2022 (11) TMI 228

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....rder on proper application of mind and after considering all the issues, the present impugned assessment order passed by the learned assessing officer and as confirmed by the learned CIT(A) is only on account of change of opinion and therefore also the orders of lower authorities deserves to be quashed. 1.3. There was no erroneous order at all so as to cause any prejudice to the interest of revenue. There being no earlier erroneous order, the impugned assessment order passed U/s. 143 r.w.s 263 of I.T. Act, 1961 has no legs to stand and is to be quashed. The learned CIT(A) has erred by upholding the order of the learned assessing officer which under applicable law and facts of the case deserves to be quashed. [Tax effect of above ground : Rs 33,84,980/-1 Without prejudice: 2.1. The learned Commissioner of Income tax (Appeals) has erred in upholding the addition of Rs. 49,20,000/- as made by Assessing Officer by holding provision for liquidated damages as unascertained liability. 2.2. On proper appreciation of facts of the appellant's case and applicable legal provisions, the addition of Rs. 49,20,000/- is erroneous and is liable to be....

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.... 4. On further appeal the CIT(A) confirmed the order of the AO. Aggrieved the assessee is in appeal before the Tribunal. 5. Before us the learned A.R. submitted that the assessee is under contractual obligation to pay liquidated damages since the purchase orders raised by the customers or the contracts entered into by the assessee with its customers contain a clause for payment of liquidated damages by the assessee if the assessee fails to deliver the lubricating systems/products on or before the schedule delivery date. The learned A.R. also submitted that the provision for liquidated damages is accrued for the financial year ended on 31.03.2012 on the basis that the liability has accrued for the year ended, though the actual payment would happen on a later date. According to the learned A.R. the assessee is following mercantile system of accounting and therefore the liability to pay liquidated damages which is accrued during the year under consideration has to be provided for in the books of account and the fact that liquidated damages are payable on a later date will not dilute the liability that has accrued to the assessee. The learned A.R. further submitted that the PCIT h....

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....004016 Y 31/08/2011 31 0.50% 5.00% 10.00 40.00,649 2,00,032 6 HUMBOLDT WEDAG INDIA PVT. LTI). 1004571 Y 28/03/2011 1 0.50% 15.00% 30.00 16.32,000 8,160 7 HUMBOLDT WEDAG INDIA PVT. LID. 1004576 Y 28/03/2012 I 0.50% 5.00% 10.00 6,88,500 3,443 8 L&T-MHI Turbnie Generators Pvt. Ltd 1004218 Y 10/01/2012 12 0.50% 5.00% 10.00 62,00,000 3.10,000 9 ITC LIMITED 1004174 Y 30/11/2011 18 0.50% 5.00% 10.00 2,00,000 10,000 10 ITC LIMITED 1004414 Y 29/02/2012 5 1.00% 10.00% 10.00 53,93,630 2,69,682 11 THYSSENKRUPP INDUSTRIES INDIA PVI 1004003 Y 15/11/2011 20 0.50% 5.00% 10.00 4,52,000 22,600 12 THYSSENKRUPP INDUSTRIES INDIA PV.1. 1004007 Y 30/09/201 I 27 0.50% 5.00% 10.00 46,50,000 2,32,500 13 ABHIJEET PROJECTS LTD 1003845 Y 25/12/2011 14 1.00% 10.00% 10.00 22,00,000 2,20,000 14 HOWDEN AIR & GAS INDIA PVT. LIMITED 1004465 Y 15/01/2012 11 0.50% 5.00% 10.00 38,00,000 1,90,000 15 ....

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....012 8 0.50% 5.00% 10.00 2,75,000 11,000 36 ELECON ENGINEERING COMPANY LTD. 1004656 Y 08/03/2012 4 0.50% 5.00% 10.00 2,75,000 5,500 37 TENOVA HYPERTHERM PVT. LTD. 1004314 Y 31/10/2011 22 0.50% 5.00% 10.00 12,80,000 64,000 38 LARSEN & TOUBRO LTD. 1004283 Y 20/09/2011 28 0.50% 5.00% 10.00 3.00,700 15,035 39 LARSEN & TOUBRO LTD. 1004671 Y 29/02/2012 5 1.00% 10.00% 10.00 2.00,000 10,000 40 LARSEN & TOUBRO LTD. 1004673 Y 29/02/2012_ 5 1.00% 10.00% 10.00 7,19,264 35,963 41 METAL ENGINEERING & TREATMENT 1003854 Y 31/03/2011 53 0.50% 5.00% 10.00 8,00,000 40,000 42 L N V Technology Private Limited 1004109 Y 01/08/2011 35 0.50% 5.00% 10.00 3,77,400 18.870 43 L N V Technology Private Limited 1004110 Y 01/08/2011 35 0.50% 5.00% 10.00 3,77.400 18,870 44 BlIARAT HEAVY ELECTRICAI.S LTD 2007079 Y 20/03/2011 2 0.50% 15.00% 30.00 3.24,657 3,247 45 BlIARAT HEAVY ELECTRICALS LTD 20079....