event existing independently on the future contract of the enterprise is recognized provision. " In this case also the assessee has failed to produce the past events before the AO to show that there is every probability that the expenditure will be incurred. At best, the case of the assessee is of possibility but not a case of probability. Thus, the assessee having failed to fulfil the triple test prescribed in Rotork Controls India Pvt. Ltd. Vs. CIT 3....
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....ollowing our reasoning while deciding ground number 5(b) of the appeal. 16.8 As regard to the relief of Rs. 2.67 crores allowed by the Learned CIT(A) , against which Revenue is in appeal in ground No. 7, we find that Learned CIT(A) has verified each and every provision to ascertain whether the liability had crystallised during the year under consideration. This factual finding has not been rebutted by the ld. DR before us. In absence of any such rebuttal to substantiate grounds of appeal by the Revenue, we do not find any error in the order of the Learned CIT(A) in deleting the part of disallowance of provision of mobilisation expenses amounting to Rs. 2.67 crores. The ground No. 7 of the appeal of the Revenue is accordingly dismissed. 17.1 The ground No. 7 of the appeal of the assessee relates to disallowance of provision for other expenses amounting to Rs. 1,61,25, 533/-sustained by the Ld. CIT(A). The ground No. 8 of the appeal of the Revenue relates to relief of Rs. 1.96 crores allowed against provision for other expenses. Both grounds being connected, same are adjudicated together. 17.2 The facts qua the issue in dispute are that the Assessing Office....
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....im made of Rs. 1,27,32,338. (c) Regarding the claim in respect of projects APSH-1A, 1B & 3 and Bhopal Hospital, a sum of Rs. 76 lakhs and Rs. 18,57,405 has been claimed but it has been submitted that the documents are being collected. As no evidence has been filed that the liabilities in respect of above two projects have been ascertained during the year, the same cannot be allowed. (d) The provisions were made in respect of corporate office expenses of Rs. 90 lakhs and in respect of SECL-DIPKA of Rs. 36,80,055. As per the details submitted, the liability arose during the year for both the expenditure claimed, hence, the same are allowed. To sum up, out of the claim of Rs. 3,57,49,612/-, the disallowance is upheld to the amount of Rs. 1,61,25,533 [Rs. 8,79,814 + Rs. 57,88,314 (Rs. 1,27,32,338 - Rs. 69,44,024) + Rs. 76,00,000 + Rs. 18,57,405] and the balance is deleted." 17.4 Before us, the learned counsel of the assessee reiterated the submission made before the Ld. CIT(A) and advanced arguments similar to arguments made with reference to ground No. 6 of this appeal of the assessee. 17.5 The ld. DR on the other hand relied on the order of the low....
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....see relates to interest received vide intimation under section 143(1) of the Act amounting to Rs. 25,56,813/-, which was not shown by the assessee as income in the year under consideration. 18.2 Brief facts qua the issue in dispute are that during the previous year relevant to assessment year consideration , the assessee received interest under section 244A of the Act vide intimation dated 30/07/2002 under section 143(1) of the Act for assessment year 2000-01, which was debited by the assessee under the loans and advances and was not credited to the profit and loss account forprevious year corresponding to assessment Year 2001- 02. On completion of the assessment proceedings for Assessment year 2000-01 in financial year 2003-04, the interest under section 244A was withdrawn. According to the assessee the aforesaid interest received under intimation u/s 143(1) was not final and therefore the assessee had neither credited the same in its books of accounts nor offered the same to tax. According to the Assessing Officer, the assessee was required to offer the said amount to tax following the mercantile system of accounting regularly employed by the assessee. The Ld. CIT(A) uph....
