TaxTMI 
TaxTMI 
2023 (6) TMI 922
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....s liberty to raise additional ground and to modify/amend the ground of appeal at the time of hearing." 3. The assessee has raised a preliminary objection against the maintainability of the appeal on the ground that the department has filed the present appeal against the deceased person despite the fact the assessee had already expired on 21.02.2017. The ld. Counsel contended that since the assessee has raised legal issue regarding maintainability of the appeal and the preliminary objection raised by the assessee being legal in nature and goes into the root of the matter therefore, vide order dated 31.07.2019 after hearing both the parties the coordinate bench of this tribunal has passed a detailed order. The relevant finding of the bench on the legal issue vide order dated 31.07.2019 is reiterated here in below for the sake of brevity of the facts: 4. We have considered the rival submissions as well as the relevant material on record. There is no dispute that the assessee late Shri Chandi Ram had expired on 21st February, 2017 during the pendency of the appeal before the ld. CIT (A). This fact was apprised to the AO by the legal heir by various letters and also brought ....
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....ee, there is no dispute that the appeal filed against the deceased assessee is not covered under the provisions of section 292B and, therefore, the same is an invalid appeal liable to be dismissed. However, the appeal dismissed being invalid in limini due to the reason of impleading a deceased assessee cannot take away the right of the appellant to file a fresh appeal against the legal heir of the deceased assessee subject to the provisions of limitation and leave taken from the court. Hence once the Tribunal has granted the leave to the revenue for filing the revised form no. 36, the appeal of the revenue is admitted for deciding on merits. The legal preliminary objection raised by the assessee is rejected. The appeal of the revenue is directed to be listed for hearing on merits on 14th October, 2019. In the result, preliminary objection of the assessee is dismissed. 4. Since the preliminary objection raised was dismissed by a detailed order as referred in above by the coordinate bench of this tribunal and there is no contrary order of the higher court in the matter, the appeal filed by the revenue listed to be decided on merits and the same was heard on merits. 5. Succinctl....
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....he Act. 6.1 The assessee objected to issue notice u/s. 148 which was rejected by letter dated 08.04.2016. The assessee again objected to the issue of notice u/s. 148 vide letter dated 25.04.2016 which was also rejected vide letter dated 28.04.2016. 6.2 The assessee filed a written submission on 14.06.2016 in compliance to the notice dated 28.04.2016 along with re-computation / revised computation of income offering at Rs. 4,96,970/- [ being the 8.5 % of Rs. 58,46,714 receipt relating to contract work ] and Rs. 11,85,314/- [ being the 8.5 % of 1,39,44,881/-interest of compensatory nature for delay of payment] totaling to 16,82,284/- as against the return of income of Rs. 4,67,737/- stating that this additional income is declared to purchase the peace and to avoid unending litigation with the department. The assessee further stated that tax on the said income is paid on the condition that no additional tax liability is created; no penalty is lied and no other action for this or earlier year is taken and assessee requested to accept the humble offer as the assessee seriously ill and is bed ridden. The impugned receipt is received in the assessment year 2012-13 pertains to the wo....
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....es. 6.4 Based on the detailed discussion in the assessment order, a final show cause notice dated 18.11.2016 was issued to the assessee and the assessee filed reply on 28.11.2016 and 14.12.2016 contending that the receipt under reference relates to those years i.e. A. Y. 1989-90 & 1990-91 where in the books were rejected and profit was estimated and the similar ratio should apply related to the receipt received in the year under consideration related those years. Relying on the decision of the apex court in the case of Govinda Choudary [ 203 ITR 881 ] the assessee submitted that the interest payable in connection with the delayed payment of contract amount partakes the same character as the receipt of contract. 6.5 The ld. assessing officer observed in the order that the assessee did not produce any books of account with its supporting bills and vouchers regarding expenditure which may be considered therefore, he rejected the contention of the assessee while doing so he relied upon the order dated 15.12.2010 of ITAT in the assessee 's case for A. Y. 2006-07 where in the ITAT took the view that "No details of expenses shown to have been incurred in those years and it ....
