AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1577
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.... ('A.Y.' for short) 2021-22. 2. The assessee has raised the following grounds of appeal: 1. The order passed by the learned CIT (Appeals) is ultra vires, illegal, bad in law and contrary to the provisions of the Act. Addition on account of advance received of Rs. 1,43,32,00,000 from customers 2. The learned CIT (Appeals) erred in upholding the action of the Assessing Officer ["AO] in making addition of Rs. 1,43,32,00,000 towards advance received from customers outstanding as on 31 March 2021. 3. The learned CIT (Appeals) erred in not appreciating that the advances could be recognized as income by the appellant only upon fulfillment of the corresponding contractual obligations assigned thereto specifica....
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....ave directed to be deleted in subsequent respective years. Addition made on gross basis without allowing a corresponding expense. 8. Without prejudice to the above, the learned CIT (Appeals) erred in not directing the assessing officer to allow corresponding expenses against the advance received from customers. Consequential excess-levy of interest under section 234A/2348 of the Act 9. The learned CIT (Appeals) erred in confirming the levy of excess interest charged under section 234A of the Act to the extent of Rs. 1,44,28,612 and under section 234B of the Act to the extent of Rs. 8,12,46,396. Excess-levy of interest under section 234C of the Act 10. The learned CIT (Appeals) erred in c....
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....ssment order; or 2. has been upheld by the Appellate Authorities in favor of Revenue; even if further appeal of assessee pending, against such order." 4. The ld. AO observed that the assessee has received advance from customers amounting to Rs. 143,32,00,000/- under the head '"Advance from customer" [Note-20 of the audited financials] for which details were sought for by the ld. AO. After considering the assessee's submission, where the details of top 10 customers from whom advance have been received along with sample copies of invoice have been furnished, the ld. AO made an addition amounting to Rs. 143,32,00,000/- u/s. 28 of the Act on the ground that the assessee has failed to furnish details of the agreements that are entered into be....
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....d that as these are specialized pumps which requires considerable amount of time, the assessee receives advance in tranches as per the terms of the contract. The ld. AR contended that out of Rs. 58.49 crores received from NPCIL, the assessee did not receive any advance during the year under consideration and the same pertains to the prior years and that the assessee had requested for extension of the delivery of final products until 2026-27 on account of covid pandemic and various other reasons and the same was approved by NPCIL. Further, the ld. AR contended that the advance received by the assessee was utilized towards advance to suppliers and for inventory work in progress and the same still stands as "Advance received from customers" in....
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.... assessee under the head "Advance from customers" were advances were received from major parties viz. NPCIL and from other customers. The assessee's contention was that these advances were received in a normal course of business and were offered to tax in subsequent years as and when the project is completed. The assessee further contends that as against such advances the assessee has also had closing stock of work in progress (projects under execution) which amounted to Rs. 171.04 crores. The assessee further gave a summary of the outstanding advance as on 31.03.2021 and the revenue recognition against such advance which has been tabulated herein under: Particulars Advance as on 31 March, 2021 Revenue Recognised in subsequent year....
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....e lower authorities have not looked into the terms and conditions of the contractual obligation entered into by the assessee with the NPCIL from whom the assessee has received an advance of Rs. 58.49 crores. As the same requires factual verification with regard to the said transaction and also the fact that the advance received from other customers which aggregated to Rs. 84.82crores, the assessee has offered Rs. 77.30 crores, we deem it fit to remand these issues back to the file of ld. AO for verifying whether or not the assessee has offered the same to tax in the subsequent years as and when the project has been completed. We also direct the assessee to provide complete details along with documentary evidence to establish that the assess....