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.... only affects its quantification under certain circumstances and not the right of interest. The Hon'ble Supreme Court in the case of CIT vs. Shri Goverdhan Ltd. (1968) 69 ITR 675 (SC) has observed at p. 681 that once a debt is created, then the liability cannot be said to be contingent merely because it is to be quantified at later date. Under s. 244A, even the interest is quantified immediately whenever a refund is issued. In our view, the right to grant interest is absolute since existence of such right is not dependent on any event. For example, assessee is granted interest of Rs. 1,000 on the date of granting refund. Subsequently, under s. 244A(3), it is reduced to Rs. 600 by virtue of assessment under s. 143(3). Can it be said that right to interest did not accrue on the date of refund ? In our opinion, the right of interest came into existence on the date of refund by virtue of s. 244A(1) though its quantification may or may not vary depending upon the outcome of assessment." 18.6 However the Tribunal, further held that in case subsequently, the said interest is withdrawn, the said interest income can be rectified under section 154 of the Act. The relevant findin....
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....3-04 and decide the issue in accordance with law after providing adequate opportunity of being heard to the assessee. In the result, the ground No. 8 of the appeal is allowed for statistical purposes. 19.1 The ground No. 9 of the appeal of the assessee relates to interest income of Rs. 2,00,30,000/- from M/S National Building Construction Company (NBCC), which according to the Assessing Officer accrued to the assessee during year under consideration. 19.2 Before the Assessing Officer, the assessee contended that interest income from NBCC had not been taken into account on the basis of the accounting policy followed by the assessee and it was further stated that the interest amount was disputed and therefore it was not taxable pursuant to section 145 of the Act, however the Assessing Officer observed that in view of the mercantile system of accounting followed, the assessee was obliged to credit the said interest of Rs. 2,00,30,000/-in its profit and loss account. 19.3 The assessee in revised computation of income credited disputed interest income of Rs. 2,00,30,000/-in the profit and loss account and consequently claimed the said amount as deduction in vi....
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....s is wholly deductible. (v) Reliance has been placed on the case of CIT Vs. Bavala Gopalak Vivid Karya Kari Sahakari Mandali Ltd., 253 ITR 97 where it has been held that an amount which is subject matter of dispute cannot be said to have accrued to the appellant and can be taxed only when the dispute is settled. (vi) In the case of State Bank of Travancore Vs. CIT, 158 ITR 102, the principle of real income has been laid. (vii) Reliance has also been placed on the case of Anoop Engineering Ltd. Vs. CIT, 247 ITR 457 where it has been held that for the purpose of ascertaining whether income had accrued to the assessee one has to find out whether the assessee had a vested right to receive the income. (viii) Reliance has been placed on the decision of CIT Vs. Motor Credit Co. Ltd., 127 ITR 572 where it has been held that where no income has resulted , it cannot be said that the income has accrued merely on the ground that the assessee has been following the mercantile system of accounting. It has also been observed that the mercantile system of accounting can be only relevant only to determine the point of time at which tax liability is attracted and ....
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....nation, it can be said that the principal had become sticky during the year, hence, no interest is due to the appellant." 19.5 The Ld. CIT(A) distinguished the other decisions relied upon by the assessee and rejected the contention of the assessee observing as under: 14A3.1 In the letter dated 09-02-2005, the appellant has enclosed papers of the meeting held by COD or addressed to High Power Committee. As per the letter dated 14-11-2002 addressed to COD by the appellant, it is observed that after detailed discussion, the schedule for payment of dues by NBCC to IRCON was jointly agreed alongwith certain attendant conditions. As per the agreement, the amount was to be paid in three installments i.e. 31-01-2001 28-02-2001 and 31-03-2001 and the amount payable in each installment was 25%, 35% and 40% respectively of the amount due alongwith the interest. NBCC has informed IRCON vide letter dated 04-12-2000 that they are fully committed to honoring its liability towards IRCON in terms of appellate authority order dated 08- 10-1999 read with the order of the Secretary (Law) dated 18-04-2000 and it was further confirmed that NBCC should be able to liquidate their liabili....
