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2019 (11) TMI 270
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....5/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 disallowing the claim of the appellant for deduction u/s 80IA in respect....
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.... 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) for the assessment year 2000-01 amounting to Rs. 25,56,813/- 8(b) That on the facts and in the circumstances of the case and with....
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....ofit 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 fulfill the requisite requirements of law, the CIT(A) erred in granting the aforesaid relief to the assessee. 2. On the facts and in the circumstances of the case and in law, the CIT(A)has erred in ....
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....enditure 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 law, the CIT(A) has erred in partially setting aside the issue relating to disallowance on account of provision written back and credited to P&L Account in computing the book profit for the purpose of section 115JB, ignoring that CIT(A) does not have the p....
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.... 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 claimed depreciation amounting to Rs. 24,41,250/-at the rate of 25% on the Machinery spares capitalised. Both the Assessing Officer as well as the Ld. CIT(A) disallowed the claim of depreciation of the assessee on the 'Machinery spares'. 7. Before us, the Ld. counsel of the....
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....n, 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 provisions of AS-2 and AS-10 that, the opinion of the Counsel of the ICAI in respect of treatment of machinery spares is briefly that; machinery spares which are not specific to any fixed asset and can be used generally should be treated as part of inventory and charged to P&L a/c as and when they ar....
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....ovisions 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 accounting which under the Act the Revenue is required to look at for computing income of the assessee chargeable under the head "Profits and gains from business". The submission of the learned counsel for the Revenue that the accounting treatment to be meted out to a transaction in accordance with the Accounting Standards....
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....elied 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 applicability of the principles of accountancy by the Courts has also found favour in the judgments of the Supreme Court in the cases of CIT vs. Indo Nippon Chemicals Co. Ltd. (2003) 182 CTR (SC) 291 : (2003) 261 ITR 275 (SC) at p. 277(DE) and CIT vs. U.P. State Industrial Development Corporation (1997) 139 CTR (SC) 267 : (1997) 225 ITR 703 (SC) a....
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....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 from the above that the accepted accountancy rule for determining the cost of fixed assets is to include all expenditure necessary to bring such assets into existence and to put them in working condition. In case money is borrowed by newly started company which is in the process of constructing and erecting its plant, the interest incurred before the commencement of pro....
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....9) 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). 11.5 Thus, according to the above decision of the Hon'ble High Court in the case of Insilco Ltd (supra), prime requirement is that the machinery spares should be integral part of the fixed asset or it should be of emergency nature. The Hon'ble Delhi High Court has further laid down following requirements for considering machinery spares for capitalisation: (i) the spares should be in the nature ....
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....xpenditure 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 enduring benefit to the assessee. In absence of satisfying the requirement for constituting a machinery spare as capital expenditure as laid down in the above decisions of the Hon'ble Supreme Court, expenditure incurred on machinery repairs can not be allowed as capital expenditure and consequent depreciation claimed also cannot be allowed. Thus the ground number 1(a) of the appeal is dismissed. 11.10 The 2nd issue raised is can the depreciation be allowed on machin....
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....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; (c) Deduction under section 80IA is admissible to an assessee who is engaged in developing infrastructure facility as a whole, when such a facility belongs to the assessee. At no point of time such a facility belonged to the assessee; (d) Receipt on account of contracts have been categorised as work receipts and on such receipts, TDS has been deducted, which further shows that the payment received by the assessee are as a contactor only; (e) The prominent gains of the assessee cannot be said to be derived from the eligible business. 12.4 Befor....
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....t 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 respect of income derived from the development of infrastructure facilities. Explanation inserted below section 80IA(13) does not prevent developers in claiming deduction u/s 80IA(4). Similarly showing the receipts as work receipts in the books of accounts of the appellant alone cannot determine the character of the appellant which in our opinion was that of development. The argument of revenue that infrastructure facility should be owned by the appellant is also misplaced in view of ITO vs. Cable Constructions 354 ITR 13 (Guj.) and various decisions relied upon by the Ld. Counsel for the appellant. W....
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....ction 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 in favour of the assessee by the order of the Tribunal in assessment year 2000-01. 13.5 The Ld. DR on the other hand relied on the order of the lower authorities. 13.6 We have heard the rival submissions and perused the relevant material on record. We find that the Tribunal in ITA No. 2596/12/2004 for assessment year 2000-01 has held as under: 4.4 We have considered the arguments advanced by the parties on the issue raised in Ground No.2 in the matter of deduction u/.s 80HHC.We have gone through the agreement enclosed in the paper book and various clauses and various other pages of the paper book to which our attention....
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....e 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 organisations, in addition to donation of Rs. 1,00,00,000/- to the Prime Minister Relief Fund: 1 Prime Minsister Relief Fund 1,00,00,000/- 2 Railway Board Sports Association, New Delhi 50,000/- 3 Railway Ministers Welfare Fund, New Delhi 5,00,000/- 4 Railway Women's Welfare Central Organization New Delhi 2,50,000/- 5 Railway Women's Welfare Central Organization Chennai 10,000/- 6 Andhra Pradesh Road Project, Huzurabad 835/- 7 Malaysia Loco & K.L. Central 1,22,067/- 14.3 The claim of donation made to Prime Minister relief fund has been subsequently allowed by the Assessing Officer in terms of section 80G of the act on the basis of the receipt....