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....imated, it is apparent that though the facts are as above, however the A.O.'s stand on this has to be seen in the light of department's earlier stand. On his part the assessee, in the course of reassessment proceedings filed a revised computation offering an additional 0.5% above the originally returned income (accepted by the department with income of Rs 4,67,737/-) and on the interest portion@ 8.5% amounting to Rs. 11,85,314/- thus revising his total income to Rs. 16,82,284)-& passing the additional tax & interest thereon voluntarily. The fact involved was that the assessee received an amount of Rs. 32,16,195/- an award for Anandpuri Canal Work & Rs 1,69,37,559/- for Annas Syphon Work vide order of Supreme Court in SLP no. 11185-86 of 2011 (order dt. 16/08/11) in civil suit filed against the irrigation department. The amount of award became final as it was finally decided by Apex Court dismissing the irrigation department's appeal on limitation. The award constituted refund of security, compensation, extra & disputed items & interest etc. Since the award was pertaining to A.Y. 1989-90, the assessee referred to the order in that year's as....
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....ot contain contract related receipts to but for illegal termination of contract work. However in A.Y. 2012-13 the award receipts were related to contract works. He summarized the difference accordingly & mentioned that the ratio for A.Y. 2006-07 was not applicable here as in this year receipts pertained to A.Y. 1989-90 & 1990-91 when books were rejected & N.P. rate applied. The A.O. has however, not considered the explanations of the assessee & held the entire receipt as taxable based on ITAT's order for A.Y. 2006-07 regarding claim of expenses & secondly on the interest receipts while agreeing that these were business receipts in view of Apex Court order in Govinda Chaudhary & Sons (1993) 203 ITR 881 (SC), he has not accepted rate application on the basis of no claim of expenses evidenced against these receipts. He has therefore also rejected the assessee's revised computation of income filed in the assessment proceedings as discussed earlier. He also rejected the claim of expenses of Rs. 26,29,000/- for AY 2011-12 to 2017-18 as legal expenses & Rs. 3,49,330/ for AY 2001-02 to 2012-13 as travelling expenses since nexus of these with arbitration award could not be ....
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....eipts of contract & interest amounts covered by the award pertaining to the A.Ys. 1989-90 & 1990-91 will be considered as business receipts only. Now coming to the issue of what amount out of the above required to be taxed, firstly it is clear from the High Court order for A.Y. 2006-07 in the appellant's own case (on which ITAT order reversed by High Court as referred above, the A.O. had relied), the entire income could not be brought to tax. The issue will then arise as to whether any expenses were there in respect of the same? Although the appellant in the course of the proceedings did mention about legal & travelling expenses which the A.O. did not consider in absence of nexus with the arbitration award, but in any case the analogy is that these awards pertained to works done for A.YS 1989-90 & 1990-91 & only reflected in the return for AY 2012-13 because they were received in financial year 2011-12, when the matter of award was finalized by the Apex court. Various Tribunals & High Courts have opined that in the case of contractors, estimation of income on such arbitration awards was a reasonable view on facts involved. In the present case also, it is observed ....
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....nished during assessment proceedings, such a revised computation has to be considered and acted upon by Assessing Officer-Held, yes Whether, therefore, where assessee had inadvertently offered higher income in his return but during assessment proceeding assessee filed reused computation of his total income to show that he had Tower income than declared in return, Assessing Officer must compute income on basis of revised computation of income- Held, yes THE ITAT MUMBAI BENCH F in Furniture Concepts (1) Ltd. v. Assistant Commissioner of Income-tax, Range-9 (1), Mumbai 64 taxmann.com 47 (Mumbai Trib.) held- Section 139 of the Income-tax Act, 1961 Return of income (Revised computation)- Assessment year 2007-08 Assessee filed its return declaring certain taxable income- Subsequently assessee filed revised computation wherein deduction was claimed on account of remission by bank under one time settlement Assessee did not raise said claim by filing a revised return because prescribed time for filing return had already elapsed Assessing Officer refused to consider revised computation submitted by assessee Whether since mandate of Constitution is to levy and collect due ta....
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....lieve that the assessee has concealed the particulars of his income for the above-mentioned year. Therefore, notice under section 148 of the Income-Tax Act, 1961 is to be issued for initiating the escaped assessment proceedings under section 147 of the Act." Thereafter, assessment proceeding was completed at total income of Rs 2,01,37,560/- on 28.12.2016 by making addition of Rs. 1,93,23,858 (Rs. 1,39,44,881+ 58,46,714 Rs. 4,67,737) treating entire receipts of Rs. 58,46,714/- as contractual arbitration awards receipts and Rs 1,39, 44,881/-as interest on arbitration awards receipts. 2. Brief Facts of the case "Assessment in this case was completed u/s 143/147 28.12.2015 at an Income Rs. 2,01,37,560/- as against income of Rs. 8.13,697/-declared by the assessee in his return. 1 Assessee declared total income of Rs. 8,13,697/-in his return filed on 28.05.2012. Later on, it was observed that the assessee received interest of Rs. 1,39,44,881 on arbitration receipts and credited the same in capital account without paying any tax thereon. It was further observed that assessee received contract receipts of Rs. 58,46,714/- and the same was shown in P&L account out of which (Rs....