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....erial on record. The Ld. CIT(A) distinguished the decision in the case of UCO Bank(supra) observing that in that case there has been no recovery for three consecutive accounting years. In fourth year onwards the interest charged was held to be not subjected to tax. The Ld. CIT(A) has observed that in the instant case the NBCC has not denied its liability to pay the principal and interest during the year. We agree with the observation of the Ld. CIT(A) and concur with the finding that decision in the case of UCO bank (supra) is not applicable over the facts of the instant case. The Ld. CIT(A) has brought on record facts in detail that the NBCC had agreed to liquidate the principal and interest due during the financial year relevant to the assessment itself and therefore under no circumstances the interest due could be said to be unrecoverable during the year under consideration. Before us the ld. counsel did not rebut any of the observation of the Ld. CIT(A) or submitted any documentary evidence in support of its claim except the claim that loan was sticky and disputed. In the case, the appellate authority against the award by the arbitrator, directed to refund entire amount of Rs. ....
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....s and therefore, there was no basis for debiting the same in profit and loss account. The Ld. Assessing Officer also rejected the contention of the assessee that provision for doubtful debt and doubtful advances pertain to asset side of the balance sheet. According to the Assessing Officer it was only manner of presentation in the balance sheet of doubtful debt and doubtful advances. The Ld. Assessing Officer pointed out that in the instant case, the provision for doubtful debt has been reduced from the total debtors and similarly provision for doubtful advances has been reduced from the total advances in the asset side of the balance sheet. Thus, instead of reducing provisions of doubtful debt and advances on the asset side of the balance sheet, the same provision of the doubtful debt and advances can be shown on the liability side of the balance sheet and the effect in the balance sheet shall remain the same. Thus according to the Assessing Officer, the manner of depiction is not of such meaningful significance and the said provisions remain unascertained liabilities. In support, he relied on the decision of the Madras High Court in the case of DCIT Vs Beardsell Ltd 244 ITR 256, ....
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....com 11 (Delhi-Trib.) In this order Hon'ble ITAT has discussed the issue in detail and has held that after insertion of clause(i) to Expln 1 to Section 115JB, addition of doubtful debts has to be made to total income to derive the book profit. Hon'ble I TAT has relied on the decision of jurisdictional High Court in the case of CIT v llpea Paramount P. Ltd.(supra). 3. Whirlpool of India Ltd. v UOI [2013] 31 taxmann.com 200(Delhi) In this case,in para 3 of the order Hon'ble Court has discussed the background of insertion of clause (i) to Expln 1 to Section 115JB. 4. Lusture Manufacturers P Ltd v ITO, Surat [2016] 73 taxmann.com 203(Ahmedabad-trib.) 5. CIT v Steriplate P Ltd [2012] 338 ITR 547(Punjab & Har.) 6. CIT v Yashaswi Leasing & Finance Ltd. [2012] 204 Taxman 602(Kar) 7. DCM sriram Consolidated Ltd v Asst CIT[2010] 39 SOT 203(ITAT - Delhi) 8. ITO v TCFC Finance Ltd. [2011 ] 131 ITD 103(ITAT- Mumbai) 9. Kamat Hotels India Ltd. V DCIT[2018] 89 taxmann.com 225(ITAT Mumbai)." 20.7 We have heard rival submission and perused the relevant material on record. We find that in the case of Philips Carbon Black Ltd (sup....
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.... No. 10 of the appeal of the assessee is allowed for statistical purposes. 21.1 The ground No. 11 and 12 of the appeal of the assessee relate to disallowance of claim towards provision for demobilisation amounting to Rs. 2,13,04,431/- in computing book profit under section 115JB of the Act and disallowance of claim towards provision for other expenses amounting to Rs. 1,61,25,533/-in computing book profit under section 115JB of the Act respectively. The ground No. 9 of the appeal of the Revenue is related to the relief granted by the Ld CIT(A) for considering the part provision of demobilisation and other expenses for computing book profit u/s 115JB of the Act in view of ascertained liability. 21.2 The Ld. CIT(A) in para 15A.1 of the impugned order has held grounds corresponding to the ground No. 6 and 7 of the present appeal as consequential in nature. The Learned Counsel of the assessee has also concurred with the finding of the Ld. CIT(A) that these issues are consequential to the ground No. 6 and 7 respectively of the present appeal. We have already dismissed the ground No. 6 and 7 of the appeal of the assessee in preceding paras, and held that those provision....
