TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 922
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....e 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 to the notice of the ld. CIT (A). However, the ld. CIT (A) has passe....
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.... 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. Succinctly, the fact as culled out from the records is that the assessee derives income ....
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....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 work executed by the assessee in assessment year 1989-90 & 1990-91 but the payment was not released a....
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.....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 is a finding that such expenses have not been entered in books of account. Such an expenditure for which no deta....
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.... 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 assessment proceedings mentioning rejection of books there & application of N.P. rate @ 10% (against 1.48% shown by him) by the A.O., which was up....
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....nce 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 established & order of Apex Court was dated 16.08.2011 & this claim was made afterwards vide order sheet entry dated 16.12.16 (Page 49 & 50 of assessment order). Since the A.O. has broadly re....
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....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 that on the regular receipts for A.Y. 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 c....
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....al 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 taxes, issue raised by assessee was to be restored to file of Assessing Officer to examine it afresh and decide in accordance with law- Held, yes This additional amount of income comes to Rs. 16,82,284/- and has been disclosed by way of revised computation filed in the course of assessment proceedings. This is ....
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....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. 53,78,977/- was transferred to capital account without forming part of his total income. Accordingly, to bring the receipts to tax, notice u/s 148 of the Act was issued and proceedings u/ 147 were initiated. 2. During the assessment proceeding, AO observed that the assessee had declared receipt of Rs 58,46,714/- and declared net income of Rs 4,67,73....
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....ot 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 facts of the assessee's case is defer from their facts. Therefore, the same is not to be applied in the assessee's instant case. The facts and circumstances of the assessee's instant case is related to his own cases assessed and decided for AYS 2004-05 & 2005-07. It is pertinent to mention here that the Hon'ble ITAT's decision in the assessee....
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....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 as applied & finalized earlier in the first round of assessment proceedings. The contract as well as Interest award only partake the character of business receipts in the present case and were awarded on disputes & delay caused in regular course of contract works, the primary business of the assessee. As regards the revised computation of the assessee filed in the course of a....
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....ons 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 liability/ undeclared receipts Rs. 35,83,978/-. B. The AO passed set-aside order u/s 143(3)/254 on 21.07 2008 of the Hon'ble ITAT order dated 31.03.2008 in ITA No.1003/IP/2007 as under 1. Addition of Rs. 5,71,422/- by holding entire contract receipt of Rs. 6,24,983/- is to be taxed as income received by way of arbitration award. C. As per Order of Hon'ble ITAT dated 18.03.2016 in ITA No.329/IP/2015 ....
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....rred 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 13.04.2016) Dismissed the revenue appeal in view of the circular 21/2005 de 10.12.2015 of CBDT, Delhi as the tax effect involved in these cases is below the stipulated monetary limit 6. Remarks:- No further appeal was recommended in this case. 7. AO's comments. No further appeal was recommended in this case due to below tax effect and case not falling also exceptions of circular No.21/2015 dated 10.12.2015 of CBDT, New Delhi. A.Y. 2006-07 1 Action token by AO u/s 1....
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....008-09 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 order as under:- 1. Deleted the addition of Rs. 91,59,305/- as per order of Hon'ble ITAT in A.Y. 2004-05 (ITA No.1003/IP/2007) in which ITAT state that the assessee was not under the absolute ownership of the assessee and AO was not justified in treating the same as income of the assessee. 2. Deleted the addition of Rs. 7,55,642/- stating that in the original assessment order, AO added FDR interest of Rs. 6,23,298/- over and above net profit estimated @ 10% of the turnover 3. Deleted the addition of Rs. 39,96,030/- considering the ca....
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....as 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 addition The Id CIT(A) vide his order dated 21.02.2018 upheld the reopening of the case u/s 148 of the Act but restricted the addition to Rs. 16,82,284/- by applying net profit rate 8.5% of Rs. 1,97,91,595(58,46,714+1,39,44,881) by following the decision of Hon'ble Rajasthan High Court in this case for AY 2006-07 wherein the Hon'ble Court has directed to allow the expenses in the same year in which arbitration receipts have been brought to tax. 4. ITAT Appeal is pending before Hon'ble ITAT. 5. High Court NA 6. Remarks: 7. AO's comments:- Appeal is pending before Hon'ble ITAT. 8.2 In addition, the ld. DR su....
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....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 respondent as income liable to be taxed during the year under consideration. 1.3. That subsequent to disposal of objections the assessee respondent filed revised computation of income vide letter dated 14.06.2016 increasing the total income from contractual receipts to a sum of Rs. 16,82,284/- as against Rs. 4,67,737/- (increased by Rs. 1214547) as was declared in the return filed originally. Thus, revised computation of income was Rs. 25,04,440/- and paid due tax and interest thereon. 2. The assessee was granted contracts (i) concerning the excavation of Anandpuri Canal from RD 780M to 3390M; and (ii) concerning the construction of Annas Syphon for Anandpuri Canal at RD 3330M. The ....
