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2018 (10) TMI 1652 - AT - Income TaxDisallowing claim u/s 80-IA(4) - distribution of power within the industrial park area - AO rejected the claim of the assessee in view of the provision u/s 80-IB(4) - CIT-A deleted the addition - HELD THAT:- Assessee placed reliance upon the decision of the Cochin Bench titled as Kinfra Exports Promotion Industrial Parks Ltd. V. Dy. CIT [2013 (9) TMI 443 - ITAT COCHIN] in which it was specifically held that the assessee would be entitled for deduction u/s 80-IA of the Act in respect of profit derived from transmission or distribution of power through network of new transmission or distribution of lines. CIT(A) has also relied on case of CIT Vs. ABG Heavy Industries Ltd [2010 (2) TMI 108 - BOMBAY HIGH COURT] where in the similar situation the claim of the assessee was allowed u/s 80IA of the Act. Taking into account, all the facts and circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. 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 THAT:- As decided in own case the finding of the AO that M/s King Prawns Ltd. [sister concern] is not in the business of power generation, is not factually incorrect. In fact M/s King Prawns Ltd. on 16th Oct., 2000, entered into MOU with German Firm to set up a Wind farm on its site at Palghar Dist. Thane and this wind farm has to be set up through a subsidiary company of Kings Prawns Ltd. i.e. M/s K.P. Power Pvt. Ltd. The MOU could not materialize. M/s King Prawns Ltd. had entered into agreement with German party for technical consultation for a similar project. It is also true that M/s King Prawns Ltd. has spent about ₹ 12 lakhs in respect of its agreement with the assessee. Under these circumstances, we uphold the order of the CIT(Appeals) wherein the disallowance is restricted to ₹ 10 lakhs . Accrual of income - Treating ‘Advance against Transmission charges’ as income of the F.Y. 2005-06 - as per assessee said amount has been treated as liability in the balance-sheet as on 31.03.2006 - HELD THAT:- 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. Undisclosed Business receipts - TDS has been deducted u/s 194C on the impugned payment and TDS certificate has been issued in the name of the assessee - no reason for MSEB to route the payment payable to MIS. NEG MICON through the assessee - HELD THAT:- We noticed that MSEB has deducted TDS on the amount of ₹ 2,83,29,387/- which is claimed to have been received by assessee on behalf of MIS. NEG MICON. As rightly pointed out by CIT(A) the assessee did not substantiate its submissions with any correspondence/agreement entered between the assessee and MIS. NEG MICON. It is also not clear from the orders 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 lease rent received - lease rent is received in advance by the appellant company from various sub-lessees for the entire period of 25 years of the sub-lease as a deposit and out of adjusted in each year - HELD THAT:- The total lease rent was to the tune of ₹ 2,75,20,000/- and 1/5th comes to the tune of ₹ 11,00,800/- which was liable to be taxed in the further 25 years. Since the finding of the CIT(A) in the earlier year nowhere changed or verified and we also finding it justifiable to assess the 1/25th rent in the next 25 years, we are of the view that the finding of the CIT(A) is quite justifiable which is not liable to be interfere with at this appellate stage. Accordingly, this issue is decided in favour of the revenue against the assessee.
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