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.... earned from permanent establishment in foreign countries is liable to be excluded from the computation of book profit in view of the decision in the case of the bank of Tokyo-Mitsubishi UFJ Ltd vs. ADIT 152 1TD 796 (Del.), which has been affirmed by Hon'ble High Court of Delhi. When such income is not to be taxed as per DTAA, it cannot be brought to tax indirectly under the deeming fiction under section115JA Accordingly, this ground of appeal is decided in favor of the appellant." 22.6 The issue in dispute involved in the present ground of the appeal, being identical to the issue adjudicated by the Tribunal (supra) above, respectfully following the finding of the Tribunal (supra), we direct the Assessing Officer to exclude the income which is subject matter of dispute under this ground of the appeal from the ambit of the computation of book profit under section 115JB of the Act. The ground of the appeal is according allowed. 23.1 In ground No. 14 of the appeal, the assessee has disputed denial of exclusion of profit on sale of fixed assets amounting to Rs. 6,77,97,458/-in computing book profit under section 115JB of the Act. It was the contention of the assessee ....
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....e with Part II and Part III of Sch. VI of the Companies Act. The important thing to be noted is that while calculating the total income under the IT Act, the assessee is required to take into account income by way of capital gains under s. 45 of the IT Act. In the circumstances, one fails to understand as to how in computing the books profits under the Companies Act, the assessee-company cannot consider capital gains for the purposes of computing book profits under s. 115J of the Act. Further, under cl. (2) of Part II of Sch. VI to the Companies Act where a company receives the amount on account of surrender of leasehold rights, the company is bound to disclose in the P&L a/c the said amount as non-recurring transaction or a transaction of an exceptional nature irrespective of its nature i.e. whether capital or revenue. That, it would be inappropriate to directly transfer such amount to capital reserve [see Companies Act by A. Ramaiya, p. 1669 (Fourteenth Edn.]. Such receipts are also covered by cl. 2(b) of Part II of Sch. VI of the Companies Act which, inter alia, states that P&L a/c shall disclose every material feature, including credits or receipts and debits or expenses in res....
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....al on record. While adjudicating the ground No. 3, we have allowed the deduction under section 80HHC of the Act following the decision of the Tribunal in the case of the assessee for assessment year 2000-01. Further, as per the clause (iv) of explanation 115JB of the Act which was in operation during relevant period, the deduction under section 80HHC of the Act was to be reduced from the book profit as per the Companies Act for the purpose of computation of book profit under section 115JB of the Act. The relevant provision is reproduced as under: "Omitted by the Finance Act, 2011, w.r.e.f. 1.4.05. Prior to their omission, clauses (iv), (v) and (vi) read as under : (iv). The amount of profits eligible for deduction under section 80HHC, computed under clause (a) or clause (b) or clause (c) of sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in that section; or (v). ..................... (vi). ....................... 24.6 As the assessee was entitled for reducing the deduction under section 80HHC out of the book profit during relevant period, we direct the Assessing Officer to....
