Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 411 - AT - Income TaxNature of receipt - Addition of amount received by the assessee from the contractors who delayed in execution of the work to make fit the rented premises for conducting business - case of the assessee before the authorities below that the contract shows that the amount of liquidated damages was fixed at ₹ 20,000/- per day irrespective of contract value and since the contract relates to bring the profit making apparatus into existence, any damage received on account of such delay amounts to capital receipt - HELD THAT:- Assessee reduced the cost of project by the amount of liquidated damages received and the cost of the project remained only at balance figure. It is also clear that until and unless the contractor carried out the desired modification, the premises was not fit to commence the business of the assessee and thereby related to bringing the profit making apparatus into existence. We, therefore, are of the opinion that inasmuch as the assessee credited the amounts received to the capital asset and treated it as capital receipts, the same cannot be brought to tax. Hence, this addition is directed to be deleted. Addition on assessee not producing the books of account - HELD THAT:- As submitted on behalf of the assessee that the operational revenue of the assessee is around ₹ 258 crores on all India basis and in so far as this particular expenditure this relates to the expenditure of giving gifts to the VIPs and Celebrities which would boost the business of the assessee. Having regard to the magnitude of the business of the assessee and the quantum of expenditure, we are of the considered opinion that such an expenditure could be allowed. Accordingly, the grounds raised by assessee are allowed.
|