TMI Blog2018 (10) TMI 1652X X X X Extracts X X X X X X X X Extracts X X X X ..... Disallowance of miscellaneous expenses - expenses incurred under various heads even though the assesses has failed to furnish documentary evidence in respect of these expenses - Held that:- At time of appellate proceeding, the assessee has submitted the necessary evidence in support of his claim. However, some of the evidences were not amenable for cross verification. After going through the evidence adduced by Ld. Representative of the assessee, the CIT(A) disallowed the claim to the extent of 15% of ₹ 39,36,096/- which nowhere seems unjustifiable. Since the matter of controversy has duly been adjudicated by the CIT(A) by going through the relevant evidence on record and also disallowing the claim to the extent of 15% which was related to the non-production of evidence, therefore, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfered with. Addition on account of Management Charges paid to sister concern - as the business of the sister concern was quite different, therefore, no Management Charges of any kind was payable to it - CIT(A) restricted the part claim to ₹ 10,00,000/-- HELD T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers as to whether the TDS amount deducted on the above said payment has been claimed by assessee or it has been claimed by MIS. NEG MICON. Claim for TDS amount deducted on the above said payment, to some extent, will throw light on this issue. In the absence of any evidence supporting the claim of the assessee, it will be difficult for the tax authorities to accept the contention of the assessee - the assessee cannot be taxed on receipt to which it is not entitled to. Hence, we are of the view, the assessee may be provided with one more opportunity to substantiate its submissions with any credibility evidence. Disallowance of site management development expenses - HELD THAT:- The said payment was not properly mentioned and in details the name of persons has already been mentioned. The said payment was not verifiable, therefore, the CIT(A) disallowed the 15% of total expenses to the tune of ₹ 39,36,096/- which seems justifiable specifically in the circumstances, when no evidence of any kind was produced before us in support of his claim, therefore in the said circumstances, we confirmed the finding of the CIT(A) on this issue. Accrual of income - Addition of advance leas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed its return of income on 15.11.2007 declaring total income to the tune of ₹ 16,82,200/-. The return was processed u/s 143(1) of the I.T. Act, 1961. Therefore, the case was selected for scrutiny and notices u/s 143(2) 142(1) of the I.T. Act, 1961 were issued and served upon the assessee. Thereafter, disallowing the certain claim and also disallowing the claim u/s 80-IA(4) of the Act, the income of the assessee was assessed to the tune of ₹ 10,62,27,710/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who allowed the claim of the assessee in view of the provision u/s 80-IB(4) of the Act. Feeling aggrieved, the revenue has filed the present appeal before us. ISSUE NO. 1:- 5. Under this issue the revenue has challenged the allowance of the expenses incurred under various head on the ground of that the assessee failed to furnish the documentary evidence in support of claim. Before going further, we deemed it necessary to advert the finding of the CIT(A) on record: - 6.1 The AO has disallowed the above expenditure incurred under various heads as under: i. Foundation work - ₹ 1,05,000/- ii. Miscellaneous expenses - R.s10,93 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes raised by M/s. MEG MCON verification. V Electrical Work internal ₹ 3,27,000/-: These expenses were incurred for maintaining the electrical poles supporting with network of transmission lines laid by the assesses They comprise of expenses varying between ₹ 2,500/- to ₹ 60,000/- paid to various persons and a copy of details/list of payments were submitted during the course of appellate proceedings were also attached The assesses also added that it was in a position to produce supporting for these expenses at remand proceedings, if required. 6.5. As mentioned earlier, all papers and evidences were forwarded to the Assessing Officer. The Assessing Officer in remand proceedings has held that the appellant had furnished self-serving details of various expenses not backed by supporting evidences and in some cases even the addresses of the parties have not been mentioned. 6.6. In response to this, the appellant submitted that it attended the remand proceedings to justify the details forwarded by the CIT(A) and supporting evidences were not asked or called by the Assessing Officer in case he wanted further documents to verify the claim he would have ailed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance to the extent of ₹ 5,90,414/- is confirmed and the appellant gets relief of ₹ 33,45,682/-. This ground of appeal is partly allowed. 