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....cuted, 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). The ground No. 6 of the appeal of the Revenue, pertains to relief of Rs. 63,06,235/-allowed by the Ld. CIT(A) out of the disallowance of prior period expenses. Both the grounds being connected with the same issue, these are adjudicated together. 15.2 The Assessing Officer disallowed prior period expenses of Rs. 2,43,27,000/-stating that those did not pertain to the previous year relevant to the current assessment year and there is no provision in the Income-Tax Act to allow deduction of prior period expenses. The Ld. CIT(A)partly confirmed the disallowance to the extent of Rs. 1,80,20,765/- , holding that expenditure has not crystallised in the year under consideration and no evidence filed. 15.3 We have heard rival submissions ....
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....ior 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. 24,23,120 has been claimed vide letter dated 18-01-2005. As per the details submitted on page No.7, it is observed that only expenses of Rs. 1,24,352/-, Rs. 12,279 and Rs. 77,700 was ascertained during the year and for all the other expenditure claimed, the liability has not ascertained during the year. The major expenditure claimed is in respect of oil canalization commission as per the note submitted alongwith the letter dated 25-01-2005 at page No.50. On going through the note, it is observed that 2% payment was required to be made to agencies such as MMTC & STC during the year 1999-00 which was not provided in the FY 1999- 00. It has been explained by the appellant counsel as the oil was lifted in the subsequent FY i.e. 2000-01, the liability was also claimed in the AY 2001-....
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....im 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 submitted that this amount represents expenditure not accepted by the client for reimbursement in a costplus contract. He further submitted that as the loss was quantified and same was provided in the earliest available accounts and moreover, the above letter dated 18.04.2001 is with reference to the letter dated 1/02/2001 and relates to work done till 31/03/2000. 15.8 As evident from the facts on record , we find that the clients of the assessee have rejected the claim of reimbursement of the expenses in previous year relevant to subsequent assessment year, thus, it cannot be said that expenditure crystallized during the year under consideration. The assessee has failed to substantiate before us that the said expenditure was crystallised during the year under consideration. Thus, we do not find any error i....
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....d 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 bill in 1997- 98 and again on receipt of retention money in the year 1999 and this error was detected in the previous year relevant to the assessment year 2001-02 and therefore same was charged to expenses under the head prior period expenses. However, in support of the above explanation, no documentary evidences have been filed either before the Ld. CIT(A) or before us, accordingly the contention of the assessee are not accepted and disallowance sustained by the Ld. CIT(A) is therefore confirmed. The ground No. 5(a) of the appeal is accordingly dismissed. 15.12 In ground number 5(b) of the assessee, the Ld. counsel submitted that the Ld. CIT(A) has decided the issue without affording reasonable opportunity to the assessee for furnishing all the relevant documents and hence issue might be set aside for considering the same on t....
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....id 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 quantified, the liability had to be incurred. According to the assessee, the provision represented definite obligation to be discharged by the assessee. The learned Assessing Officer, however held that provision is an estimated liability and not quantified exactly. The learned Assessing Officer observed from past history of the case that the assessee regularly make such provisions and after a gap of three to four years, it writes back a portion of the said provisions, which itself indicates that the expenses were claimed purely on estimate basis. The learned Assessing Officer accordingly, disallowed the expense holding the same as purely estimated, adhoc and not crystallised during the relevant previous year. 16.3 The Ld. CIT(A) after taking into consideration submission of the assessee, sustained disallowance amounting to Rs. 2,13,04,000/ + Rs. 431, in view of no evidences submitted to substantiate the claim. Th....
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....d 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 fact that in the earlier years, the addition has been deleted by the CIT(A) and the appellant has also certified that no appeal has been filed by the department before the ITAT. Taking into consideration the above facts, the appellant was directed to file the details to verify whether the liability arose during the year or not. 13.3.1 The appellant counsel filed details vide letter dated 17-01- 2005, 18-01-2005 and 25-01-2005. It is observed from the details filed of Rs. 4,80,48,569/-, the liability arose during the year except three of the claims which are discussed below: (a) It is observed that the appellant has claimed a sum of Rs. 3,04,000 in respect of Delhi - Mathura Road Project. On going through the details enclosed by the appellant, it is observed that the project was completed in Haryana on 26-12-1997 and in UP on 20- 02-1998. The defect liability period was upto 26-12-1998 for Haryana and 20-02-1999 for UP. No explanation has been given why after the completion....
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.... 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 that the estimate does not reflect true and correct profit, ld. counsel of assessee relied on the decision of the Hon'ble Supreme Court in the case of CIT Vs Woodward Governor India P Ltd(2009) 312 ITR 254 (SC). He also submitted that similar disallowance made byAssessing Officer has been deleted by the Ld. CIT(A) in assessment year 1995- 96 and no appeal has been preferred by the Revenue against the said deletion. 16.5 On the contrary, the Ld. DR relied on the order of the lower authorities and filed written submission, which is reproduced as under: "6.1 The assessee has claimed expenditure on account of provision for demobilization. The AO has held in para 13.3 on page 18 of his order that the provisions made by the assessee are nothing but estimated liability as the assessee was no able to exactly quantify the liabilities on this account. On perusal of list of provision of mobilization expenses on page 274 of assessee's PB , it may be noted that provision of 1.22 crores has been made in respect of Malaysia ....