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....quired conditions for eligibility of deduction in dispute. 26.6 On the other hand, the Ld. Counsel of the assessee submitted that deduction under section 80 HHB(A) of the Act was claimed as alternative to the deduction under section 80IA of the Act. He submitted that the Tribunal in ITA No. 2596/Del/2004 for assessment year 2000-01 has already allowed the claim of deduction under section 80IA of the Act, and thus the assessee is not pressing for the deduction under section 80HHB(A) of the Act. 26.7 We have heard the rival submissions and perused the relevant material on record. Before the Ld. CIT(A), the assessee claim deduction under section 80HHB(A) of the Act as alternative claim that if the deduction under section 80IA of the Act is denied to it, then the assessee might be allowed deduction under section 80 HHB(A) of the Act. Since the assessee has already been allowed deduction under section 80IA of the Act by us while adjudicating the ground No. 2 of the appeal of the assessee, this alternative claim of deduction under section 80HHB(A) cannot be allowed in addition to the claim under section 80IA of the Act. The assessee has also not insisted for this claim ....
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....f the same against the income of the foreign projects. 28.3 The Ld. DR, on the other hand, submitted that when the main claim of the assessee has been allowed by the Tribunal in earlier years, the assessee is not entitled for deduction under section 80 HHB of the Act during the year under consideration. 28.4 We have heard the rival submission of the parties. We find that this claim of deduction under section 80HHB was made only as alternative claim before the Ld. CIT(A). Since we have already allowed the main claim of the assessee under section 80HHC of the Act while adjudicating the ground No. 3 of the appeal of the assessee, and thus this claim of deduction under section 80HHB is denied to the assessee. Before us, the assessee has also not insisted for allowing this claim. Accordingly, the ground of the appeal of the Revenue is allowed. 29.1 The ground No.4(four) of the appeal of the Revenue relates to deduction of Rs. 12.51 lakhs under section 35DDA of the Act being 1/5th amount of Rs. 62,54,482/-paid to the employees under the Voluntary Retirement Scheme (VRS) as applicable in the assessee company. The Ld. Assessing Officer disallowed the claim in vie....
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....ry retirement scheme and its ratification by the Board of Directors. Taking all the above facts into consideration, no disallowance is called for and the addition made by the AO is deleted." 29.4 We find that all the requisite details of the voluntary retirement scheme and the expenses incurred of Rs. 62, 54, 482/- towards said scheme have already been filed by the assessee and thus the contention of the Ld. DR that no details of the employee resigned were filed, cannot be made a basis for disallowance of the claim of the assessee. In our opinion, the finding of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find any error in the same. The ground of the appeal of the Revenue is dismissed. 30.1 The ground No. 5 of appeal of the Revenue relates to deduction of corporate office expenses by the Assessing Officer while granting exclusion of income from foreign projects under DTAA. 30.2 The assessee has computed income earned under the DTA agreement from Bangladesh and Malaysia at Rs. 2,96,13,866/- and Rs. 73, 84, 03, 831/-respectively. According to the Assessing Officer those incomes have been determined without deducting the corporate o....
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.... the decision of the Delhi Tribunal in the case of telecommunication Consultant India Ltd versus DCIT in ITA No. 333/Del/1990. 30.6 We have heard rival submissions and perused the relevant material on record. The income of the foreign projects through their permanent establishment, is chargeable in the respective country and in such a situation, reducing of promotional corporate office expenses in working out the income of the permanent establishment in the foreign country excludable while computing income chargeable to tax in India, cannot be justified. We do not find any error in the order of the Ld. CIT(A) in following the order of the Tribunal in the case of Telecommunication Consultant India Ltd. (supra), which is a binding precedent. Accordingly, the finding of the Ld. CIT(A) on the issue in dispute is upheld. The ground of the appeal of the Revenue is accordingly dismissed. 31.1 The ground No. 10 of the appeal of the Revenue relates to the provision of gratuity allowed while computing book profit u/s 115JB by the Ld. CIT(A). According to the Ld. AO, it is unascertained liability, whereas the Ld. CIT(A) held the provision of the gratuity as ascertained liabi....