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....(b) of the Act. In the instant case of the assessee, he has received interest of Rs. 1,39,44,881/- an arbitration receipts of Rs 58,46,714/- & security refunds of Rs 3,62,059/- during the year under consideration is legally treated as income of the assessee for the same year- 9.4 In the original ITR of the assessee for the year under consideration, he has not declared his taxable income from interest receipts on his arbitration awards, which was become final vide the Hon'ble Apex Court's decision dated 16.08.2011 in SLP CC Nos. 11111 & 11112/2011 arisen out of order dt. 17.12.2009 in SBCMA No. 608/209 of the Hon'ble High Court of Rajasthan at Jodhpur. The same entire interest receipts were capitalized by the assessed in his original ITR, hence, the escapement assessment proceedings were initiated in the assessee's case. Later on, he filed revised computation of income on 14.06.2016 is not found having any strength to treat as acceptable Whereas, he has filed copy of original R on 06.04. 2016 with requesting to treat the same ITR in response to the notice u/s 148. 9.6 I have gone through the all decisions on which the assessee is relied, it noticed that the fac....
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....e entire income could not be brought to tax. The issue will then arise as to whether any expenses were there in respect to the same? Although the appellant in the course of the proceedings did mention about legal travelling expenses which the A.O. did not consider in absence of nexus with the arbitration award, but in any case the analogy is that these awards pertained to works done for A. 1989.90 &1990.91 & only reflected in the return for AY 2017- 13 because they were received in financial year 2011- 12, when the matter of award was finalized by the Apex Court. Various Tribunals & High Courts have opined that in the case of contractors, estimation of income on such arbitration awards was a reasonable view on facts involved. In the present case also, it is observed that on the regular receipts for AY 1989-90 & 1990-91, the department had resorted to rejection of books of accounts u/s 145. Since the receipt of award is from those very contracts & related books rejected by the department then & estimating the profits, the contract & the interest awarded are also deemed to be of the same character & whatever be the receipt it was duly covered by the Net Profit rate on the same ....
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....on 69C of the Act even though the expenses were not claimed in the year of work. A.Y 2004-05 1 Action taken by AO u/s 143(1) or any others Return of income filed on 01.11.2004 at Rs. 10,60,745/. Thereafter order u/s 143(3)passed on 05.12.2006 at total income of Rs. 60,72,122/- by making total addition of Rs 50,11,377/-. Details of the same are described in next point. 2. Nature of additions A. Order u/s 143(3) passed on 05.12.2006 by making following additions 1. Disallowance out of labour expenses Rs. 2,00,000/-, 2. Disallowance out of tractor hire charges Rs. 70,000/-, 3. Disallowance out of drilling and blasting expenses: Rs. 25,000/ 4. Disallowance out of telephone & Mobile exp. Rs 22,721/- 5 Disallowance out of diesel exp. Rs. 50,000/-, 6. Disallowance out of depreciation on cars Rs. 69,047/-, 7. Disallowance out of depreciation on motor cycle Rs. 709/-, 8. Disallowance out of depreciation on Mob phones Rs. 1,814/-, 9. Addition on a/c of low house hold withdrawals Rs. 24,000/-, 10, Disallowance of interest expenses Rs. 3,83,111, 11. Addition on a/c of accrued interest on NSCs Rs. 9,575/- 12. Undeclared contract receipt Rs. 5,71,422/, 13. Bogus current l....