8. On appraisal of the above mentioned finding, we noticed that at the time of appellate proceeding, the assessee has submitted the necessary evidence in support of his claim. However, some of the evidences were not amenable for cross verification. After going through the evidence adduced by Ld. Representative of the assessee, the CIT(A) disallowed the claim to the extent of 15% of ₹ 39,36,096/- which nowhere seems unjustifiable. Since the matter of controversy has duly been adjudicated by the CIT(A) by going through the relevant evidence on record and also disallowing the claim to the extent of 15% which was related to the non-production of evidence, therefore, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfered with at this appellate stage. Accordingly, we decide this issue in favour of the assessee against the revenue. ISSUE NOs. 2 to 4:- 5. All these issues are in connection with the allowance of claim of the assessee in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cut finding that the appellant s case falls in sub-clause (b) of 80IA(4)(iv) of the given a clear cut finding that the appellant's case falls in sub-clause (b) c (A) (4)(iv) of the l.T Act. 1961 and so the appellant was entitled for deduction profits derived from network of new lines for transmission and distribution of power. 8.1. During the course of appellate proceedings attention of the appellant was drawn to the without prejudice findings of the Assessing Officer at pages 21 to 25 the assessment order, whereby the Assessing Officer has held that the appellant ha credited an amount of 78,67,421/- being development charges, lease rent ₹ 48.73.600/- as income from operations and claimed deduction u/s,80lA(4)(iv)(b) ON these amounts also though they were not directly derived from the profits gains of eligible business of the appellant. The Assessing Officer was also of the view interest of ₹ 1,98,781/- and dividend on mutual funds of ₹ 6,78,183/- shown as other income has also been included which is not proper 8.1.1. The appellant clarified that it has claimed deduction u/s.80IA(4)(iv)(b) out of transmission charges income of ₹ 5,65,17,629/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the appellant's claim of offering the above amount in the current year under the head transmission charges and claiming corresponding deduction by way of earning a net income of ₹ 3,41.50,391- for laying of network of transmission lines for distribution of power has been negated by Taxation Authorities. It has been there consistent stand that above sum of ₹ 3,46,80,000/- belongs to immediately preceding year. 8.2.2 At the appellate stage, the appellant's contention was rejected and the action of the Assessing Officer was upheld. In view of the above, the appellant is not entitled for deduction u/s.80IA(4)(iv)(b) in the current year as advance receipt of ₹ 3,46,80,000/- has been taxed in the immediately preceding assessment year. 8.2 3. As per Form No.10CCB computation for claiming deduction u/a 80IA(4)(iv)(b), the appellant had shown income from transmission lines laying at ₹ 5,65,17,629/-which includes the sum of ₹ 3,46,80,000/-. Once this is excluded the income under this eligible business comes down to ₹ 2,18,37,629/- whereas the cost of expenditure of laying of transmission lines as per computation in Form No. l0CCB comes to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) erred in allowing the deduction claimed u/s80-IA of the I.T. Act, 1961. 3. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 11. Brief facts of the case are that the assessee filed its return of income on 31.10.2002 declaring total income to the tune of ₹ 16,66,750/-. Thereafter, the assessee filed a revised return of income declaring total income to the tune of ₹ 16,31,150/- u/s 115JB of the Act and income at Rs.Nil under the normal provision. The return was processed u/s 143(1) of the Act on 28.02.2003. The case of the assessee was taken up for scrutiny. It was observed that the assessee has claimed the deduction u/s 80-IA of the Act @ 100% of the profits derived from the business resulting in Nil. The assessee failed to furnish the Form No.10CCB as laid down in Rule 18BBB of the Act resulting in the escapement of income to the tune of ₹ 16,31,150/-, therefore, the notice u/s 148 of the Act was issued on 13.03.2008 and served upon the assessee. Notice u/s 142(1) of the Act was also issued and served upon the assessee. The assessee company paid the sum of ₹ 36,00,000/- to its sister concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same reasons as in the case of the current year. Further, The AO also considered the applicability of 40A(2)(b) of the Act to the payment in view of common management of the appellant company and King Prawns. My predecessor vide order dt.05.04.2007 in Appeal No. CIT(A)-IX/ACIT-9(2)/IT-269/2006-07 held that the appellant had utilized services of King Prawns for developing the infrastructural facility for its wind farm activities. She observed that King Prawns had also entered into an agreement with German Partly for technical consultation for the similar project to be set up at Palghar and, therefore, it was engaged in development of such project. However, she observed, that the appellant was under the direct control and supervision of common management and therefore, the human probability of diversion of profit could not be rejected. She also observed that the appellant had not brought on record any material to show as to how the amount in question was reasonable for the type of services