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2019 (6) TMI 445 - HC - Income TaxAccrual of income - real income theory - Incomes arising on account of contractual work performed before termination of contract and pendency of litigation - demobilization and winding up of site operation costs - HELD THAT:- Tribunal noted that the parent Company was in severe financial crisis; the assessee could not receive any payment for a long time; eventually after delay of nearly four years, the Assessee could recover only 8.58% of the total claim. Interalia on such factors, the Tribunal applied the theory of real income and deleted the addition. In the meantime, the Assessee had also in the later year, claimed same amount by way of bad debts. The Tribunal while giving relief to the Assessee ensured that such claim of bad debts would stand deleted. We are broadly in agreement with the view of the Tribunal. With respect to the larger amount of ₹ 59.51 Crores, the claim was for damages for pre mature termination of the contract. The bills were raised after the termination of the contract and the contracted party did not even accepted the bills. With respect to the remaining amount of ₹ 26.47 Crores, the Tribunal has applied relevant facts and held that in view of the real income theory, no income tax can be levied on the Assessee at the relevant time. Any further, examination of the issue would be wholly academic in nature since in any case, the Assessee could have claimed the said amount by way of bad debts. Infact, such a claim was allowed, but in view of the further development, pursuant to the impugned decision taken by the Tribunal, such claim was ordered to be adjusted - Decided against revenue.
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