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....e Hon'ble ITAT vide passed order dated 31.03.2008 in ITA No.1003/JP/2007 as under: 1. Restrict the disallowance at Rs 35,000/ out of Rs 70,000/- made on account of Tractor hiring charges and Rs 12,500/- out of 25,000/- made on account of drilling and blasting expenses. 2. Deleted Rs. 355/- made on account of depreciation on motorcycle. 3. Set aside the addition of Rs. 5,71,422/- made on contract receipt to verify as to whether the expenses incurred by the assessee relating to the award related to assessment year 1993-94. 4. Deleted the addition of Rs 35,83,978/-stating that assessee was rather trustee of the said amount pending adjudication of appeal preferred by the State Government against that disputed amount. B. Against the order dated 28.01.2015 in appeal No.2895/2008-09 of CITIAL the assessee filed appeal before Hon'ble ITAT. The Hon'ble ITAT passed order on 18:03 2016 in ITA No 379/IP/2015 as under: 1. The Hon'ble ITAT set-aside the issue to the AC and directed him to decide the case on the basis of decision of Hon'ble High Court on similar facts and circumstance for A.Y. 2006-07. 5. High Court 1. (DBIT No:825/2008 dated 13.04.2....
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.... and has upheld the order of the CIT(A) in view of the judgment of Hon'ble Supreme Court in the case of Govinda Chaudhary & Other 203 ITR 881 High Court decisions. 6. Remarks: No further appeal was recommended for filing SLP before the Hon'ble Supreme Court. 7. AO's comments: No further appeal for filing SLP before the Hon'ble Supreme Court was recommended due to below tax effect and as per the audit report the expenses were not claimed and therefore only net profit rate was to be applied. A.Y 2008-09 1. AY 2008-09 Action taken by Du/s 14311) or any others ROI at income of Rs. 3,16,040/-filed on 30.09.2008. Order u/s 143(3) dated 14.05.2010 at Rs. 7,55,353/-. Thereafter case was re-opened u/s 147 and completed assessment u/s 147/31/147 dated 26.12.2013 at total income of Rs. 1,46,66,330/-. By making the addition as mentioned in point no.2 2. Nature of addition 1. Receipt of Arbitration at Rs. 91,59,305/- 2. Accrued interest on FDRs at Rs. 7,55,642/- 3. Expense of payment disallowance u/s 40(a)(ia) at Rs. 39,96,030/-. 3. The CIT(A), reasons for deleting the addition:- The CIT(A) in appeal No.426/2013-14 dated 23.10.2014 passed....
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....or any other:- Return of income filed on 10.10.2009 at Rs. 3,12,462/-, Order u/s 143(3) passed on 25.11.2011 at total income of Rs. 4,60,916/-by making following additions: 2. Nature of addition: 1. Disallowance of interest paid at Rs. 1,48,454/- other than business. 3. CIT(A), reasons for deleting the addition:- No appeal 4. ITAT 5. High Court 6. Remarks: 7. AO's comments: A.Y 2012-13 1. Action taken by AO u/s 143(1) or any other In this case the assessee filed his ROI u/s 139(1) of the Act on 28.05.2012 declaring income of Rs. 8,13,700/ which was processed u/s 143(1) on 22.03.2014. Thereafter notice u/s 148 of the Act was issued to the assessee on 08.03.2016 after seeking prior approval and recording the reasons. 2. Nature of addition: Assessment u/s 143(3) of the Act was completed on 28.12.2016 by making addition of Rs. 1,93,23,858/ (Rs 58,46,714/+ Rs. 1,39,44,881/- Rs 4,67,737/-) entire receipts of contractual arbitration awards of Rs. 58,46,714/- and interest at Rs. 1,39,44,881/- on arbitration awards treating as income of the assessee. 3. CIT(A) reasons for deleting the addit....
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....as called for by the AO and the ld. CIT(A) has granted the relief without dealing with this contention of the AO. Based on these arguments ld. DR supported the order of the assessing officer and prayed to sustained the addition made by the AO. 9. Per contra, the ld. AR appearing on behalf of the assessee has placed their written submission which is extracted in below; "1. That the Late assessee respondent was an individual and was regularly filing his Income tax returns for past various years declaring therein income from civil construction work, interest, etc. 1.1. That during the year under consideration the assessee respondent got his books of accounts audited on 25.04.2012 and thereafter had filed his income tax return on 28.05.2012 declaring therein total income at Rs. 8,13,700/-. 1.2. That during the year under consideration the assessee respondent had received a sum of Rs. 58,46,714/- and interest thereon at Rs. 1,39,44,881/- totaling Rs. 1,97,91,595/- on account of arbitration award towards work executed by the assessee respondent in the Assessment Year 1989-1990 & 1990-1991 out of which a sum of Rs. 4,67,737/- was disclosed by the assessee res....
