AI Drafter 
TaxTMI 
TaxTMI 
2022 (9) TMI 1414
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....reement and impugned addition is illegal and is based on incorrect facts and findings and without considering and appreciating the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds. 1(b) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in treating the global income of Rs.812,37,75,113/- taxable in India is beyond jurisdiction, illegal, bad in law and against the facts and circumstances of the case. 2.(a) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making disallowance of Rs.8,49,00,000/- on account of Corporate Social responsibility expenses and that too without observing the principles of natural justice. 2(b) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making disallowance of Rs.8,49,00,000/- on account of Corporate Social responsibility expenses is bad in law and against the facts and circumstances of the case. 3.(a) That having regard to the facts and circumstances of the case, ....
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....ry of Surface and Transport 2,54,32,611 3 Ganga Bridge, Patna Development of Bridges Central Railway 55,04,90,872 4 ROB Pathankot Development of Bridges NHAI 1,25,903 5 RCF, Raibareli Project Rail Coach Factory RCF, Rai Bareli Administration 45,37,54,901 6 ROB Jaipur (New) Road over Bridge Govt. of Rajasthan 8,17,36,901 7 ROB Patna PhaseII(New) Road over bridge Govt. of Bihar 11,61,91,269 8 PMGSY Jharkhand Construction of roads and bridges Govt. of Jharkhand and India 43,62,828 9 RE Sri Nagar Rail electrification Northern Railway 8,39,522 Total 125,84,03,631 6. After going through the provisions of different agreements as mentioned above, the AO held that they clearly indicate that the assessee company was awarded contract by different agencies for executing certain work and the assessee company is required to execute these works in specified period and to the satisfaction of the work awarding agencies. Further, in most of the cases, the remuneration/ assessee company's fee is a specified percentage of....
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....astructure facility, which was to be legally handed over to the Railways and MSRDC after the payment was received. Various clauses of the agreement would show that the jobs done 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 shows that all attributes of development were not present. Making a bald assertion that assessee 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 mat 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 t....
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.... projects executed by it during the defect liability period as specified in the contract agreement. The assessee claimed that these are mandatory expenses and provision has been made on the basis of its past experience and on scientific basis, therefore, such provision is an allowable expenditure. 10. It was submitted that the provision for maintenance expenditure is provided to cover the company's expenditure to liability towards defect rectification and/or maintenance incurred by the company after completion of the contract. Such provision is made taking into account contractual provisions, operating turnover for the year, type of project, period of maintenance, contractual obligations of the subcontractors and other relevant factors, if any. As per the agreement with the client, the company is liable to maintain the works executed by it even after the projects are completed and handed over to the clients, for a period of 12 or 24 months from the date of completion. During this period, all the defects are to be rectified free of cost even though the Company has already handed over completed project to the client. The total project cost i.e. contract receipts, have already ....
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....lysis. 14. Since, the decision of the ld. CIT(A) is based on the decision of the earlier years which stands upheld, we decline to interfere with the order of the ld. CIT(A) on this issue. Income from foreign Contracts (Malaysia and Sri Lanka) - u/s 115JB: Ground No. 1 in ITA No. 1400/Del/2018 (Assessee Appeal) Ground No. 4 in ITA No. 2062/Del/2018 (Revenue Appeal) 15. The issue has been extensively discussed at para no. 10 to 14 in the order of the ITAT ITA No.2401/Del/2013 A.Y. 2006-07 vide order dated 23.01.2022. 16. This issue has been adjudicated by the Tribunal in ITA No.2596/Del/2004 for the A.Y. 2000-01 and also in ITA No.1825/Del/2005 dated 31.10.2019 and allowed in favour of the assessee. The relevant part of the order of the Tribunal is as under: "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 submit....
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....returned by the sub-contractor. 20. On going through the facts, we decline to interfere with the ratio of the ld. CIT(A). The appeal of the assessee on this ground is dismissed. CSR Expenses: 21. The assessee has incurred an amount of Rs.8.49 Cr. on account of Corporate Social Responsibility which the Assessing Officer treated as non-allowable business expenditure. The ld. CIT(A) held that the deduction u/s 37 of the Income Tax Act, 1961, the primary condition is that the expenditure should be incurred wholly and exclusively for the purpose of business and profession. It is clear that these expenses do not have direct nexus with the assessee's business and therefore it cannot be said that the same has been incurred for the purpose of the assessee's business. The ld. CIT(A) held that the objective of CSR expenditure is to share the burden of Government in providing social services and therefore if such expenses are allowed as deduction from income, it would amount to subsidizing part of expenditure by the Government. 22. The issue of deduction of CSR expenses read with Explanation 2 to Section 37(1) w.e.f. 1st April 2015 has been examined by the Co-ordinate bench of this....
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....urrent activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit: law looks forward not backward. As was observed in Phillips v. Eyre [, a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing 'taw." It may appear to be some kind of a dichotomy in the tax legislation but the well settled legal position is that when a legislation confers a benefit on the taxpayer by relaxing the rigour of pre-amendment law, and when such a benefit appears to have been the objective pursued by the legislature, it would be a purposive interpretation....
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....16.27 Current Investments (refer schedule 16 of balance sheet PB538) 176.01 64.95 Total 367.20 181.22 Average investment= (367.2+181.22)/2=274.21 Cr. 25. The AO noticed that assessee declared tax free income amounting to Rs.17,82,35,102 /- and itself disallowed a sum of Rs.2.52 lakhs u/s 14A of the Act. During the course of assessment proceedings, the assessee informed the AO that no interest was paid on investments made on which assessee earned the exempt income. 26. The assessee contended that it has itself disallowed about 10% of the expenses on salary etc paid to the team consisting of manager (finance) and Asst. Manager considering the time involved by these persons in this activity apart from their routine work. According to AO substantial fresh investment was made in the year ending as on 31.03.2014 and there was increase in investment during the year by an amount of Rs. 198.93 crores. Thus according to AO the amount claimed to have disallowed by the assessee was not commensurate to the exempt income. In his view there were also incidental expenditure of collection, telephone follow up etc. 27. Accordingly invoking the provisions of clause....