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2021 (5) TMI 798 - AT - Income TaxUnderstatement of receipts in respect of the project by following percentage of completion method of accounting - HELD THAT:- Tribunal has decided the issue in favour of the assessee in assessment year 2007-08 [2020 (7) TMI 189 - ITAT MUMBAI] and in assessment year 2009-10 [2020 (8) TMI 842 - ITAT MUMBAI]. Facts being identical, respectfully following the consistent view of the Tribunal expressed in assessee’s own case in preceding assessment years referred to above, we delete the addition made by the assessing officer and sustained by learned Commissioner of Income Tax (Appeals). These grounds are allowed. Addition on account of excess of progress billing over inventories - HELD THAT:- As relying on own case we find that the assessee has accumulated cost as well as revenue under these projects in the Balance Sheet by following completed contract method. The revenue has accepted such accumulation during AYs 2004-05 & 2005-06 and this is the third year of accumulation under the projects. It is not the case of the revenue that the income under these projects have not been offered to tax in subsequent years. No case of revenue leakage has been established before us. Therefore, the action of revenue in disturbing the consistent method of accounting being followed by the assessee could not be held to be justified. Hence, we delete the impugned additions and allow these grounds of appeal. Deduction of education cess and higher and secondary education cess - HELD THAT:- We find that this issue is squarely covered by the decision of Hon’ble jurisdictional High Court in case of Sesa Goa Ltd vs JCIT [2020 (3) TMI 347 - BOMBAY HIGH COURT] wherein, the Hon’ble Court has held that amount paid towards education cess and higher and secondary education cess on income-tax is an allowable deduction. The same view has been expressed by the co-ordinate bench in case of M/s Baroda Industries Pvt Ltd [2020 (11) TMI 943 - ITAT MUMBAI].Respectfully following the aforesaid decisions, we allow assessee’s claim. These grounds are allowed. Depreciation on certain expenditure - HELD THAT:- Admittedly, the assessee is contesting the issue before the Tribunal in assessment year 2008-09 and as submitted, the appeal has been heard. Therefore, assessee’s claim of depreciation would depend on the outcome of the decision of the Tribunal regarding assessee’s claim of revenue expenditure in assessment year 2008-09. In case, assessee’s claim is accepted in assessment year 2008-09, this ground would become infructuous. Otherwise, if the Tribunal agrees with the departmental authorities that the expenditure is capital in nature, the assessee would be entitled to claim depreciation. Accordingly, this ground is restored back to the assessing officer for deciding afresh keeping in view the order of the Tribunal for assessment year 2008-09. This ground is allowed for statistical purposes. Short grant of TDS - HELD THAT:- We direct the assessing officer to verify form 26AS and other materials on record and allow credit for TDS as may be admissible and in accordance with law. This ground is allowed for statistical purpose. Non grant of foreign tax credit - HELD THAT:- It is the contention of the assessee that the entire income earned by the assessee, whether in India or from contracts executed in foreign countries have been offered to tax in India and the assessee has shown positive income. Hence, credit for tax paid in foreign countries should be given. Undisputedly, the aforesaid issue was not a subject matter of dispute before learned DRP. This issue has been raised for the first time before us. All relevant facts relating to assessee’s claim have to be examined, as, they were never examined at any stage. Therefore, we restore the issue to the assessing officer for examining assessee’s claim and deciding it in accordance with law. We make it clear, we have not expressed any opinion on the merits of assessee’s claim which the assessing officer has to decide keeping in view the allowability of assessee’s claim vis-à-vis the legal position. Of course, the assessing officer has to provide a reasonable opportunity of being heard to the assessee before deciding the issue. Levy of interest under section 234A - HELD THAT:- It is the claim of the assessee that the return of income having been filed within the time limit prescribed under section 139(1) of the Act, no interest under section 234A can be charged. Keeping in view the aforesaid submission of the learned Counsel, we direct the assessing officer to verify the date of filing of return and in case it is found that the return of income was filed within the due date as per section 139(1) of the Act, no interest under section 234A can be charged.
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