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....ty of net profit rate of 8.5% against 11% applied by the ld. Assessing Officer. The assessee also did not challenge the applicability of 8.5% on net contract receipts. Thus, the finding as to application of net profit rate of 8.5% on contract receipts became final and binding on the assessee as well as the Revenue. The department's appeal was dismissed by the Hon'ble Tribunal on 16/3/1998. 2.3. It may also be mentioned that for the Assessment Year 1986-87 the learned Assessing Officer applied net profit rate of 8% by Order dated 25.3.1988. 2.4. Thus, it is apparent and patent on the face of the record that book results for the above stated assessment years 1989-90 and 1990-91 were not accepted and it was finally held that net profit rate of 8.5% need be applied on the contract receipts. Income was assessed more than returned income. 3. On account of non-acceptance of the bills and claims made/submitted in respect of excavation of Anandpuri Canal dispute arose between the assessee and the State of Rajasthan through the Executive Engineer, DISTY DN No.2 LMC, Mahi Pariyojana, Banswara and the Hon'ble District Judge, Banswara vide his order no. 92/268 dated 8....
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....e Hon'ble Supreme court order dated 20.09.2010. 3.3. On upon this, department filed review petition in Jodhpur High Court under order 47 CPC for review of Judgment dated 17.12.2009 for both the cases vide SB-CRP No.5998/2010 & 5999/2010 which was also rejected vide Hon'ble High Court Jodhpur order dated 10.11.2010 with the remark, "that present review petitions are liable to be dismissed on merits, even if delay, in filing of the same was to be condoned. Accordingly the delay in filing of review petition is condoned, but the review petitions are dismissed on merits." 3.4. Before the Judgment of review petition filed by the department issued by Hon'ble High Court Jodhpur the department have deposited the draft of Rs. 1,69,37,559/- for Anas Syphon work and a draft of Rs. 32,16,095/- deposited against the work of Anandpuri Canal work on 01.11.2010 in the Hon'ble DJ Court Banswara for which assessee requested to Hon'ble DJ Court Banswara to release the said amounts as deposited by the department but Hon'ble DJ Court Banswara did not release the amount by saying that the department has already filed review petition in Hon'ble High Court Jodhpur and advised to wait up t....
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....eld. (B) Principal amount of compensation - it shall partake the character of contract receipts and its treatment should be the same as if it would have been received originally during the assessment years 1989-90 and 1990-91. The Legislatures finding that it is impossible for a contractor to maintain full proof books of account supported by vouchers, details etc. Section. 44AD was inserted for computation on presumption basis. Section 44AD was substituted by the Finance (No.2) Act 2009 with effect from 1.4.2011. It provides by way of an over-riding provision and as a special provision for computing profits and gains of business on presumption basis. As per Explanation (a) an individual is an eligible assessee. Under the Explanation (b), 'eligible business' means (i) any business except the business of plying, hiring or leasing goods carriages and whose total turnover or gross receipts in the previous year does not exceed an amount sixty lac rupees. (C) Interest has been allowed by the Arbitrator on equity, ex-gratia and of discretion. It is not statutory or in terms of the agreement. Its nature is revenue receipt attributable to and incidental to contract busines....
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....3,28,858/-, on perusal whereof it is noticed that for the following reasons, the addition is made: 9.1. Reliance has been placed upon Hon'ble ITAT's observation for A.Y. 2006-2007 in assessee's own case order dated 15.12.2010 9.2. Expenditure for which no details provided, nor entered in books are disallowable as per proviso to section 69C of the Act. 9.3. Though the interest income is treated as income from business, however the same is treated as taxable in the year of receipt in light of section 145A(b) of the Act. 9.4. The revised income is not acceptable since assessee has already stated that original return be treated as return filed in compliance to notice u/s. 148. 9.5. Legal expenses claimed by the assessee has no nexus with the outcome of judgment passed by the Hon'ble Apex Court. 9.6. The facts of judgements relied upon by the assessee are distinguishable and assessee's facts are similar to the one as were involved in A.Y. 2004-2005. Para No. AO Reasoning Assessee's Submissions 9.6. The facts of judgements relied upon by the assessee are distinguishable and assessee's facts are similar to the one as wer....