rendered by M/s. King Prawns Ltd. She therefore, agreed, with the AO that the provisions of section 40A(2)(b) would be applicable and considering the fact that out of the impugned sum, King Prawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, nevertheless it is not a case of the AO that the services actually rendered were only make belief. It may also be true that the said King Prawns was incurring losses but that itself would not be the ground for disallowance of such expenses in the hands of the appellant company. Further AO has not disputed the fact that the principal sanction was given to the said King Prawns for setting up of such project which also indicate that the said King Prawn was having the requisite capabilities to set up such project and therefore the AO should have taken note of such facts which clearly depict the capabilities of the said King Prawns. Further it is also true that the said King Prawn had also entered 6 into an agreement with German Party for technical consultation for the similar project to be set up at Palghar and therefore it is not in dispute that for all practical purpose the said M/s King Prawns was engaged in such project and it is only to facilitate the easy working the project has been transferred to the appellant company and therefore considering these facts I am not inclined to accept the AO s action in this regard in disallowing the entire amount as expenses. However it is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, this issue is decided in favour of the assessee against the revenue. ISSUE NO. 2:- 15. Issue no. 2 is in connection with the allowance of claim u/s 80-IA of the Act by CIT(A). The assessee has constructed the Wind Mill Farm and laying of network of transmission lines for transmission of electricity generated by each of the wind mill ( wind operated energy generated or WEG) set up in the farm from their respective WEG to the sub station of MSEB for onward transmission and distribution through state of Maharashtra. In respect of the said activity, the assessee claimed the deduction, however, the assessee did not annexed Audit Report in Form No.10CCB which was mandatory for filing the return of income. The assessee was generating the electricity through wind mill and transmitting and distributing. The claim of the assessee was declined as the assessee assigned the work of transmission to the other company. The claim of the assessee was allowed by the CIT(A) and the relevant finding has been given in para no. 21 to 29 which are hereby reproduced below: - 21. I had asked the AO to examine the evidences furnished by the appellant in support of laying down the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Board (MSEB) to install 30 MW Wind Farm Complex (10x600 KW + 1x750 KW) capacity each at Bramanwel district Dhule Maharashtra. The said NOC issued vide letter no. 34878 dt. 18.9.2001 of the Chief Engineer (Commercial) MSEB Bandra , Mumbai. It is seen from the letter that M/s. Gesallchaft Zur Nutzung Erneurerbarer Enerergien URS Mbh (GNEE) had been issued letter of intent (LOI) by Government of Maharashtra (GOM) for development of Wind Operated Electric Generator (WEGs) in Maharashtra State and the GOM had also executed an agreement for the same with GNEE on 29.01.1999. It is mentioned that the appellant signed MOU with GNEE on 29.1.1999. It is mentioned that appellant signed MOU with GNEE on 16.10.2000 for setting up WEG Project at Chatale, Tal- Palghar Dist: Thane in the 200 Acre of land to be provided by the appellant. The appellant vide letter dt. 28.8.2001 applied for 30 MW Project at Ved, Tal-Palghar Dist- Thane and requested to issue NOC. Further vide letter dt. 4.9.2001 the appellant intimated that it will not pursue NOC for 70 MW under the above LOI. It is further mentioned that the appellant vide aforesaid letter dt 4.9.2001 and another dt. 6.9.2001 requested to issue th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of 15% supervision charges. The letter further mentons that appellant had requested vide application dt. 15.10.2001 to allow it to construct only single circuit and with only one bay. The Chief Engineer, therefore, sought approval and sanction so that necessary demand of supervision charges could be made. 21.4 Subsequently, the appellant entered into the Cooperation Agreement with TWEI on 5-11-2001 which is shown to be engaged in the business of assembling, sale, commissioning and maintenance of wind turbine and turn-key wind power plans The agreement refers to the NOC for 30MW issued by Govt. of Maharashtra to the appellant whereby it was allowed right To install and develop on turn-key basis Wind Farm (project) including overhead lines from The project site in Bramanwel lo the MSEB designated point of interconnection The agreement also mentions that for (his purpose The applicant had already been granted land by MIDC at Survey no 176 admeasuring 750 acres at Bramanwel. As per the scope of work, TWEI was to a) Supply, install and commission Wind Turbine Generators (WTG) in accordance with the contract entered into between TWEl and the final customers. b) provide all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in rotation to the points front faying of such network of new fines for transmission or