TaxTMI 
TaxTMI 
2026 (4) TMI 390
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....ribunal (ITAT) wherein the tribunal directed the Assessing Officer (Ld. AO) to decide afresh after providing assessee an opportunity of being heard. The assessee is a foreign company registered under the laws of Russia. It is well experienced and have expertise in the engineering-design, manufacturing and supply of equipment sets for thermal, nuclear, hydro and gas-turbine power plants. In India, assessee entered into a contract with National Thermal Power Corporation Limited (NTPCL) for supply of equipment and to provide service facilities in connection with Balimela, Sipat and Barh projects which were involved in setting up of hydro-electric power generating facilities. During the year under consideration, the status of each project/ contract viz a viz their revenue/ status of operation is as under: Sr. No. Project Name Contract Number Site Status Revenue 1 Balimela OHPCLMZ/01/2003 Completed No income during subject year 2 Sipat Bid Document No. CS-9518-108-2 Completed No income during subject year 3 Barh CS-9558-110-20FC-COA-4523 Completed No income during subject year 2.1 Subsequently, the assessment in case of the ....
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.... 5 The Ld. AO. has erred in laws and facts by not considering the evidence and information as provided by the appellant. For sake of brevity, ground no. 4 & 5 have been merged and responded together as under: In the subject assessment order, the Ld. AO held that there has been an introduction in capital during the subject AY. Whereas, in fact, the appellant during the course of assessment proceedings duly submitted that OJSC is a project office of a Russian company as per FEMA guidelines and do not have any share capital. The amount shown under head share capital is in fact the balance of head office account where money is received from Head office for project office expenses and payments to be made on behalf of head office are controlled. As such there is no separate column in Income Tax return to show such an account. Hence, this balance has been controlled under the head Share capital' due to administrative reason. During the year under consideration, there were some liabilities/expenses to be met by project office on behalf of head office for which the funds were remitted by head office to project office account. These receipts were recor....
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....eal are interconnected and relate to the primary issue. The issue imbibed in the grounds of the appeal is adjudicated as under. 5.1 Ground no. 1 and 2: The said grounds are interrelated and thus have been dealt together. Vide these grounds, the appellant has challenged the AO's action of disregarding the books of accounts produced by the appellant and converting the taxable loss into taxable income as reported in the tax return. From the facts and findings in this case, the rejection of books of accounts by the AO without disclosing any specific defect upon which the rejection has been based is not justified. The AO is not justified in picking up only the income of the appellant from the books of accounts and ignoring the expenses incurred during the subject year, without providing any specific reason for his actions. 5.2 The appellant has also drawn my attention to the fact that documentary evidences were produced before the AO and proper explanation was provided by the appellant wherever required. In view of the overall discussion made above and respectfully following Hon'ble Supreme Court in CIT v. Woodward Governor [2009] 312 ITR 254/....
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....ds: "1 (i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the facts that, the AO rejected the books of accounts and disallowed the loss shown of Rs. 6,68,70,483/- in the return. The Ld. CIT(A) has mentioned in her order that the rejection of books of accounts by the AO is without disclosing any specific defect upon which the rejection has been made, is not justified. The Ld. CIT(A) has completely ignored the findings of AO in para 4 for rejection of books of account 2 (ii) Whether the CIT (A) has erred in deletion of addition of Rs 10,37,91,582/- as 'Unexplained Investment' u/s 69 of the Income Tax Act, 1961. The Ld. CIT (A) has treated this as a capital receipts from the shareholders/head office, but ignored the fact that even after repeated requests from AO, no evidence/material was provided by the assessee during the assessment proceedings, therefore, the AO was correct in adding the amount as 'Unexplained Investment' in absence of any documentary proof 3. Whether the CIT (A) has erred in deletion of addition of Rs. 30,18,797/-, as in the assessment order it was clearly mentioned that ....