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....rightly held the profit rate and allowed the claim of the appellant as reproduced hereinabove. The tribunal has committed serious error in concluding that subsequent years expenses which are claimed ought not to be allowed in the relevant year. 8.3 In view of the decision of the Supreme Court and other High Court decisions, the income which has been incurred in the year 2006-07 is required to be allowed as expenses were not claimed in the earlier year. Since, no finding arrived by the AO whether the expenses are claimed or not for the A.Y. 2004-05. 8.4 Taking into consideration the above, the issue is answered in favour of the assessee and against the department. 9. The appeal stands allowed. 9.2. Expenditure for which no details provided, nor entered in books are disallowable as per proviso to section 69C of the Act It is submitted that the same was inserted for the first time by Finance (No. 2) Act, 1998 w.e.f. 01.04.1999 and hence the same is not applicable for the relevant year 1989- 1990 & 1990-1991 for which the award pertains. 9.3. Though the interest income is treated as income from business, however the same is treated as taxable in the year of rece....
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....s regards Ground of appeal no. 8 to 14 (Except 10 & 11), objecting to treating of gross receipts as income by the A.O. when these pertained to A.Y. 1989-90 & 1990-91 where the books were already rejected by the A.O. u/s 145 & profit estimated, it is apparent that though the facts are as above, however the A.O.'s stand on this has to be seen in the light of department's earlier stand. On his part the assessee, in the course of reassessment proceedings filed a revised computation offering an addition 0.5% above the originally returned income (accepted by the department with income of Rs. 4,67,737/-) and on the interest portion @ 8.5% amounting to Rs. 11,85,314/- thus revising his total income to Rs. 16,82,284/- & passing the additional tax & interest thereon voluntarily. The fact involved was that the assessee received an amount of Rs. 32,16,195/- as award for Anandpuri Canal Work & Rs. 1,69,37,559/- for Annas Syphon Work vide order of Supreme Court in SLP No. 11185-86 of 2011 (order dt. 16/08/11) in civil suit filed against the irrigation department. The amount of award became final as it was finally decided by Apex Court dismissing the irrigation department's appe....
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....n if incurred as it was never a part of audited P&L account for A.Y. 1990-91 & 1993-94. The assessee explained in the present assessment under appeal here that receipts in A.Y. 2006-07 which pertained to two years did not contain contract related receipts to but for illegal termination of contract work. However in A.Y. 2012-13 the award receipts were related to contract works. He summarized the difference accordingly & mentioned that the ratio for A.Y. 2006-07 was not applicable here as in this year receipts pertained to A.Y. 1989-90 & 1990-91 when books were rejected & N.P. rate applied. The A.O. has however, not considered the explanations of the assessee & held the entire receipt as taxable based on ITAT's order for A.Y. 2006-07 regarding claim of expenses & secondly on the interest receipts while agreeing that these were business receipts in view of Apex Court order in Govinda Chaudhary & Sons (1993) 203 ITR 881 (SC), he has not accepted rate application on the basis of no claim of expenses evidenced against these receipts. He has therefore also rejected the assessee's revised computation of income filed in the assessment proceedings as discussed earlier. He a....
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.... contract receipts disputed (& received later) it was totally de hors the contract business and could not be from 'other sources' as the A.O. has also agreed here. In the present case also, therefore the entire receipts of contract & interest amounts covered by the award pertaining to the A.Ys. 1989-90 & 1990-91 will be considered as business receipts only. Now coming to the issue of what amount out of the above required to be taxed, firstly it is clear from the High Court order for A.Y. 2006-07 in the appellant's own case (on which ITAT order reversed by High Court as referred above, the A.O. had relied), the entire income could not be brought to tax. The issue will then arise as to whether any expenses were there in respect of the same? Although the appellant in the course of the proceedings did mention about legal & travelling expenses which the A.O. did not consider in absence of nexus with the arbitration award, but in any case the analogy is that these awards pertained to works done for A.Ys 1989-90 & 1990-91 & only reflected in the return for A.Y. 2012-13 because they were received in financial year 2011-12, when the matter of award was finalized by the Ape....