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....y. Thus, the assessee having failed to fulfil the triple test prescribed in Rotork Controls India Pvt. Ltd. Vs. CIT 314 ITR 62 (SC), is not entitled to claim deduction on account of provisioning of expenses. 6.4 Reliance is placed on the following decisions also- (i) Oswal Agro Mills Ltd. Vs. CIT [2014] 363 ITR 486 - "A provision can only be recognized when the obligation has already fructified." (ii) Grace Shelter Vs. ACIT [2019] 104taxmann.com 133 (iii) Taparia Tools Ltd. Vs. JCIT [2003] 260 ITR 102 (iv) DCIT Vs. Fag Bearing India Ltd. [2008] 115 ITD 53 (v,) CIT Vs. Aman Khera [2016] 387 ITR 33 6.5 The decisions relied upon by the assessee, as submitted in case law compilation, are mainly in respect of provision for warranty. In those cases, the Courts have observed that there has to be scientific method/historical trend to substantiate the claim for provision on account of warranty. In the instant case, assessee has claimed deduction on account of merely estimation/possibility of expenses and provisioning of expenses is not based on any scientific working/solid material. Hence, claim of the assessee is not admissible. 16.6 We have heard rival submissions ....
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....ssue in dispute are that the Assessing Officer observed "provision for others"of Rs. 6,43,13,000/-debited in the profit and loss account and out of which Rs. 3,57,49,802/-was not considered for disallowance by the assessee. The Assessing Officer observed that the assessee company has been regularly making such provision and after a gap of three to four years, it writes back a portion of the said provisions. According to the Assessing Officer the provision is purely estimated, ad-hoc and not crystallised in the relevant financial year and thus, he disallowed provision of Rs. 3,37,49,802/-. 17.3 The Ld. CIT(A) after considering the detailed submission filed by the assessee, restricted the disallowance to Rs. 1,61,25,533/-. The relevant part of the finding of the Ld. CIT(A) is reproduced as under: 13.3.4 The appellant counsel filed details and submissions vide its letter dated 17-01-2005 and 25-01-2005. The claim of the appellant are discussed below: (a) On going through the submissions made, it is observed that the appellant counsel has claimed a sum of Rs. 8,79,814 on account of the project NCLKBJ Annapara for the theft of rails at the project site. On going through the det....
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....authorities and submitted as under: "7.2 The submission in para 6 above, made in respect of provisioning of mobilization expenses, is reiterated in respect of the above ground of appeal also. The assessee has not been able to substantiate its case before the A.O as to how the provision of expenses was ascertained liability and was based on specific working. Onus has not been discharged by the assessee. It may be noted that on page 322, list of provision of other expenses is given. Last item is of Rs. 90.00 Lakh. On page 324 of PB, 3rd item is regarding Rs. 90 lakh. It is seen that in the Board meeting on 25.04.2001, it was decided to award employees with a gold coin and total expense for the same was admitted at Rs. 1.80 crores. Half of the said estimated expense-Rs. 90 Lakhs was claimed as provision in AY 2001-02 whereas Board meeting took place in A Y. 2002-03. Attention is drawn to page 326 of PB, in which it was submitted before the CIT(A) that in respect of prior period expenses, provision for demobilization and provision for other expenses were still being compiled. No substantiating documents were filed before the A.O, Ld. CIT(A) and before the Hon'ble ITAT in support of ....
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....me for the year under consideration on the ground that interest was actually received by the assessee and it was due to the assessee in the year in consideration. 18.3 Before us, the Ld. Counsel of the assessee relied on the decision of the special bench of the Tribunal in the case of Avada Trading Company (P) Ltd Vs ACIT (2006) 100 ITD 131 wherein it is held that if interest under section 244A granted under section 143(1) is reduced on account of subsequent proceeding, the interest originally granted would be substituted by the reduced amount. Accordingly, the learned counsel submitted that in the present case, the interest originally granted has been reduced to Nil on completion of the assessment proceeding under section 143(3) of the Act, thus, no interest income should be considered as chargeable to tax in the instant year. 18.4 The ld. DR on the other hand relied on the order of the lower authorities. 18.5 We have heard rival submission of the parties and perused the relevant material on record. The issue in dispute in the case is covered by the decision of the special bench in the case of Avada Trading Company (P) Ltd. (supra). The Tribunal (supra) clearly held that ....