distribution, (c) undertakes substantial renovation and the existing network o! transmission or distribution fines at any time during the period beginning on the 1st day of April 2004 and ending on the 31st day of March, 2011. Explanation -For the purposes of this sub-clause, plant and machinery in the network o! transmission or distribution lines by at Seas! fifty pet cent of the book value of such plant and machinery as on the 1st day of April, 2004. Sub-clauses (a), (b) and (c) of s 80IA(4)(iv} provide for deduction in the cases of three of undertakes ViZ tne one which is engaged m generation or generation and of power second, which start transmission or distribution lines, and the third, undertakes substantial renovation and modernization of the existing network of transmission or distribution lines All these three clauses deal with the Three different categories o' The undertaking These three Types of undertakings referred To the said sub clause (a) (b) and (c) are different and independent of each other Thus while dealing with V , if one duty-'clause, inference need n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oom for any confusion between the two propositions. 21 9 I therefore, hold that the appellant is entitled to deduction of profit derived from laying of network of new lines for transmission or distribution of power The appendant is seen to have commissioned windmills al locations of four out of seven windmill owners in the current year It is. therefore, entitled this year to deduction of profits derived from laying of transmission lines connecting These (our windmills only These no dispute on the quantum of profit of ₹ 12,64,750 showed in the Audit Report in Form No 10CCB. I, therefore, direct the AO to deduction of the said sum u/s 80-IA(4)(iv)[b}. 16. On appraisal of the above mentioned finding, we noticed that after the examination of relevant document, the CIT(A) was of the view that the transmission line connecting to the wind mills was to be laid by the appellant (contractor) which was the part and parcel of the business, therefore, the assessee was entitled for deduction of profit derived from laying of transmission line connecting 4 wind mills out of 7 wind mills which were working u/s 80IA(b) of the Act. At the time of argument, the Ld. Representative of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansmission or distribution lines by at least fifty per cent of the book value of such plant and machinery as on the 1st day of April, 2004 . 5. The case of the assessee is that it is covered by clause (b) of sec. 80IA(4)(iv), since it is transmitting or distributing electricity by laying a net work of new transmission or distribution lines. There is no dispute with regard to the fact that that the assessee has laid the net work of transmission or distribution lines during the time period specified in the above said section. The assessing officer took the view that the assessee has to cumulatively comply with clauses (a) to (c) of sec. 80IA(4)(iv) in order to become eligible for deduction u/s 80IA of the Act. Since the assessee is not generating power as specified in clause (a), the has taken that view that the assessee becomes ineligible to claim deduction u/s 80IA of the Act, since there is a failure on the part of the assessee to comply with clause (a). Accordingly, the assessing officer rejected the claim made by the assessee. The Ld CIT(A), however, held that the clauses (a) to (c) of sec. 80IA(4)(iv) are mutually exclusive and accordingly he did not agree with the view ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shree Umaid Mills Ltd., reported in (2009) 29 SOT 278, wherein the has observed as under:- These three types of undertakings referred to in the said sub-clauses (a), (b) and (c) are different and independent of each other. Thus while dealing with one sub-clause, inference need not and cannot be drawn from the other sub- clause. Accordingly, we uphold the view taken by Ld CIT(A) that clauses (a), (b) and (c) of sec. 80IA(4)(iv) are mutually exclusive. 7. The next issue relates to the interpretation of clause (b) of sec. 80IA(4)(iv) of the Act. The Ld CIT(A) has taken the view that the said clause provides exemption only to the profit derived from laying a network of new transmission or distribution lines. Since the assessee was deriving income from sale of electricity, the Ld CIT(A) has held that the assessee is not eligible for deduction u/s 80IA in respect of profit derived from distribution of power. For arriving such a conclusion, the Ld CIT(A) has placed reliance on the proviso to clause (b) of sec. 80IA(4)(iv) of the Act. 8. At the cost of repetition, we extract below clause (b) and the proviso there under to sec. 80IA(4)(iv) of the Act. (iv) an undertaking wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits derived from transmission or distribution of power through the new network . As per the Circular, the intention of the proviso is to restrict the deduction u/s 80IA only in respect of profit derived from transmission or distribution of power through the new network of transmission or distribution lines. 