TaxTMI 
TaxTMI 
2022 (9) TMI 579
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.... involving proceedings under Section 143(3) of the Income Tax Act, 1961 (in short the Act). Heard both the parties. Case files perused. 2. The Revenue's appeal ITA No. 1426/Pun/2019 raises the following substantive grounds: - "1) On the facts and in the circumstances of the case, the Ld. CIT (A) has erred in admitting the additional evidence regarding the WIP of NH-9 project of Rs.1,48,30,490/- is included in the WIP reflected at Rs.20,82,00,000/- in the P&L account under the name 'Asiatic Textile Park'. 2. On the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deciding the issue without remanding the matter to the AO for verification of additional evidence produced by the assessee u/s. 46A o....
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.... in view of the non-shifting of electrical poles and line shifting etc. The total contract amount awarded to the appellant was for Rs.7,05,54,968/- which was 19% below the tender amount of Rs.7,97,83,558/-. The appellant had submitted four RA Bills in respect of the above work up to 20/6/2014. The Vth and final RA bill was for an amount of Rs.2,75,99,764/- including the escalation amount of Rs. 33,49,927/-. The said bill was not accounted in the F.Y., 2014-15 but was accounted in the F.Y. 2015-16, The AO made an inquiry with the Executive Engineer, National Highway Division, Solapur, who had replied to the AO stating that the said contract work was completed on 25/6/2014, as per the completion certificate but to due to approval from the Min....
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....act. Holding thus, the AO has treated an amount of Rs.2,59,07,899/-, as work in progress for the year out of the RA Bill amount of Rs.2,75,99,764/- by considering 6.13% as net profit on the transaction. 4.1 The AO also made an addition of Rs. 1,26,278/- being the interest received from Bank of India and MSEDCL which were not offered in the return of income filed. The AO has also disallowed an amount of Rs.1,66,459/- out of the mess expenses to plug the possibility of leakage or revenue. He has also disallowed an amount of Rs.1,798/-, being the interest on late payment debited to the P & L account holding that it is not allowable expenditure u/s 37 of the Act. The AO passed the assessment order u/s 143(3) assessing the income at Rs.....
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....the head 'Asiatic Textile Park, Kumbhari'. A certificate to this extent by the auditor was also filed. It was also further clarified that the work in progress of the Asiatic Textile Park was only of Rs.2,43,29,074/- as on 31/3/2015 and to which further expenses of Rs.32,43,333/- were incurred during F.Y. 2015-16, resulting in the total cost at Rs.2,75,72,407/- against the contract value of Rs.2,98,69,360/- resulting in a profit of 7.69% on the said contract. It was claimed that these facts clearly indicate that the work in progress shown of Rs.3,91,59,564/- against Asiatic Textile Park as on 31/3/2015 could not have been exclusively related to Asiatic Textile Park considering the contract amount itself. 5.2 The alternative submissi....
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....n progress of Asiatic Textile Park and the amount of work in progress relating to NH-9 is Rs. 1,48,30,490/- and the appellant had incurred an amount of Rs. 1,10,40,000/- in the F.Y. 2015-16 and thus the total expenditure incurred in the last phase is Rs.2,58,70,490/- on which the appellant has realized an amount of Rs.2,75,99,764/- resulting in a profit of 6.27%. Therefore, there is no merit in making the addition on the ground of work in progress in the A.Y. 2015-16. 6.1 Further, there is also merit in the alternative claim of the appellant that the addition on account of work in progress in the appellant's case for the A.Y. 2015-16 is tax neutral as the said work in progress has to be allowed as opening work in progress for A.Y. ....