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....prehended by assessee's counsel that assessee would be without remedy if the interest is reduced by virtue of assessment under s. 143(31. This apprehension, in our opinion, is unfounded. If interest is reduced by virtue of sub-s. (3) of s. 244A on account of assessment under s. 143(3), the interest granted in earlier year gets substituted and it is the reduced amount of interest that would form part of income of that year. Thus, it would amount to mistake rectifiable under s. 154 of the Act. In our opinion, if the basis, on which income was assessed is varied or ceases to exist, then such assessment would become erroneous and can be rectified. This can be explained with an example. For instance, land in a village belonging to various persons is acquired by Government for some development works and the compensation is awarded by the Collector with interest, if any. But one of the land holders challenges the acquisition proceedings in the High Court and later on succeeds as the acquisition is declared illegal. By virtue of such High Court order, such compensation has to be returned and Government will have to restore the land to the villagers. Therefore, if capital gain has been ....
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....erein it is held that interest arising out of sticky and disputed loans are fully deductible. This revised claim was not accepted by the Ld. Assessing Officer on the ground that mandated period for revising return of income under section 139(5) of the Act had already expired and otherwise also, the revision of that nature was not covered under the provision of section 139(5) of the Act. Accordingly the Assessing Officer added the sum of Rs. 2,00,30,000/-to the income of the assessee. The assessee made detailed submission before the Ld. CIT(A), who has summarised the submission of the assessee as under: 14A.2 The various submissions made by the appellant counsel vide letter dated 04-01-2005 and letter dated 09-02-2005 during the course of appellate proceedings are summarized below: (i) The appellant entered into a contract with National Building Construction Corporation (NBCC) Ltd. for purchase of 7500 Sq. Mtr. of office space with parking and storage spare in NBCC Tower for Rs. 17 crores vide agreement dated 22-09-1989. A dispute arose between the appellant and NBCC. (ii) The committee on disputes (COD) referred the matter to arbitration in August 1996. The arbitrator awar....
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....een maintaining his account on the basis of mercantile system of accounting. (ix) It has been submitted in the instant case that the interest receivable by it is clearly in dispute and the appellant has since filed a petition before the Hon'ble Delhi High Court For recovery of the said principal and interest will depend upon the outcome of the decision of the Hon'ble High Court. (x) In the case of CIT Vs. Pondichery Industrial Promotion Development Investment Corporation Ltd., 254 ITR 748, it has been held that - 'having regard to the decision of the Apex Court, it cannot be said that it was impermissible for the assessee here to have followed a mixed or hybrid system of accounting and that while following the mercantile system, it was permissible for it to adopt a cash system of accounting so far as interest and rent were concerned'. (xi) Through its letter dated 25-03-2004, the appellant merely substantiated its claim by relying upon a Supreme Court judgment and no revised claim was filed by the appellant. In any case, the fresh claim should have been entertained by the AO has been held in the appellant's own case for the AY 2000-01 and 1994-95 by the CIT(A)." 19.4....
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.... by NBCC was getting delayed and they were making all efforts to pay the balance amount to IRCON by making alternate arrangements at the earliest possible. Thus, taking into the above facts of the case, the interest has definitely accrued to the appellant on the amount payable by NBCC and NBCC has also not denied its liability to pay the amount. In fact, NBCC has agreed to liquidate the principal and interest due during the financial year relevant to the assessment year itself and under no circumstances it can be said that the interest was not due to the appellant during the year or the principal amount has become unrecoverable during the year. As already mentioned above, NBCC is a Government company and it is not that it has gone into liquidation and the recovery of principal and interest has become doubtful. In the FY 2000-01 relevant to the assessment year, the interest has become due to the appellant and neither the liability to pay the same has been denied by the NBCC. Therefore, under no stretch of imagination, it cannot be said that interest has not become due to the appellant or the accrued interest is not the real income of the appellant. Merely filing of a suit for recove....
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....gh Court, it cannot be said that interest was not accrued to the assessee. The onus was on the assessee to establish that loan was unrecoverable during the year under consideration and no such evidences having been filed either before the Ld. CIT(A) or before us. In view of the facts and circumstances, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground No. 9(a) and 9(b) of the appeal of the assessee are accordingly dismissed. 20.1 The ground No. 10 relates to disallowance of deduction of provision for doubtful debts (Rs. 2, 48, 73,000/-) and doubtful advances ( Rs. 53,98,000/-) for computing book profit under section 115JB of the Act. 20.2 The Assessing Officer on perusal of computation of book profit under section 115JB of the Act , observed that the assessee failed to add back the provision for bad and doubtful debts amounting to Rs. 2,48,73,000/-and provision for doubtful advances of Rs. 53,98,000/-. It was submitted by the assessee that the provisions were ascertained liability and, therefore, it was not required to added back in computing the book profit. The assessee explained that provisions f....
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....te to the computation of book profit under section 115JB of the Act. 20.4 Before the Ld. CIT(A) the assessee filed detailed submission. The Ld. CIT(A) distinguished the decision in the case of Echjay forging private limited (supra). The Ld. CIT(A) relying on the decision in the case of the CIT versus Beardsell Ltd. ( supra) and the Tribunal third member decision in the case of steel authority of India Ltd (supra), upheld the addition in dispute made by the Assessing Officer. 20.5 Before us the Ld. counsel of the assessee submitted that said provisions for bad and doubtful debt /advances were reduced from the debtors/advances and therefore such provisions represented actual write off and thus clause (i) of explanation to sec 115JB does not apply in the facts of the case. The Ld. counsel in support of his contention relied on following decisions: (i) CIT versus Yokogawa India Ltd (2012) 204 Taxman 305 (kar). (ii) Phillips Carbon Black Ltd versus ACIT (ITA No. 741/Kol/2012) (iii) Murigappa Morgan Thermal Ceramics Ltd. Vs ACIT (ITA No. 2208/Mds/2010) (iv) Trent Limited Vs DCIT (ITA No. 1073/Mum/2005). 20.6 The Ld. DR on the other hand relied on the order of the low....