10. We shall also try to understand the meaning of the proviso to clause (b), extracted above. Sub-sec. (1) of sec. 80IA provides that the profits and gains derived by an undertaking referred to sub-section (4) are eligible for deduction u/s 80IA of the Act. Clause (iv) of sub-section (4) of sec. 80IA includes an undertaking which starts transmission or distribution by laying a network of new transmission or distribution lines at any time during the time period specified in that clause. Hence profits and gains derived by such kind of undertaking are eligible for deduction under sub-sec. (1) of sec. 80IA of the Act upon satisfying the main condition that the transmission or distribution was carried out by laying a network of new transmission or distribution lines. The proviso, however, states that the deduction shall be allowed only in relation to the profits derived fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the new network. 17. On seeing the facts and circumstances of the present case which is quite similar to the decision of the Hon ble ITAT in the case of Kinfra Exports Promotion (supra), we are of the view that the CIT(A) has rightly allowed the claim of the assessee in view of the provision u/s 80-IA of the Act, therefore, the finding of the CIT(A) is quite correct which is not liable to be interfere with at this appellate stage. Accordingly, this issue is decided in favour of the assessee against the revenue. In the result, appeal filed by the revenue is hereby ordered to be dismissed. ITA NO. 547/M/2012:- 18. The facts of the present case is quite similar to the facts of the case as discussed in ITA. No.4518/M/2011, therefore, there is no need to repeat the same. The matter of controversy is also the same in which the revenue has challenged the allowance of the claim u/s 80-IA(4) of the Act. The finding in the above mentioned in ITA. No.4518/M/2011 is quite applicable as mutatis and mutandis. Accordingly, we affirmed the finding of the CIT(A) and dismissed the appeal of the revenue. ITA NO. 173/M/2012:- 19. The facts of the present case is quite s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (India) P. Ltd. The work could not be completed before the 31.03.2006. The said amount has been treated as liability in the balance-sheet as on 31.03.2006 which has been offered as its receipt in the F.Y 2006-07, therefore, in the said circumstances, the advances is not liable to be treated as income in the F.Y. 2005-06 which has been wrongly confirmed by the CIT(A) in F.Y. 2005-06. No doubt, in the financial statement of F.Y. 2005-06, the assessee has treated the receipt of the amount of ₹ 3,46,80,000/- as advance against transmission charges from M/s. Neg Micon (India) P. Ltd. The receipt has been treated as income in the next F.Y. 2006-07. It on account of accounting principal considered by the assessee in its books of account, the situation nowhere seems violated the principal of accountancy, therefore, in the said circumstances, we are of the view that the assessee has rightly offered the said receipt as income in the F.Y. 2006-07 the period in which the work has been completed. Accordingly, we set aside the finding of the CIT(A) on this issue and decide this issue in favour of the assessee against the revenue. ISSUE NO. 2:- 22. Issue no. 2 is in connection wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d issued bills of similar amount in the name of MIS. NEG MICON as the amount was only to be routed through us by MIS. NEG MICON as the amount was only to be routed through us by MIS. NEG MICON and as the persons to whom payments were made by us were not our contractors in respect of these bills no tax was deductible at source. We further submit that since no part of this amount had effectively come to us the question of said amount forming a part of our income also does not arise. It may be placed on record that this additional responsibility of supervising the work and making payment on behalf of MIS. NEG MICON was taken over by us totally out of business expediency because by that we were able to have control over the quality as well completion of work within reasonable period since the very earning of incme by as starts only on commissioning of the powr generation and its transmission to MESB though ultimately even in this process we have earned a generation and its transmission to MESB though ultimately even in this process we have earned a sum of ₹ 73.22,4131 which sum was retained by us out of the amount payable to the contractors on behalf of MIS. NEG MICON as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the4 sub-contractors. Since the assessee has not claimed these as expenses, the payments made to subcontractors do not come under the purview of section 40(a)(ia) of the Act. However, they are receipts of the assessee from MIS. NEG MICON as TDS has been deducted on such bills and claimed by the assessee. Hence, ₹ 2,83,29,387/- is added to the income of the assessee. 