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....nally 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 8.6.1992 appointed Shri K.C. Jain, retired Superintending Engineer, Irrigation as sole arbitrator to arbitrate in the matter of disputes. 3.1. Similarly in respect of Annas Syphon for Anandpuri Canal, similar dispute arose between the assessee and State of Rajasthan through Executive Engineer -Anandpuri Canal Division Mahi Pariyojna - Bagidora Distt Banswara and the Hon'ble District & Sessions Judge, Banswara vide his order No. Civil/92/496 dated 29.7.1992 appointed Shri K.C. Jain, retired Superintending Engineer, Irrigation as sole arbitrator to arbitrate in the matter of disputes. The sole arbitrator examined the facts, scrutinized the supporting material placed by the parties and ultimately made two separate awards on 12.3.1997....
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.... 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 to decision which is indicated in the note sheet of Hon'ble DJ Court Banswara of dated 19.11.2010 for Anas Syphon work and similar for Anandpuri Canal Work. 3.5. After Hon'ble High Court Jodhpur decision of dated 10.11.2010, on review petition filed by the department, the Hon'ble DJ Court Banswara demanded from the assessee that the payment can only be released if the assessee submit affidavit/undertaking that if any further orders from any of the courts comes, the same will be refunded / deposited back again by the claimant as mentioned in Note Sheet of dated 19.11.2010. 3.6. On this assessee submitted 2 No. affidavit / undertaking for each case as per instructions of the Hon'ble DJ Court Banswara on 20.11.2010 and the amount/ DD was collected accordingly on 20.11.2010. 4. The State Government again preferred SLP ....
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....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 business carried on by the assessee and it bear the same character as business receipts. 6. Position of expenditure relating to receipts: 6.1. The second part of the receipts to the tune of Rs. 58,46,714/- pertain to works executed by the assessee in Assessment Year 1989-90 & 1990-91 but was not paid in those Assessment Years. Further it is submitted it was because of these facts and nature of the case that the books of accounts were rejected and income was determined in Assessment Year 1989-90 & 1990-91 by way of NP rate application of 8.5%. NP rate of 8.5% as submitted by the assessee in the revised computation of income should be applied because of once the books of accounts are rejected by the assessing officer while completing the assessment and after rejecting the books net profit rate is applied then there is no relevancy of the books of accounts, bills, vouchers and expenses related to the executi....
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....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 were involved in A.Y. 2004-2005 * Addition was made by the ld. Assessing Officer * Addition was sustained by the Hon'ble CIT(A) * Matter was remanded by the Hon'ble ITAT back to the ld. Assessing Officer * Addition was again made by the ld. Assessing Officer * Addition was partly deleted by the Hon'ble CIT(A) * Matter was left undecided by the Hon'ble ITAT by its order dated 18.03.2016 with the following observation: Since the identical issue was decided by the Coordinate Bench for A.Y. 2006-2007 has already been challenged before Hon'ble Jurisdictional High Court and the Hon'ble High Court has also framed question of law in the case of the assessee, which is pending for disposal. When similar issue already is before the Hon'ble Court, we set aside the issue to the Assessing Officer and direct him to decide the case on the basis of decision of Hon'ble High Court on similar facts and circumstances. Accordingly we set aside the matter of the ld. CIT(A). 9.1. Reliance has been ....
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....hich 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 receipt in light of section 145A(b) of the Act It is submitted that the same pertains to compensation or enhanced compensation relating to acquisition of properties whereas the instant case nowhere falls under the definition of compensation but the same pertains to award granted under contractual difference between the contracting parties. For ready reference: Explanatory Circular issued for Finance (No. 2) Act, 2009 is reproduced as hereunder: 46. Rationalizing the provisions for taxation of interest received on delayed compensation or on enhanced compensation 46.1 The existing provisions of Income Tax Act provide that income chargeable under the head "Profits and gains of business or profession" or "Income from other sources", shall be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. Further, the Hon'ble Supreme Court in the case of Rama Bai vs. CIT (181 ITR 400) has held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrua....
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....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 assessment proceedings mentioning rejection of books there & application of N.P. rate @ 10% (against 1.48% shown by him) by the A.O., which was upheld by CIT(A) upto 8.5% and also confirmed by ITAT. For the A.Y. 1990-91, similarly the books were also rejected and N.P. rate of 11% adopted by the A.O. which was again reduced by CIT(A), Ajmer to 8.5% which on this Ground was not challenged by the department before ITAT, hence on N.P. rate it became final. The A.O. in this assessment order has held that the interest was compensatory in nature hence covered u/s 145A(6) of the IT Act, 1961. Further, in the absence of any evidences in support of any claim of expenses incurred to earn these amounts, since all the expenses had been duly considered in the originally filed returns, no further claims were allowable & for that reason argument of applying percentage as profit on this rece....