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....Officer for verification observing as under: "9. Vis-a-vis the claim in respect of provision for bad and doubtful debts, relevant Schedule 7 of its Balance-sheet is reproduced hereunder:- Schedule 7 -Sundry debtors (unsecured) Debts Outstanding for a period exceeding six months considered good 4,446.29 4,263.29 Doubtful 1063.70 439.00 Less :Provision 1063.70 439.00 4,446.20 4,263.29 Other debts - Considered good 18,920.26 17,948.30 33,366.55 22,211.59 It is not clear whether the total debts of Rs. 23,366.55 lakhs is after deducting the provision of Rs. 1,063.70 lakhs. The amount of Rs. 624.70 lakhs considered by the Assessing Officer for addition is obviously difference between opening provision of Rs. 439 lakhs and closing provision of Rs. 1063.70 lakhs, mentioned in the above schedule. If the provision debited by assessee is indeed deducted from the total debts and only the net balance shown in the balance-sheet then by virtue of decision of the Hon'ble Karnataka High Court in the case of Yokogawa India Ltd. (supra) there cannot be....
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....e ground No. 7 and 8 of the appeal of the Revenue, we have already upheld the decision of the Ld CIT(A) of holding the relevant amount of provision under demobilisation and other expenses as ascertained liability and hence , we concur with the decision of the Ld CIT(A) that same are not required to be added to book profit u/s 115JB of the Act. The ground no. 9 of the appeal of the Revenue is accordingly dismissed. 22.1 The ground No. 13 of the appeal of the assessee relates to denial of exclusion of income amounting to Rs. 76,80,17,697/- earned from permanent establishment in foreign countries while computing book profit under section 115JB of the Act by applying the provisions of Double Tax Avoidance Agreement (DTAA). 22.2 The Assessing Officer held that adjustment can be made only as provided in Explanation to section 115J as decided by the Hon'ble Supreme Court in the case of Apollo tyres Vs CIT (2002) 255 ITR 273 (SC). According to him, exclusion of DTAA is not provided in that explanation. The Ld. CIT(A) confirmed the action of the Assessing Officer. 22.3 Before us the Ld. Counsel of the assessee submitted that issue in dispute is covered in the favour of the assessee....
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.... issue in dispute is covered against the assessee by the decision of the Hon'ble Bombay High Court in the case of Vee Kay Lal Investment Company Private Limited (supra) and the decision of the Hon'ble Kerala High Court in the case of NJ Jose and Company Private Limited Vs CIT (2010) 321 ITR 132 (ker.). 23.3 We have heard the rival submission and perused the relevant material on record. The hon'ble Bombay High Court in the case of Veekaylal Investment Company Private Limited (supra) held that while computing the book profit under the companies Act, the assessee has to include capital gains for computing the book profit under section 115J of the Act. The relevant finding of the Hon'ble High Court is reproduced as under : "7. We find merit in this appeal. According to s. 1153(1), in the case of an assessee being a company if the total income is less than 30 per cent of its book profits then the total income of such company shall be deemed to be an amount equal to 30 per cent of such book-profit and such income shall be chargeable to tax. That, the assessee has to first compute the total income in accordance with the IT Act and if the total income is less than 30 per cent of the ....
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....xii)(b). So also, the disclosure is required to be made in respect of investment in the capital of a partnership firm if the company is a partner on the date of the balance sheet (see p. 1651 of the Companies Act by A. Ramaiya [Fourteenth Edn.]. Similarly, profits or losses on such investments are also required to be disclosed. [See cl. 3(xii)(a) of Part II of Sch. VI of the Companies Act]." 23.4 As the Ld. CIT(A) has followed a binding precedent on the issue in dispute, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground No. 14 of the appeal of the assessee is accordingly dismissed. 24.1 The ground No. 15 of the appeal of the assessee relates to disallowance of claim of deduction under section 80HHC of the Act amounting to Rs. 28.97 crores while computing the book profit under section 115JB of the Act. 24.2 The Assessing Officer disallowed the claim of deduction under section 80HHC of the Act under normal business income and consequently he held that the assessee cannot be allowed deduction under section 80HHC for the purpose of section 115JB ( MAT provisions) of the Act. The Ld. CIT(A) held that ....