4.3 In the course of appeal proceedings assessee s AR has submitted as under: In this regard and in continuation to what has been stated hereinabove my only submission, in support of the contention that the said sum is not required to be added in the case of appellant company as an alleged unrecorded receipt, because once the Ld. AO herself has accepted the fact that this sum which is simply routed through assessee has infact been passed on to other for carrying out work for MIS. NEG MICON and the sald payment has not been claimed as a deduction in the books of accounts, the question of amount received even arithmetically which is meant for giving to others legally and as per principles of accountancy cannot be treated as unrecorded receipt, as in the process. Assessee has correctly neither shown the rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the facts of the case as discussed in ITA. No.4518/M/2011, therefore, there is no need to repeat the same. 25. The assessee has raised the following grounds: - 1. As regards treatment of ₹ 3,46,80,000/- (Transmission charges) 1.1 The Id. CIT (A) - 20 erred in law and on facts in not considering the amount of ₹ 3,46.80,00O/- accrued as Evacuation' Transmission Charges as income of the year when the said amount was credited in the profit and loss accounts for the year ended 31 -03-2007 (i,e Assessment year 2007-08). 1.2 The Id. CIT (A) - 20 erred in law and on facts in treating the amount of 3,46,80,000- as income of the previous year 2005-06 (i.e. A.Y,2006-07) on receipt basis. 1.3 The Id. CIT (A) - 20 erred in law and on facts in not considering the fact that the appellant company follows ' Mercantile system of Accounting and as such treated the amount of ₹ 3,46,80,000, - as income of the earlier year i.e. year ended 31-03-2006. 2. As regards addition /disallowance of ₹ 5,90,414/- 2.1 The Id. CIT (A) - 20 erred in law and on facts in disallowing the amount of ₹ 5,90,414/- Incurred by the appellant company toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o different from he position as it existed at the assessment stage. The additions and disallowances were made at assessment stage in a summary manner without confronting the appellant. At remand stage to the position remained unchanged. 6.9. On the other hand, the appellant had furnished details of expenditure incurred which prima-facie discharges its onus. However, it is observed that some amounts have been debited under the head miscellaneous expenses without further details except the name of the person to whom payment is made. This is not contradicted by the AR of the appellant and, therefore, even if the same is vouched it cannot be said that they are amenable to cross-verification. In these circumstances, it would be fair and reasonable to disallow 15% of ₹ 39,36,096/- amounting to ₹ 5,90,414/- which will take care of those disallowance which may not be fully substantiated. Accordingly, disallowance to the extent of ₹ 5,90,414/- is confirmed and the appellant gets relief of ₹ 33,45,682/-. This ground of appeal is partly allowed. 28. On appraisal of the above said finding, we noticed that the said payment was not properly mentioned and in details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d power project for which it had taken land on long term lease from MIDC which was developed and divided into plots and given to on sub-lease to various wind mill owners through wind mill turbine suppliers for a period of 25 years. From these owners, owners the above amount was received for the entire Period of 25 years as deposit/advice to by adjusted over-a period of 25 years on pro-rata basis towards annual lease. The lease agreements were also filed. Since the amount received pertain to a period ot-25 years even-though the tax was deducted at source as per provisions of the Law at the time of receipt itself the same was to be offered for tax in a period of .26 years pro rata-basis and accordingly pro rata credit for TDS also has to allow in the year in is offered. It was for this reason that the assessee company has offered the income of ₹ 6,44,800/-/- pertaining to year under appeal though inadvertently credit for the entire IDS was claimed in the year itself. 7 6. In the remand report the Assessing Office^ reiterated the fact that since credit for entire TDS has been claimed in time current year the corresponding deposit/advance in entirety has also to be-taxed. Tin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention. The Hon'ble CIT-9 Mumbai passed an order u/s.263 for A.Y. 2006-07 dated 15.10.2009 wherein one of the issue addressed was this. The appellant claimed before the Hon'ble CIT-9 that it had land various parties from which a sum of ₹ 9.60 crores was received as deposit which was to be appropriated toward rent every year in equal proportion for a term of 25 years. Thus, according to the appellant only a sum of ₹ 38,40,600/- 1/25th was t axable as income in the A.Y. 2006-7. It offered to withdraw the excess claim of TDS of ₹ 27,25,203/- proportionate to the balance e rent of ₹ 9,21,60,000/-. The Hon ble CIT-9 accepted the claim and directed the AO to withdraw the excess claim of TDS in terms of provisions of Section 199 of the I.T. Act, 1961. The AO thereafter, passed the order on 27.12.2010 giving effect to the order u/s 263 of the CIT wherein no addition was made at the balance rent of ₹ 9,21,60,000/- 7.8.3 The same principle line was adopted by the CIT -20 while deciding the appeal for A.Y.2002-03 dated 20.03.2011 wherein on receipt of advance deposit of ₹ 1,19,62,000/- only ₹ 4,78,480/- being 1/25th of the above sum was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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