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2021 (12) TMI 819 - AT - Income TaxDirect expenses incurred on behalf of the client shown in the Contract Account - HELD THAT:- Issue is squarely covered by the order of this Bench of the Tribunal in the assessee’s own case for assessment year 2010-11 [2019 (5) TMI 1669 - ITAT LUCKNOW] held that it remains undisputed that the labour cess is part of the contract account; that this being so, the assessee is correct in contending that addition, if any, is maintainable only in the hands of the client of the assessee Corporation and not in the hands of the assessee; that the provisions made for labour cess, do not stand debited to the profit & loss account and the profitability of the Corporation in the form of centage earned as gross profit, is not affected; and that the assessee Corporation is only a collecting agency for the purposes of the labour cess and deposit thereof in the Government account. The facts for the year under consideration are, mutatis mutandis, exactly similar. The issue is found to be covered squarely in favour of the assessee. We further notice that in assessment years 2011-12 [2019 (8) TMI 46 - ITAT LUCKNOW] and 2012-13.[2021 (2) TMI 1229 - ITAT LUCKNOW] also, an identical issue had come up for consideration before the Lucknow Bench of the Tribunal, wherein also, the Tribunal decided the issue in favour of the assessee. Therefore, respectfully following the order of the Tribunal in the assessee’s own case for the preceding years, i.e., assessment years 2010-11, 2011-12 and 2012-13, the grievance of the assessee is found to be justified and is accepted as such. Accordingly, the ground of appeal taken by the assessee is allowed and the addition is deleted.- Decided in favour of assessee. Addition on account of prior period expenses - HELD THAT:- The Tribunal, for assessment year 2010-11, held that the liability arose in the year under consideration, as is evident from the bill raised by the Electricity Department on 30/10/2019; that moreover, as claimed by the assessee, the amount pertains to the contract account and, therefore, in case the addition is made, an equivalent amount is to be reduced from the work-in-progress; and hence, no infirmity was found in the order of the ld. CIT(A) on this issue - grievance of the Revenue is not found to be justified and accordingly, ground of appeal taken by the Revenue is rejected. Accrual of income - Addition on account of interest on ‘Client Interest Account”- HELD THAT:- As decided in own case for the preceding assessment years, i.e., 2010-11, 2011-12 and 2012-13 CIT(A) has rightly observed that the interest earned by the assessee on unutilized fund is credited to the respective accounts and are the income of the concerned clients and not of the assessee. We do not find any infirmity in the well-reasoned order of the ld. CIT(A) on this issue. We accordingly confirm his order on this issue and reject ground - Decided against revenue.
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