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....(A) of the Act might be allowed as the assessee fulfils all the requisite condition of the said provision. The assessee submitted that three projects namely "APSH 1A Hazurabad", "APSH 1B Kareem Nagar" and "APSH 3 Kamalapuram" totalling Rs. 2,03,55,02,091/-which were funded by the World Bank, were eligible for claim of deduction at the rate of 40% of such profit, which was worked out to Rs. 1,42,00,837/-. The assessee submitted that all the required conditions including maintenance of separate books of accounts, furnishing of audit report of chartered accountant certificate in prescribed form 10CCAA, creation of a special reserve etc have been fulfilled, and hence the assessee is eligible for the deduction. 26.3 The Ld. CIT(A) called for the remand report from the Assessing Officer, wherein he submitted that the two conditions of furnishing of a certificate in form No. 10CCAA and creation of housing project reserve account were not satisfied. 26.4 Regarding creation of a special reserve the Ld. CIT(A) , followed the decision of jurisdictional High Court in the case of continental construction Ltd. versus CIT 185 ITR 230. Regarding filing of the chartered accountant certificate....
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.... section 80HHC of the Act, thus, the assessee is not insisting for claim under section 80HHB of the Act. The ld. DR, on the other hand, has not objected to the withdrawal of the claim by the assessee. 27.3 We have heard the rival submissions and perused the relevant material on record. We have already allowed claim of the assessee for deduction under section 80HHC of the Act, while adjudicating, the ground No. 3 of the appeal of the assessee, and thus, this alternative claim cannot be allowed to the assessee. The assessee has also withdrawn this claim before us. Accordingly this ground of the appeal of the Revenue is allowed. 28.1 The ground No.3(three) of the appeal of the Revenue relates to the grant of deduction under section 80HHB in respect of foreign project without allocating corporate office expenses. 28.2 The Ld. Counsel of the assessee before us submitted that the claim of deduction under section 80HHB of the Act was made as an alternative claim under section 80HHC of the Act. He submitted that the claim of the assessee under section 80HHC of the Act has been allowed by the Tribunal in assessment year 2000- 01, therefore the claim of deduction under section 80....
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.... Officer in remand proceedings. 29.2 Before us, the Ld. DR relied on the order of the Assessing Officer and submitted that requisite details of employees resigned were not filed by the assessee, and therefore deleting the disallowance by the Ld. CIT(A) was not justified. 29.3 We have heard the rival submissions in view of the order of the lower authorities and other material on record. We find that the Ld. CIT(A) has allowed the claim of the deduction of the assessee observing as under: "7.2.3 In the rejoinder filed by the appellant counsel vide letter dated 09- 02-2005, it has been submitted that it is obvious that the employees who resigned and are eligible for VRS are only those who are covered under the VRS scheme as is applicable to the company. It is not possible under any circumstances that expenditure incurred under the head voluntary retirement scheme may pertain to employees who are not covered under the VRS scheme or has resigned when the scheme was not in operation. The appellant is a government undertaking and its accounts are being statutorily audited by the statutory auditor? and again audited by CAG and placed before the Parliament for approval thereof. ....
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....ct site itself and all the expenses were debited to profit and loss account. It was submitted that even the expenditure relating to any visit of an executive from corporate office and/or any expenditure incurred by the corporate office has been directly booked in the accounts of the project itself. 30.4 The Ld. CIT(A) deleted the allocation of corporate office expenses towards the DTAA income observing as under: "9.2.4. In the preceding assessment years 1999-00 and 2000-01, it was allowed in favour of the appellant. 9.3. The adjustment made by the A.O. was deleted by my ld. Predecessors on the ground that as the entire expenditure attributable to foreign projects have been duly considered in the P & L account prepared for the foreign projects, no part of the corporate office expenditure could be attributable to the foreign projects and, hence, the same was deleted. I agree with the decision of my ld. Predecessors and following the same for the same reasons, the adjustment made by the A.O. is deleted." 30.5 Before us, the Ld. DR relied on the finding of the Assessing Officer. On the contrary, Ld. Counsel of the assessee reiterated the submission made before the ld. CIT(A....
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....et up a gratuity trust fund which is being administered by LIC of India. The annual gratuity liability is determined by LIC based on actuarial valuation under group gratuity scheme. During the previous year under consideration, the company provided for gratuity amounting to Rs. 44,39,494 based on actuarial valuation. (ii) Since the determination of the gratuity provision is by way of an actuarial valuation it cannot be said that the same is an unascertained liability. The appellant vide its letter dated 24-03-2004 has submitted before the AO that gratuity has been provided on the basis of actuarial valuation. The AO did not sought for actuarial valuation certificate, however, the same is enclosed herewith. This disallowance has never been made in any of the earlier years. (iii) The Delhi ITAT in the case of GD Rathi Steels Ltd. Vs. DCIT, 56 ITD 103 has stated that gratuity which has been actuarially valued is an ascertained liability. Similar view has been expressed by Hon'ble Mumbai High Court in. the case Echjay Forging (supra). 15B.3 The provision for gratuity has been added by the appellant u/s 40A(7) because the gratuity trust fund which has been established and is be....