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....t proceedings as discussed earlier. He also rejected the calim of expenses of Rs. 26,29,000 for A.Y. 2011-12 to 2017-18 as legal expenses & Rs. 3,49,30/- for A.Y. 2001-02 to 2012-13 as travelling expenses since nexus of these with arbitration award could not be established & order of Apex Court was dated 16.08.2011 & this claim was made afterwards vide order sheet entry dated 16.12.16 (Page 49 & 50 of assessment order). Since the A.O. has broadly relied on the ITAT's order in the appellant's own case for A.Y. 2006-07 in which the ITAT had mentioned that no claim of expenses will be allowable & as per the assessment order the appeal was then pending before the High Court, a reference is now needed to be made to the Rajasthan High Court order for the above year enclosed with the assessee's paper book. The appeal was decided on 30/08/17 in DB income tax appeal no. 19/2011 on the following issue:- "Whether the Tribunal was justified in treating the entire income of Rs. 8,13,194/- as income for the assessment year in question?" The Hon'ble jurisdictional High Court at para 8.1 to 8.4 of the order held that "while considering the statement for A.Y. 1990-91 & 1993-94, the A.O. ought....
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....als & 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 A.Y. 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 as applied & finalized earlier in the first round of assessment proceedings. The contract as well as interest award only partake the character of business receipts in the present case and were awarded on disputes & delay caused in regular course of contract works, the primary business of the assessee. Ass regards the revised computation of the assessee filed in the course of assessment proceedings, it has been held by higher judicial forums that if a revision is done in the income before the completion of assessment proceedings, there is no bar against it being accepted (at l....
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....g 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 taxes, issue raised by assessee was to be restored to file of Assessing Officer to examine it afresh and decide in accordance with law - Held, yes This additional amount of income comes to Rs. 16,82,284/- and has been disclosed by way of revised computation filed in the course of assessment proceedings. This is over and above the income disclosed in the regular/revised return. The same is considered as acceptable. The balance addition of Rs. 1,76,41,574/- is therefore, directed to be deleted. Additional Comments of the Assessing Officer on CIT(A) order Page Comments of AO Remarks 4 The decision of Honorable High Court in A.Y. 2006-07 was based on the facts that the expenses incurred on contract work were not being reflected in audit report for the Assessment year in which the work was executed and hence the expenses were allowed in the same year in which arbitration receipts were declared by the assessee. In the year under consideration no such finding have been given by the CIT Appeal further the ....
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....at the amount of interest was fully taxable as "income from other sources" and that it had to be delinked from the other trading receipts for this purpose. This brings us to a consideration of the second question. The sum of Rs. 2,77,692 was received by the assessee as interest on the amounts which were determined to be payable by the assessee in respect of certain contracts executed by the assessee and in regard to the payments under which there was a dispute between the two parties. The assessee is a contractor. His business is to enter into contracts. In the course of the execution of these contracts, he has also to face disputes with the State Government and he has also to reckon with delays in payment of amounts that are due to him. If the amounts are not paid at the proper time and interest is awarded or paid for such delay, such interest is only an accretion to the assessee's receipts from the contracts. It is obviously attributable and incidental to the business carried on by him. It would not be correct, as the Tribunal has held, to say that this interest is totally de hors the contract business carried on by the assessee. It is well-settled that interest can be assess....
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....29 03 Hon'ble Kerala High Court in CIT v. N.C. Kaladharan (2008) 1 TMI 952 & Hon'ble Supreme Court in CIT v. N.C. Kaladharan (SLP No. 1956/2009 dated 23.02.2009 30 31 30 32 05 Hon'ble ITAT, Jaipur Bench in ITO vs. Chandi Ram (ITA 95/JP/1995 dated 20.09.2001 for A.Y 1989-1990) 33 36 9.2 The ld. AR of the assessee in addition to the written submission vehemently argued that the receipt is for the A.Y. 1989-90& 1990-91. In those years the books of account of the assessee were rejected as it was the returned loss by the assessee. This is the reasons as the money / contract receipts was not received by the assessee. Based on that belief that income has already been taxed on presumptive basis there is no need to offer this income again which belong to the earlier year for which the tax has already been levied on presumptive basis rejected the loss offered by the assessee in those years and this fact is not controverted by the revenue. The assessee to buy the peace with the department has already offered the income based on the presumptive taxation based on the decision of the apex court in the case of Govinda Choudhury. The ld. AR of the assessee also submitted that case of t....
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..../- was shown as a Liability as on 31.03.2011. The Special Leave petition filed by the state Government was dismissed by Hon'ble Supreme Court on dt. 16.08.2011. Consequently the said amount was squared up in the following manner in the financial year 2011-12. Current Liabilities A/c Dr. 20153654.00 To Security Deposit A/c Cr. 100639.00 To Interest On Arbitration Receipt Cr. 13944881.00 To Contract Receipts A/c Cr. 5846714.00 To FDR A/c (Pledged with Ex. Eng. Mahi Agnst. S.D.) Cr. 150000.00 To MD Vth Cr. 111420.00 5. Assessee has shown the amount of interest of Rs. 13944881/- on A/c of Arbitration as Capital Receipts and credited to Capital account. 6. On the Contract Amount Assessee declared the Profit of Rs. 467737/- u/s 44AD of Income Tax Act, 1961, which is not possible to verify. Assessee has not produced any vouchers/Supporting bills for expenditure hence not examined." 12. From the above it is evident that the assessee has even though the amount received in 2010-11 recorded the same income in the year under consideration i.e. 2011-12. Both the parties not disputed about the chargeability of the income the same is considered as chargeable to the year....