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2018 (5) TMI 947 - AT - Income TaxDisallowance of business loss - AO/CIT(A) subjecting business income arising from Project Office of the assessee under the O & M contract as fees for technical services - Held that:- We set aside the findings of the CIT(A) and direct the AO to treat the amount received under the O & M agreement as business income under article 7(3) of DTAA between India and Japan. Treatment of payment made to Express Transport Private Limited [ETPL] as contingent liability - Held that:- There is no evidence brought on record to suggest that ETPL has repaid this amount to the assessee. Clause referred by the ld. DR is from agreement made on 18.9.1992 and we are in the month of May 2018 more than 25 years have since elapsed but nothing to the contrary has been proved by the Revenue. Revenue authorities have not made any verification from ETPL to disprove the payments made by the assessee. There are specific provisions in the Act by which any amount recovered by the assessee can be taxed as income in the year of receipt. Therefore, in our understanding of law and the facts, the liability to pay has definitely crystallised during the year under consideration and being ascertained liability incurred in the ordinary course of business, the same has to be allowed. We accordingly set aside the findings of the CIT(A) and direct the AO to delete the addition Taxability of sum received on account of supervision, erection and maintenance of a gas turbine plant for Basin Bridge Power House TNEB Project @ 10% u/s 44BBB - Held that:- As in assessee’s own case for A.Y 1996-97 and 1993-94 and in A.Y 1997-98 and 1998-99 decided issue in favour of assessee as held that in order to determine the total cost of project, each activity has to be evaluated separately and to ensure that all the costs are recouped y the contractor, at times, major ancillary activities are billed separately. But that does not mean that these activities are independent of constructing or erecting the plant. With regard to repairs and maintenance also, the submission of the learned counsel can be accepted that they might have been carried out during construction or trial runs before handing over the project completely in proper shape. Therefore, the CIT(Appeals) was justified in directing the Assessing Officer to determine the income at 10% of the total receipts. Taxability of supervision fees received from M/s Maruti Udyog Ltd. - Held that:- As considered by the Hon'ble Delhi High Court in assessee’s own case for assessment years 1992-93 to 1996-97 [2014 (3) TMI 291 - ITAT DELHI] wherein the Hon'ble High Court has held that supervision fee is taxable under Article 12(2) of the DTAA and concur with the view of the Tribunal that FTs was liable to be taxed at 20% under Article 12(2) of the DTAA. The question was accordingly answered in the negative i.e. in favour of the assessee
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