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....he AO is totally incorrect and contrary to the provisions of the Act. According to clause (i) of Explanation to Section 115JB of the Act, it is clear that any amount withdrawn from reserves or provisions which are created and/or provided in the previous year ended on or before 31-03-1996 should be allowed. The said clause imposes certain restrictions in respect of provisions created in the previous year relevant to the AY beginning on or after the 1st day of April 1997. However, as far as the provision created on or before 31-03-1996 is concerned, the provisions of the Act are very clear and there is no doubt that the same should be excluded in computing the book profit for the purpose of Section 115JB of the Act. (ii) The clause (i) was amended with retrospective effect by the Finance Act, 2002 from 01-04-2001. In the original clause (i), when it was brought into force w.e.f. 01-04-2001, alongwith the new provisions of Section 115JB of the Act, instead of 1st day of April 1997, the term used in the statute was 1st day of April 2001 and, accordingly, it claimed the said deduction in relation to the provisions utilized and/or withdrawn, which were made prior to the previous year ....
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....ed that this ground was only taken as alternative ground in unlikely event the disallowance under section 80IA and 80HHC is not allowed. Since, we have already allowed the deduction under section 80IA and 80HHC of the Act while computing book profit under section 115JB of the Act, this claim of the assessee is rendered infructuous and accordingly, we allow the ground of the appeal of the Revenue. 34.1 The ground No. 13 of the appeal of the revenue relates to interest under section 234D of the Act amounting to Rs. 2,23,26,453/-. 34.2 The Ld. CIT(A) deleted the interest charged under section 234D of the Act on the ground that relevant section was introduced with effect from 01/06/2003 and refund in the present case was granted before the said date ( i.e. on 30/07/2002). 34.3 Before us, the Ld. DR submitted that in the instant case assessment proceedings have been completed on 25/03/2004 and therefore provision of section 234D is applicable. 34.4 We have heard rival submission of the parties. The explanation -2 to section 234D has been inserted by way of Finance Act 2012 which provides that provisions of section 234D would be applicable for assessment year commencing befor....
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....re in above, the Ld. CIT(A) was not justified in not taking into consideration the decision of Hon'ble the case of Patel Engg. Ltd - vs. - Dy CIT (2005) 94 ITD wherein based on the identical facts as of the appellant the deduction u/s 80-IA of the Act has been allowed. 3(a). That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the disallowance of the claim of the appellant tor deduction u/s 80HHC amounting to Rs. 17,09,53,587/- in respect of income earned from the business of export of goods. 3(b). That on the facts and in the circumstances of the case, and without prejudice to ground No. 3(a) taken here in above, the Ld. CIT(A) grossly erred in considering that the appellant entered into 'composite contract' which cannot be equated to the 'supply contract' thereby disallowing the claim for deduction u/s 80HITC of the Act. 3(c) That on the facts and in the circumstances of the case, and without prejudice to ground No. 3(a) and 3(b) taken here in above, the Ld. CIT(A) grossly erred in not allowing the alternate claim of the appellant u/s 80HHB in respect of supplies made to Syria when under the similar ci....
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.... erred in holding that the interest received by the appellant on provisional assessment u/s 143(1) for the assessment year 2001-02 was due and final, disregarding the fact that the same was subsequently withdrawn on finalization of assessment u/s 143(3) of the Act for the said assessment year 2001-02. 8(a) That on the facts and in the circumstances of the case, the Ld. CIT (A) was not justified in confirming the addition of Rs. 1,60,30,000/- towards interest income on accrual basis on the disputed dues with NBCC whose matter is pending before the Hon'ble Delhi High Court. 8(b) That on the facts and in the circumstances of the case and without prejudice to ground no. 8(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. 8(c) That on the facts and in the circumstances of the case and without prejudice to ground no. 8(a) and 8(b) taken here in above, the Ld. CIT(A) was not justified in upholding the addition of interest calculated @ 15% p.a. as awarded by the arbitration award instead of interest cal....
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....e purpose of Section L15JB of the Act." Grounds raised by assessee in appeal for A.Y. 2003-04: 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 CTT(A)], was not justified in upholding the disallowance of the appellant's claim for deduction of depreciation amounting to Rs. 13,73,203/- on the WDV of machinery spare parts capitalized in the earlier years(Assessment year 2001-2002). 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 machinery 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) and 1(b) taken here in above, the Ld.CIT (A)grossly erred in not following the decision of the Jurisdictional Delhi High Court in the case of Capital Bus Services (123 ITR 404) wherein depreciation on parts of machinery which is ready for use has been categorically....
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....visions of the Act. 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 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. 5(a) That on the facts and in the circumstances of the case, the Ld. CIT (A) was not justified in confirming the addition made by the Assessing Officer towards interest received on provisional assessment u/s 143(1) amounting to Rs. 2,05,90,009/-. 5(b) That on the facts and the circumstances of the case and without prejudice to ground no. 5(a) taken herein above, the Ld. CIT (A) grossly erred in including the above interest income received on provisional basis which was subsequently withdrawn on finalization of assessment u/s 143(3). 6(a) That on the facts and in the circumstances of the case the Ld. CIT (A) was not justified in confirming the addition of Rs. 1,36,70,000/- towards interest income on accrual basis on the disputed dues with NBCC whose matter is pending before the Hon'ble Delhi ....
