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TMI Blog2012 (10) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... he total income of the assessee is to be computed on the basis of section 44BBB of the IT Act. 2.2 The learned CIT(A) has erred in ignoring the findings of the assessing officer as to why the provision of section 44BBB is not applicable for the assessee since it was mentioned clearly in the assessment order that a correspondence between the Central Electricity Authority and the TNEB stating that the . project may be treated at par with the power projects approved by the Government of India cannot be construed to be the requisite approval by the Central Government for the purpose of section 44BBB. 2.3 The learned CIT(A) has erred in not appreciating that the relaxation of the condition of international financing cannot be taken to be applicable for contracts signed prior to the date of amendment of the statute. 2.4 The learned CIT(A) has also erred in holding that a portion of the consideration cannot be taxed as fees for Technical Services on the ground that the consideration is for mining or like project. It is submitted that mandate of the company was different from that of a company carrying out only assembly or construction work. 2.5 It is subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Act, 1961 (in short 'the Act'). Accordingly, they considered 10% of gross erection income as their total income and thereafter set off the brought forward losses thereby reducing the effective income to NIL. As per the assessees, Section 44BBB of the Act was applicable to them, since the contract was a Central Government approved one and satisfied the conditions specified in Section 44BBB of the Act. However, A.O. was not impressed. According to him, when the contract was entered on 30.7.2001, there was no financing under any international aid programme, nor was the turnkey project approved by Central Government. Though the expression "financed under international aid programme" was omitted by Finance Act, 2003 with effect from 1.4.2004, the A.O. was of the opinion that the contract having been signed on 30.7.2001, the omission by Finance Act, 2003 of the said terms did not obviate the necessity to comply with such conditions. Further, as per the A.O., the approval letter placed by the assessees did not satisfy the conditions spelt out under Section 44BBB of the Act. As per the A.O., the approval letter simply mentioned that the project had to be treated at par with power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued that all the conditions laid down under Section 44BBB were satisfied and the A.O. had erroneously concluded that omission of the words 'financed under international aid programme' had to be reckoned as of the date of entering into agreement. As per the assessees, the omission was with effect from 1.4.2004, and had to be prospectively applied. Therefore, the question to be considered, as per the assessees, was whether in the impugned assessment year, the section had to be applied with or without such words. On a reasonable interpretation, it was argued, the condition regarding financing by an international aid programme could not be fastened on the assessees for impugned assessment year. Insofar as the consideration of technical services on which Section 44D was applied, argument of the assessees was that these were not stand alone technical services but a part and parcel of erection and commissioning work. As per the assessees, Section 9(i)(vii) of the Act covered only stand alone technical services and not services which were part and parcel of turnkey power projects. Ld. CIT(Appeals) was appreciative of these contentions. According to him, the turnkey power project was approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd prefer to be governed under the presumptive tax just because it was convenient for them. As per learned D.R., ld. CIT(Appeals) fell in gross error in entertaining the revised computation. In any case, according to him, Section 44D had an overriding effect over Section 44BBB of the Act and further adjustment as mentioned in Section 44D of the Act could be made, whether or not profit was estimated on presumptive basis. 7. As already mentioned by us, nobody appeared on behalf of assessees. 8. We have perused the orders and heard the submissions of learned D.R. We find from the assessment orders and other records that both the assessees are part of consortium. Learned D.R. has also placed on record the agreement entered by both the assessees as a consortium with TNEB on 30th July, 2001. The relevant part of said agreement is reproduced as under:- "This agreement made this day of 30th July, 2001 (two thousand and one) between Tamil Nadu Electricity Board (TNEB) registered in India, under the Companies Act 1956, having its registered office at 144, Anna Salai, Chennai - 600 002, India (herein after referred to as "Purchaser" or "TNEB" which expression shall include its administrato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons used in this agreement shall have the same meaning as are assigned to them in the "Contract Documents" referred to in the succeeding article." 9. It is clear from the above that the contract was allotted to a consortium consisting of two parties, namely, M/s Litostroj E.I. and M/s Koncar Inzenjering. In such a situation, first question to be answered, in our opinion, is whether the assessment has to be done considering the consortium as an Association of Persons or separately for each party. If we look at the consideration agreed which is given in clause 3.9 of the agreement, it runs as under:- "The lump sum price for entire scope of supply, erection, including insurance, testing and commissioning, excluding civil work on turn key basis shall be the sum of DEM 2,93,26,748 + Rs. 20,24,70,858 (DEM two crores ninety three lacs twenty six thousand seven hundred and forty eight and Rupees twenty crores twenty four lacs seventy thousand eight hundred and fifty eight only) (F.O.R. site including all taxes and duties) and the said price shall remain firm for the entire contract period. The following are the Break-up prices allotted to the consortium members (excluding Customs duty, E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal High Court in the case of CIT v. Shriram Investments (TCA 344 of 2005 dated 16.6.2012) relying on the decision of Hon'ble Apex Court in the case of Goetze (India) Ltd. v. CIT has clearly held that for making a claim other than what was originally made in return of income, filing of a revised return is mandatory. Neither the A.O. nor the CIT(Appeals) have considered these fundamental aspects regarding status and validity of a claim made other than through revised return. Further, assessees had also not placed before A.O. various details regarding erection charges received and break-up of the work done by them to M/s TNEB for verifying whether their billings included any fee for technic service. We are, therefore, of the opinion that the matter requires a re-visit by the A.O. for considering the issues de novo. We, therefore, set aside the orders of authorities below and remit it back to the file of the A.O. for consideration afresh in accordance with law. 10. Appeals of the Revenue in I.T.A. No.1429/Mds/2010 and I.T.A. No. 1241/Mds/2010 are allowed for statistical purposes. 11. Insofar as appeals of the assessees are concerned, since the assessees had not entered appearance, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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