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....her similarly, in case assessee files and produces correct computation of his income, and can convince Assessing Officer that income disclosed in original return is not actually correct income and correct income is one which is being furnished during assessment proceedings, such a revised computation has to be considered and acted upon by Assessing Officer - Held, yes - Whether, therefore, where assessee had inadvertently offered higher income in his return but during assessment proceeding assessee filed revised computation of his total income to show that he had lower income than declared in return, Assessing Officer must compute income on basis of revised computation of income - Held, yes THE ITAT MUMBAI BENCH 'F' in Furniture Concepts (I) Ltd. v Assistant Commissioner of Income-tax, Range-9 (1), Mumbai 64 taxmann.com 47 (Mumbai - Trib.) held - Section 139 of the Income-tax Act, 1961 - Return of income (Revised computation) - Assessment year 2007-08 - Assessee filed its return declaring certain taxable income - Subsequently assessee filed revised computation wherein deduction was claimed on account of remission by bank under one time settlement - Assessee did no....
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....e in the instant case apart from assessee respondents' own matter now settled to rest by Hon'ble Rajasthan High Court: * In CIT v. Govinda Choudhury & Sons. 203 ITR 881 the Hon'ble Supreme Court has held as under: The assessee contended that the amount received by him by way of interest was really in the nature of damages and was not taxable as a revenue receipt. This contention was rejected by the Income-tax Officer as well as the Appellate Assistant Commissioner. Before the Tribunal, again, the assessee urged that the amount of Rs. 2,77,692 was not at all taxable in its hands. However, it also took an alternative contention that, even if it is treated as a trading receipt or as a revenue receipt, it should be treated as part of trading receipts accruing to the assessee from the contract. The assessee's assessment had been completed by applying a net profit rate of 10 per cent, to the trading receipts. The assessee's contention was that this amount of Rs. 2,77,692 should be treated as part of the trading 'receipts and that what was assessable in his hands as income was only 10 per cent, of this amount. The Tribunal did not accept either contention of ....
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.... fixed by the Commissioner of Income Tax (Appeals) and confirmed by the Tribunal applies to interest element of the award amount According to the Revenue, interest is entirely taxable as it is an addition to the contract amount. However, we find that the issue is covered by the decision of the Supreme Court in Commissioner of Income Tax v. Govinda Choudhury and Sons (203 ITR 881) wherein the Supreme Court held that the compensation as well as interest have to be treated as contract receipts. Since the issue raised is covered by the decision of the Supreme Court, we do not think there is any scope for considering the decision relied on by the learned counsel for the Revenue in United Construction Contractors v. Commissioner of Income Tax (1994) (1) KLT 880). In light of above fact & submissions, it is thus kindly requested that the departments appeal be dismissed & the order passed by the ld. CIT(A) may be confirmed and upheld." 9.1 The ld. AR of the assessee also relied upon the following judgment to support the contentions so raised. The judgment relied upon are: SNo. Particulars Page No. From To 01 Written submission before Hon'ble ITAT 01 16 0....
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....ot offered any income at all. Considering the receipt amount the assessee is out of the purview of the provision of section 44AD and in the absence of any details of the expenditure incurred by the assessee he supported the order of the ld. AO and prayed to uphold the same. 11. We have heard the rival contentions and perused the material placed on record and the decisions relied upon by the parties to drive home to their respective contentions, both the learned DR and the AR before us vehemently supported the order of the authorities below as favorable to them. The bench noted that the assessee collected the demand draft on 20.11.2010 and the same was deposited in the bank account and the assessee has shown his amount in the books of account of account ended on 31.03.2011. The break up of this liability is at is appearing in the audited account of the assessee (APB-118) and the other related notes to the audited accounts which reads as under: (a) The assessee has followed the Mercantile System of accounting and recognized income and expenditure on accrual basis. (b) Assessee has not charged any Depreciation on fixed assets. (c) Balance of Sundry Debito....
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....e and considering the income as business receipts based on the detailed finding and after considering the judgment of the jurisdictional high court in the assessee's own case. The bench also noted that even though the amount received in 2010-11, assessee recorded the consequential income in the year under consideration i.e. 2011-12 for which both the parties did not disputed about the chargeability of the income the same is considered as chargeable to the year under consideration i.e. F.Y. 2011-12, relevant to assessment year 2012-13. The bench also noted that the income in this case is not the interest on compensation or interest on enhanced compensation chargeable to tax as per provision of section 56(2)(viii) which is chargeable to tax on receipt of such interest irrespective of method of accounting followed by the assessee. But in this case the interest is on delayed payment of the contract amount executed by the assessee and as decided by the apex court in the case of CIT Vs. Govinda Choudhury this interest is only an accretion to the assessee's receipts from the contracts. It is obviously attributable and incidental to the business caried on by him. Even the ld. AO accepted t....