TaxTMI 
TaxTMI 
2026 (7) TMI 1639
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....sallowance of expenses incurred on completed projects to the extent of Rs. 1,08,77,906 On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) 49 ['ld. CIT(A)'] erred in confirming disallowance of expenditure of Rs. 1,08,77,906 incurred during the defect liability period in respect of completed projects, without granting adequate opportunity to the Appellant to furnish supporting details and documentation. The Appellant, therefore, prays that the order of the Id. CIT(A) be set aside and the matter be restored to the file of the Id. CIT(A) for fresh adjudication after granting the Appellant an adequate opportunity of being heard. The Appellant craves leave to add to, alter or amend, modify or delete, the aforesaid ground of appeal, if and when necessary. 2.1. Revenue has raised the following grounds of appeal: 1. On facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 2,19,99,037/- made by the Assessing Officer. 2. On facts and circumstances of the case and in law, the CIT(A) has failed to appreciate that the claim of bad debt....
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....Ld. AO's ground and uphold the order of the Ld. CIT(A) to this extent. Ground no. 2 Order of the Ld. CIT(A) allowing the claim Bad Debt written off does not amount to allowing prior period expenses On the facts and in the circumstances of the case, the allegation that the allowance of bad debts written off allowing as 'prior period expenses' being expenses incurred on completed projects in bad in law; insofar as the business of the assessee continues and only the particular project was completed, the conditions of section 36(1)(vii) read with section 36(2) are satisfied, and the deduction has rightly been allowed. In view of the above, it is respectfully prayed that this Hon'ble Tribunal may dismiss the Ld. AO's ground and uphold the order of the Ld. CIT(A) to this extent. Ground no. 3: the Ld. CIT(A)'s order correctly ypheld deletion of addition for employee contributions of Rs. 8,40,782 The Ld. CIT(A), after careful verification of records, rightly held that the employees' contribution amounting to Rs.8,40,782 was duly paid within the prescribed due dates as mandated by law. The contention that the Ld. CIT(A) erred in deleting....
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....ee is in appeal before the Tribunal. 4. Details of entire expenditure of Rs. 3,16,35,781/- is extracted below in a tabulated form: 4.1. On the above, ld. AO held that assessee has claimed these expenses which relates to revenue stream of previous year since the projects in this regard had already been completed and relevant revenue was booked in the earlier years. According to him, allowing these expenses in the year under consideration violates the basic principle of accounting that is the „matching principle' as there is no income offered on these projects in the year under consideration. He thus, treated the said claim of expenses as prior period expenses in absence of matching revenue and made the disallowance. 4.2. Contrary to this, contention of the assessee before the authorities below is that it had provided project-wise details of expenses incurred along with justification for the expenses so incurred, revenue of which was recognized over the duration of the projects in the preceding years. Assessee explained that in the line of business in which it is engaged, servicing of DLP forms integral part of construction contracts. Depending upon the nature of the p....
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....by taking into account documentary evidence placed on record by ascertaining if the liability crystallized during the year orotherwise, so as to allow the claim of the assessee under section 37(1). 5.1. We note that assessee has placed on record relevant documentary evidence before us in the paper book. Assessee has explained its case before us to have a legitimate claim under section 37(1) for the expenses incurred by it during the course of its business to mitigate the defects arisen during the DLP after the completion of the relevant project. Having considered the facts and documentary evidences placed on record, we find it appropriate to accept the submissions of the ld. Counsel for the assessee to remit this issue back to the file of ld. CIT(A) for its meritorious adjudication by taking into account documentary evidence along with explanation given by the assessee so as to consider the same for its allowability under section 37(1). Needless to say, assessee be given reasonable opportunity of being heard and to make any further submission if so, required in this regard. We also direct the assessee to be diligent during the course of hearing fixed by the ld. CIT(A) for its ex....
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....s books of account which forms part of the paper book placed on record. Relevant details in this regard as reference are extracted below: Accounting Treatment at the time of recording the revenue Particulars Debit Credit Power Grid Corporation of India Ltd. A/c ... Dr 59,29,386 To Revenue from operations 79,05,848 To Revenue from operations -11,85,877 To Revenue from operationa -7,90,585 Net Revenue recorded amounting to INR 59,29,386, Please refer page no. 733 and 734 of Factual Paperbook. Particulars Debit Credit Bad Debts A/c ... Dr 46,06,601 To Power Grid Corporation of India Ltd. A/c... 46,06,601 Profit & Loss A/c ... Dr 46,06,601 To Bad Debts A/c ... 46,06,601 Occurrence of actual bad debts of INR 46,06,601 out of total receivable of INR 59,29,386 Particulars Date Amount (In INR) Receipt 30-Apr-13 6,99,788 Receipt 01-Jun-16 6,22,996 Credit Memo (Amount not received from Power Grid Corporation of India Ltd.) 15-Dec-17 46,06,601 Total 59,29,386 Act....
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....ed under the relevant statute. Revenue has relied upon the decision of Hon'ble Supreme Court in the case of Checkmate Services Private Limited v. CIT (2024) taxmann.com 178 (SC). 8.1. In this regard, assessee had reported in its tax audit report, in clause 20(b) all the details relating to deposit of employees' contribution to PF/ESIC which according to it, is within the due date prescribed under the relevant Act. Details in this regard is extracted below for ready reference: Sr no. Nature of payment Sum received from employees Due date for payment Actual date of payment 1 PF 2,38,17,081 15-05-2017 15-05-2017 2 2.58,89,680 15-06-2017 15-06-2017 3 2.55,58,462 15-07-2017 15-07-2017 4 2,50,00,322 15-08-2017 14-08-2017 5 2,86,54,986 15-09-2017 15-09-2017 6 2,88,18,916 15-10-2017 15-10-2017 7 2,54,79,685 15-11-2017 15-11-2017 8 2,81,08,217 15-12-2017 15-12-2017 9 2,70,66,866 15-01-2018 12-01-2018 10 2,81,35,119 15-02-2018 15-02-2018 11 3,00,17,....