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....above, the Ld. CIT (A) grossly erred in holding that addition be made to book profit on account of the provision for bad and doubtful debts and provision for bad and doubtful advances on the ground that these are liability other than ascertained liability. 9(c) That on the facts and in the circumstances of the case and without prejudice to ground no. 9(a) and 9(b) taken here in above, the Ld. CIT (A) was not justified in not taking into consideration the decision of the Supreme Court in the case of CIT V. HCL Comnet Systems & Services [2008] 305 ITR 409 , wherein it was held that the provision for bad and doubtful debts is not for meeting a liabilities is not to be included in the book profits for the purposes of sec. 115JB. 10.0 That on the facts and circumstances of the case the Ld. CIT (A) was not justified in rejecting the appellant's claim for provision for other expenses amounting to Rs. 4,30,61,843/- in respect of non DTAA projects. The appellant claimed the said provisions as deductible expenditure while computing the book profits for the purposes of section 115JB of the Act, since the same were quantifiable and ascertained liabilities in the hands of the appel....
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.... raised by Revenue in appeal for A.Y. 2003-04 1. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of Rs. 69,58,033/- on account of deduction u/s 80HHB. 2. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of Rs. 1,29,214/- on account of corporate office expenses. 3. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of Rs. 7,78,00,676/- on account of corporate expenses proportionate to profit of foreign projects. 4. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 1,10,71,800/- on account of the provision for demobilization expenditure. 5. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 1,28,77,257/- on account of provision for maintenance expenditure. 6. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 1,10,71,800, Rs. 1,28,77,257/- & Rs. 4,30,61,843/- on account of the provision for demobilization, provision for maintenance an....
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....essee. The ground No. 5(a) and 5(b) of the AY 2002-03 are dismissed accordingly. 42. Grounds Nos. 5(a) & 5(b) raised by assessee in appeal for A.Y. 2003-04 are covered by our decision on ground No. 8(a) & 8(b) raised in A.Y. 2001-02. Accordingly, these grounds are allowed for statistical purposes in terms of our decision on ground No. 8 of assessee's appeal for A.Y. 2001-02. 43. Grounds Nos. 6(a) & 6(b) raised by assessee in its appeal for A.Y. 2002-03 and grounds Nos. 6(a) & 6(b) raised in appeal for A.Y. 2003-04 are covered by our decision rendered on grounds Nos. 7(a) & 7(b) and 9(a) & 9(b) of assessee's appeal for A.Y. 2001-02 respectively, whereby the respective claims of the assessee have been dismissed. Accordingly, these grounds Nos. 6(a) & 6(b) raised by assessee in both the appeals for A.Y. 2002-03 and 2003-04 are also dismissed. 44. Grounds Nos. 7(a) & 7(b) raised by assessee in its appeal for A.Y. 2002-03 are covered by our decision rendered on grounds Nos. 8(a) & 8(b) in assessee's appeal for A.Y. 2001-02, which have been allowed for statistical purposes. Accordingly, these grounds of appeal for A.Y. 2002-03 are also allowed for statistical purposes in terms of o....
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....dismissed. 50. Ground No. 11 of appeal of assessee for A.Y. 2002-03 relates to disallowance of provision for maintenance 5, 53, 92, 513/-out of 7, 46, 71, 237/-. The Ld. CIT(A) upheld the disallowance holding the same as unascertained liability as held in the case of demobilisation expenses. As we have already upheld disallowance of the similar nature, while adjudicating ground No. 11 of the appeal for assessment year 2001-02, the provision for maintenance of 5, 53, 92, 513/- made under my provisions in the assessment year 2002-03, is also upheld. The ground No. 11 of the appeal for assessment year 2002-03, is accordingly dismissed. 51. Ground No. 11 raised by assessee in appeal for A.Y. 2003-04 is similar to ground No. 13 of A.Y. 2001-02, which we have allowed in the identical facts and circumstances. Accordingly, this ground of appeal of assessee is also allowed. 52. Ground No. 12 of assessee's appeal for A.Y. 2002-03 is similar to ground No. 12 of A.Y. 2001-02 and ground No. 12 of assessee's appeal for A.Y. 2003-04 is similar 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. 2001-0....
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....of filing a rectification petition under section 154 of the Act before the assessing officer. Accordingly he rejected the claim of the assessee. In our opinion, the Ld. CIT(A) has directed to avail the remedy provided in the act. We do not find any error in the said finding of the Ld. CIT(A), and accordingly we dismiss the ground of the appeal of the assessee. Revenue's appeal for A.Y. 2003-04: 58. In Ground Nos. 1 , the Revenue had challenged allowing alternative claim of Rs. 69,58,033 /- under section 80 HHB of the Act . The identical claim of deduction under section 88HHB of the Act in assessment year 2001-02 has been rejected by us while adjudicating ground No.2, accordingly following our finding, the ground No. one of the appeal of the Revenue for assessment year 2003-04 is allowed. 59. The ground No. 2 of the appeal of the Revenue relates to deduction of corporate office expenses of Rs. 1,29,214/-from the profit of the eligible projects for the purpose of computation of deduction under section 80HHB of the Act. The identical issue raised in ground No. 3 for assessment year 2001-02 has been allowed, accordingly the ground No. two of the appeal of the revenue for assessme....