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....AT Delhi decision in the case of GD Rathi Steel Ltd. and is allowable expenditure. Therefore, the addition made on this account for computing the income under the MAT provision is deleted." 31.2 Before us the ld. DR relied on the order of the AO, whereas the Ld. Counsel of the assessee relied on the order of ld. CIT(A) and further relied on the following decisions in support of the claim that provision based on actuarial valuation amounts to ascertained liability: (i). CIT vs. IIpea Paramount P. Ltd. (2010) 336 ITR 54 (Del) (ii). Eastern India Powertech Ltd. V Addl. CIT (2013) 32 taxmann.com 11 (Del. Trib.) 31.3 We have heard rival submissions of the parties. The Ld. CIT(A) has allowed the issue in dispute in view of the decision of the Tribunal in the case of GD Rathi Steels Ltd Vs DCIT 56 ITD 103, wherein it is held that gratuity which has been actually valued is an ascertained liability. We don't find any error in the finding of the Ld. CIT(A) on the issue in dispute following a binding precedent on the issue. Accordingly, we uphold the finding of the Ld. CIT(A) on the issue in dispute and dismiss the ground No. 10 of the appeal of the Revenue....
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.... for the purpose of Section 115JB of the Act. (iii) Reliance has been placed on the decision of the following case laws: (a) J.K. Cotton Spinning & Weaving Mills Co. Ltd. Vs. ACJT, 60 ITD 99 (All); (b) SRF Ltd. Vs. ACIT, 47 ITD 504 (Del); (iv) The CIT(A) while passing the appellate order in the appellant's own case for the AY 2000-01 has deleted the addition. 18.3 Taking into consideration that the provisions were amended from retrospective effect by the Finance Act, 2002 w.e.f. 01-04-2001, the claim allowable to the appellant as per the appellant's own admission is only Rs. 87,90,316 as against the claim made by the appellant of Rs. 9,77,00,872 as per the provisions at the time of filing of the return. The AO is directed to verify that the sum of Rs. 87,90,316 relates to provision or reserve created before first day of April 1997 and if found to be correct, the same should be allowed." 32.3 Before us the Ld DR relied on the order of Assessing Officer, whereas the Ld counsel of the assessee submitted that issue is already decided in favour of the assessee in its own case in assessment year 2000-01 by the Ld. CIT(A) and no appeal....
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....finding of the ld. CIT(A) are set aside and interest charged by the learned Assessing Officer under section 234D is restored. The ground of the appeal of the Revenue is accordingly allowed. 35. In the result, the appeal of the assessee is allowed partly for statistical purpose whereas the appeal of the Revenue is partly allowed. 36. Now, we come to the remaining appeals of assessee for A.Yrs. 2002-03 and 2003-04 and appeal of the Revenue for A.Y. 2003-04. The grounds raised by the assessee in its appeals for both the years read as under : Grounds raised by assessee in appeal for A.Y. 2002-03 1(a) That on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) [here-in-after referred to as 'CIT(A)'], was not justified in upholding the disallowance of the appellant's claim for deduction of depreciation amounting to Rs. 18,30,937/- on the value of machinery spare parts capitalized during the year. 1(b) That on the facts and in the circumstances of the case and without prejudice to ground no. 1(a) taken here in above, the Ld. CIT(A) grossly erred in holding that although depreciation is allowable on machineries....
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....d in upholding the disallowance of the claim of the appellant towards provision for demobilization amounting to Rs. 20,32,836/- out of the total claim for Rs. 2,95,17,122/-. 4(b) That on the facts- and in the circumstances of the case and without prejudice to ground no. 4(a) taken here in above, the Ld. CIT(A) completed the appellate proceedings without affording reasonable opportunity to the appellant for furnishing all the relevant documents and hence the impugned issue may be set aside for allowing the same on merits. 5(a) That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the disallowance of the claim of the appellant towards provision for maintenance expense amounting to Rs. 50,54,000/- out of the total claim for Rs. 87,33,107/-. 5(b) That on the facts and in the circumstances of the case and without prejudice to ground no. 5(a) taken here in above, the Ld. CIT(A) completed the appellate proceedings without affording reasonable opportunity to the appellant for furnishing all the relevant documents and hence the impugned issue may be set aside for allowing the same on merits. 6(a) That on the....
