AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 81
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....ate Authority or in short Ld. 'FAA') in appeal No. 28/10393/2019-20 & 26/10205/2019-20 respectively arising out of an appeal before it against the orders dated 31.12.2018 & 31.12.2019 respectively for the AY 2016-17 and 2017-18, passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the ACIT, Central Circle-15, New Delhi (hereinafter referred as the Ld. AO). And the Cross Objections have been raised by assessee. Grounds of ITA No. 2404/Del/2022, A.Y. 2016-17 are being taken up to dispose both the appeals. 2. Assessee is a company engaged in the business of construction and allied services. For the relevant assessment years with respect to appeals before the Tribunal, the return of assessee was taken for scruti....
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....t corresponding income of mobilisation advances was not offered to taxation by the Assessee during the year. 4. Whether Id. CIT(A) has erred on the facts and in law in deleting the addition of Rs. 8,70,00,000/- made by AO on account of disallowance of salary and wages ignoring the fact that assessee has violated matching principle of accounting by claiming excess expenditure in proportion to the revenue offered to taxation. 5. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal. 2.1 And the assessee has raised following cross objections :- 1. "That the additions/disallowance made by the Assessing Officer by passing the assessment order under Section 143(3) are il....
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...., the amount is billed to the customer and mobilization advance is adjusted as part of revenue/ billing and recognized as income over the period of project. It is claimed that this is the consistent accounting method followed by the assessee in line with recognized Percentage Of Completion Method (POCM) followed in terms of Accounting Standards-7. The Assessing Officer had noticed a difference in the receipt reflected in Form 26AS and that credited to the profit and loss account. Assessee claimed that the same was primarily on account of mobilization advances received by the assessee and initially recognized as liability by the assessee. However, the Ld. AO was not satisfied and made an addition of 20% of the Mobilization, advances as undis....
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....nt and balance sheet for the relevant assessment year; 2. Complete details of mobilization advances as on 31.03.2016. 3. List of current liabilities with reference to the relevant notes of audited financial statements. 4. Reconciliation of 26AS and receipts shown in P&L a/c. 5. Details of Project advances during the AY and the income earned from the same projects during the AY. 6. Intent Letters/ Notice of Awards of the 7 projects to whom project advances relate to. 7. Breakup of mobilization advances i.e., amount receipt, amount recognized in P&L and amount shown as liability. 8. Ld. AO has also failed to appreciate that although initially mobilization advance is recognized as liability ultimately over the period of project th....
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....rm of short term and long term mobilization advances duly matched with the total outstanding mobilization advances i.e. Rs. 172.17 Crs. Thus, the Bench is not inclined to interfere in the findings of Ld. CIT(A) deleting the addition. Accordingly ground no. 1 and 2 deserves to be allowed. 10. In regard to ground no. 3 it can be observed that the claim of assesses was that mobilization advances received during the year on which TDS gets deducted stands offered as income of the same year and stand offered in the form of WIP. Ld. CIT(A) has duly taken into consideration the position of mobilization advances received during the year and the fact that when the Ld. AO has given TDS credit in ITNS 150 and therein had disallowed TDS credit to the e....