TaxTMI 
TaxTMI 
2019 (4) TMI 1855
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....n of Rs. 4,10,06,609/- made on account of disallowance of Project Facilities Expenses." 2. DISALLOWANCE OF PROJECT FACILITY FOR Rs. 4.10.06,609/-: 3. The Ld. A.O has made the observation in para no. 3 of the assessment order as under: "A careful perusal of the explanation of the assessee, It can be seen that it has based its claim on two counts. Firstly, It is the contention of the assessee that construction of Metal Crash Barrier is a contractual obligation and secondly, the project facility do not creat any assets or benefit of enduring nature to the assessee. Before discussing the assessee's contractual liability, I would like to discuss factual position of expenditure of Rs. 4,83,71,954/-claimed by the assessee. ....
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....IP. For example, the expenditure incurred on marking of pavement to be applied need not be shown as WIP. As regards, the construction of safety barrier, as per the terms of contract the assessee has to prepare a safety crash barrier along the highway upto 20000 Mtrs. The assessee failed to offer any explanation why the expenditure incurred in the earlier years has not been claimed in the year in which it incurred. The assessee itself admitted that the project facility do not create any assets to the assessee while incurring the expenses. At this juncture, it is worthwhile to point out here that in the immediately preceding year the assessee has shown profit before tax at Rs. 65.79 lakh and claimed deduction of Rs. 46,50,756/- u/s. 801A of t....
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....d. The assessee furnished From No. 10CCB and as per the Form No. 10CCB, and the auditor has worked out deduction u/s. 80IA of the Act to the turn of Rs. 1,26,00,532/- and as such the deduction u/s. 80IA of the Act is allowed to the extent of Rs. 1,26,00,5327- as worked out by the auditor. Penalty proceedings u/s. 271(1)(c) of the Act are being separately initiated." 4. The Ld. A.O. has not considered the submission made by appellant on 10.09.2015 wherein the appellant has mentioned that the expenditure was required to be incurred as per the contractual obligation as the agreement entered in to with NHAI. 5. The Ld. A.O. has not considered the fact that the expenditure incurred for project metal barrier which was contractual obligation....
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.... Highway-76 in the Rajasthan state for collection of toll tax/fee. On verification of the ledger account of Project Facilities Expense, it is noticed that the assessee has debited an amount of Rs. 4,83,71,954/- under the head Project Metal Crass Barrier Expense. The expenditure incurred for project metal crass barrier is a contractual obligation to be fulfilled by company as per Schedule-B of the concession agreement entered in to with NHAI. Company does not have right of any reimbursement or claim of money from NHAI for the said facilities. As these project facilities are required to be built up on the national highway owned by government, Management is of opinion that these project facilities do not create any assets or benefit of endurin....