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.... 2003-04. 9.0 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the disallowance of Rs. 13,37,89,617/- towards provision for bad & doubtful debts and Rs. 1,64,73,633/- towards provision for bad & doubtful advances for computing the book profits for the purpose of section 115JB of the Act. 10.0 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the disallowance of the claim of the appellant towards provision for demobilization amounting to Rs. 20,32,836/- out of the total claim for Rs. 15,93,46,597/- for computing the book profits for the purpose of 115JB of the Act. 11.0 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the disallowance of the claim of the appellant towards provision for maintenance expenses amounting to Rs. 5,53,92,513/- out of the total claim for Rs. 7,46,71,237/- for computing the book profits for the purpose of 115JB of the Act. 12.0 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the disallowance of the claim of the app....
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..... CIT(A) was not justified in disallowing the claim of the appellant for deduction u/s 80IAin respect of income earned from the business of development of infrastructure facilities amounting to Rs. 13,19,72,609/-. 2(b) That on the facts and in the circumstances of the case, and without prejudice to ground No. 2(a) taken here in above, the Ld. CIT (A) grossly erred in considering that the appellant's role in executing various infrastructure projects is that of a contractor which cannot be equated to the business of developing the infrastructure facilities and there by disallowing the claim for deduction under section 80IA of the Act. 2(c) That on the facts and in the circumstances of the case, and without prejudice to ground No. 2(a) and 2(b) taken here in above, the Ld. CIT (A) grossly erred in not considering that the appellant is an enterprise and not a person, who executes a work contract with an undertaking and thereby disallowing the claim for deduction u/s 80IA of the Act. 2(d) That on the facts and in the circumstances of the case, and without prejudice to ground No. 2(a) and 2(b) taken here in above, the Ld. CIT (A) was not justified in not ta....
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.... 6(b) That on the facts and in the circumstances of the case, and without prejudice to ground no. 6(a) taken here in above, the Ld. CIT (A) grossly erred in holding that principal and interest amounts due from a Government Company cannot be considered to be doubtful or sticky unless the said company has gone into liquidation. 7(a) That on the facts and in the circumstances of the case, the Ld. CIT (A) was not justified in upholding the disallowance of the claim of the appellant towards provision for demobilization and other expenses amounting to Rs. 99,12,075/- utilized during the year although the same has already been taxed in earlier years under the normal provisions of the Act. 7(b) That on the facts and in the circumstances of the case and without prejudice to ground no. 7(a) taken here in above, the Ld. CIT (A) completed the appellate proceedings in haste without affording reasonable opportunity to the appellant for furnishing all the relevant documents and hence the impugned issue may be set aside for allowing the same on merits. 8(a) That on the facts and in the circumstances of the case, the Ld. CIT (A) was not justified in not allowing asse....
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....rtained liabilities in the hands of the appellant. The Ld. Officers however, not accepting the contention of the appellant rejected the claim of the appellant on the ground that the said provision is on account of liability other than ascertained and/or accrued liability and hence, added back the same while computing the book profits for the purposes of section 115JB of the Act. 11.0 That on the facts and in the circumstances of the case the Ld. CIT (A) was not justified and grossly erred in disallowing deduction from income earned from permanent establishment in foreign countries and not chargeable to tax under Double Taxation Avoidance Agreement amounting to Rs. 84,82,65,351/- in computing the book profit for the purpose of Section 115JB of the Act. 12.0 That on the facts and in the circumstances of the case, the Ld. CIT (A) was not justified in upholding the disallowance of the claim of the appellant amounting to Rs. 1,90,11,891/- on account of the profit on sale of fixed asset in computing the book profit for the purpose of Section 115JB of the Act. 13.a) That on the facts and in the circumstances of the case, the Ld. CIT (A) grossly erred in not cons....
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....800, Rs. 1,28,77,257/- & Rs. 4,30,61,843/- on account of the provision for demobilization, provision for maintenance and other expenses respectively. 37. Adverting to the appeals of the assessee for A.Y. 2002-03 and 2003-04, grounds Nos. 1(a) and 1(b) for A.Y. 2002-03 and 1(a), 1(b) & 1(c) for A.Y. 2003-04 are covered by our decision on ground Nos. 1(a) & 1(b) in appeal of assessee for A.Y. 2001-02, which we have dismissed as per our discussion made herein above. Accordingly, these grounds of assessee's both the appeals are dismissed. 38. Similarly, grounds Nos. 2(a), 2(b) & 2(c) raised by assessee for A.Y. 2002-03 and 2003-04 are covered by our decision on grounds Nos. 2(a) &2(b) in appeal of assessee for A.Y. 2001-02. Accordingly, ground No. 2(a),&2(b) of assessee's appeals for both these years are allowed. As regards ground No. 2(c) was raised without prejudice to ground no. 2(a) and 2(b) only and not required to be adjudicated , when we have already allowed ground no. 2(a) and 2(b) of the appeal. 39. Grounds Nos. 3(a) and 3(b) in both these appeals of the assessee are covered by our decision on grounds Nos. 3(a) & 3(b) in appeal of assessee for A.Y. 2001-02. Accordingl....
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....istical purposes. Accordingly, these grounds of appeal for A.Y. 2002-03 are also allowed for statistical purposes in terms of our decision on grounds Nos. 8(a) and 8(b) in appeal for A.Y. 2001-02. Similarly, grounds Nos. 7(a) & 7(b) raised in appeal for A.Y. 2003-04are covered by our decision given on ground Nos. 6(a) and 6(b) of assessee's appeal for A.Y. 2001-02, whereby the identical claim of assessee has been dismissed. Accordingly, these grounds for A.Y. 2003-04 are also dismissed. 45. Grounds Nos. 8(a) & 8(b) in appeal for A.Y. 2002-03 are similar to ground Nos. 9(a) and 9(b) of assessee's appeal for A.Y. 2001-02, which have been dismissed. Accordingly, these grounds of assessee for A.Y. 2002-03 are also dismissed. 46. As regards ground No. 8(c) of assessee's appeal for A.Y. 2002- 03, which has been taken without prejudice to ground No. 8(a) and 8(b) is concerned, we are of the opinion that the assessee is not entitled to deduction of interest on loans to NBCC as already held by us. Accordingly, this ground no. 8(c) of the appeal for AY 2002- 03 is dismissed. 47. The ground No. 8(a) and 8(b) in assessee's appeal for A.Y. 2003-04, pertain to interest u/s 244A of the A....
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....lar to ground No. 14 of assessee's appeal for A.Y. 2001-02. Since we have rejected the respective claims of the assessee in A.Y. 2001-02, the ground Nos. 12 of assessee's appeals for A.Y. 2002-03 and 2003-04 are dismissed. 53. Ground No. 13 of assessee's appeal for A.Y. 2002-03 is covered by our decision given on ground No. 13 of A.Y. 2001-02. Accordingly, this ground of appeal of the assessee is dismissed. 54. Ground No. 13(a) and 13(b) of assessee's appeal for A.Y. 2003- 04 pertain to disallowance of provision of Rs. 99,12,075/-. The assessee's claim that relevant amount of provisions were disallowed in assessment year 2001-02 and 2002-03, out of which the assessee utilised in the previous year relevant to assessment year 2003-04, the amount of Rs. 20,15,350/-and Rs. 78,96,725 from the provision for demobilisation expenses and other expenses respectively totalling Rs. 2,99,12,075/-. We find that the identical issue raised by the assessee before the Ld. CIT(A) in assessment year 2002-03 has been restored to the assessing officer for verification in para 16.3 of the order of the Ld. CIT(A) for assessment year 2002-03. In our opinion, the issue needs verification at the end of....