TaxTMI 
TaxTMI 
2017 (11) TMI 1745
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....and in totality of circumstances, the work by EPC contractors having been executed by 31.3.2005, bills for the works having been received on 3.3.05, the work so executed have being put to use and income earned therefrom, the quantum claim by the EPC contractors being highly excessive, and unreasonable finally settled on 12.9.06 and paid accordingly, the system of accounting being mercantile, the learned Tribunal grossly erred in holding the amount of Rs. 57,07,62,552/- as a 'provision and a contingent liability', which accrued by 31.3.2005 and should have been considered for capitalization on 1.4.2005. 2) Whether on the facts and in totality of circumstances and the appellant having suffered loss, the ld. Tribunal was right in law in holding that there is liability to charge of interest u/s 234B and 234C of the Act. 3) Whether on the facts and in totality of circumstances cheque for Rs. 14 lacs having been given to the (**) Foundation on 31.3.2006 having been cleared and collected by the Foundation after 1.4.06, receipt having been issued on 31.3.2006, the appellant was not entitled to deduction u/s 80G of the Act though debited to Profit and loss account and shown under the he....
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..... The consortium participated in the bid invited by the National Highway Authority of India (NHAI) working under the Ministry of Surface Transport. The bid involved the strengthening of the existing two lane road on Jaipur Kishangarh section of National Highway No. 8 in the State of Rajasthan. The bid also involved the creation of additional Four lanes thus bringing the Highway to Six lanes. The other requirements of the bid was to construct, operate and maintain the six lanes highway. The consortium having offered the bid was successful and was awarded the job promote and incorporate a limited liability company in the form of 'Special Purpose Vehicle (SPV) for executing the concession agreement. It was incorporated in April, 2002 for the specific purpose of this work. It was converted into a limited company on 3.11.2004. The concession agreement was entered into with National Highway Authority of India on 8.5.2002. The agreement conferred certain rights to the appellant company, which include levy, demand, collect and appropriate the fees (known as Toll charges) from vehicles and persons liable to payment of fees for using the project highway. The appellant company completed the s....
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....,03,012/- through complete details and proof was on assessment record. He charged interest u/s. 234B of Rs. 5,49,25,727/- + Rs. 15,58,080/- u/s. 234C. On application u/s. 154 dated 05.01.2009 the demand was belatedly rectified on 22.01.2009. Copy of the assessment order dated 29.12.2008. That the respondent though originally granted 30 days statutory period for payment of the highly disputed paper demand but surprisingly illegally reduced the period to 3 days on 7.1.2009 without any valid reason. He also summarily and perfunctorily rejected stay petition filed u/s. 220(6) of the Act on 9.1.2009. Notice of Demand for Justice was given on 12.1.2009. It was registered as S. B. Civil Petition No. 311 of 2009. The Hon'ble Court was pleased to stay the demand. However, the respondent illegally collected Rs. 1,72,60,105.03 from Axis Bank u/s. 226(3) without prior service of the said notice on the appellant. The appellant had to deposit Rs. 5 Crores on 5.3.2009 in order to get Order u/s. 226(3) withdrawn on 6.3.2009. Stay was granted, on intervention of the Chief Commissioner, till disposal of appeal by the Income Tax Appellate Tribunal or 30.06.2009, whichever is earlier. 4. Counsel for ....
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....ath Jute Manufacturing Co. Ltd. (supra). There the Assessee followed the mercantile system of accounting. The relevant AY was 1955-56. The Assessee had in the calendar year 1954, i.e., the relevant previous year, incurred a liability of Rs. 1,49,776/- on account of sales tax determined as payable by the Sales Tax Authorities on the sales made by it. The sales tax demand had already been raised. The Assessee had contested the sales tax liability by filing an appeal. It had also not made any provision in its books as regards payment of the said amount. On these two grounds, the AO rejected the Assessee's claim for deduction. Holding for the Assessee, the Supreme Court held that although the sales tax liability could not be enforced till the quantification was effected in the assessment proceedings, since the Assessee had followed the mercantile system of accounting it was entitled to deduct from the profits and gains of the business such liability which had accrued during the period for which the profits and gains were being computed. It was held that the liability did not cease to be a liability only because the Assessee had challenged it in the higher forum. Also the fact that ....
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....er the mercantile system of accounting the amount could be debited before it was actually disbursed. The difficulty in the estimation thereof again would not convert an accrued liability into a conditional one, because it is always open to the Income-tax authorities concerned to arrive at a proper estimate thereof having regard to all the circumstances of the case." 42. The Supreme Court Calcutta Co. Ltd. v. Commissioner of Income Tax, West Bengal (supra) also explained that since the Assessee was being assessed in respect of the profits and gains of its business, the same could not be determined "unless and until the expenses of the obligations which have been incurred are set off against the receipts." It was observed as under: "The expression profits and gains has to be understood in its commercial sense and there can be no computation of such profits and gains until the expenditure which is necessary for the purpose of earning the receipts is deducted therefrom-whether the expenditure is actually incurred or the liability in respect thereof has accrued even though it may have to be discharged at some future date. As was observed by Lord Herschell in Bussel v. Town and Cou....
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....in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in present though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain." 44. The Supreme Court referred to an earlier decision in Metal Box Company of India Ltd. v. Their Workmen MANU/SC/0120/1968 : (1969) 73 ITR 53 (SC) in which inter alia it was explained as under: "(i) For an assessee maintaining his accounts on mercantile system, a liability already accrued, though to be discharged at a future date, would be a proper deduction while working out the profits and gains of his business, regard being had to the accepted principles of commercial practice and accountancy. It is not as if such deduction is permissible only in case of amounts actually expended or paid; (ii)....
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....sessee follows the mercantile system of accounting it is not necessary that the liability must have actually been incurred during the AY in question to enable the Assessee to claim it as an expense or deduction as the case may be. The crux of the matter is the reasonable certainty with which the liability can be ascertained." 6.1. He has also relied upon the decision of Delhi High Court in case of Commissioner of Income Tax vs. Ansal Land Mark Township P. Ltd. reported in [2015] 377 ITR 635 (Delhi) wherein it has been held as under:- "9. It is seen that the second proviso to Section 40(a)(ia) was inserted by the Finance Act 2012 with effect from 1st April 2013. The effect of the said proviso is to introduce a legal fiction where an Assessee fails to deduct tax in accordance with the provisions of Chapter XVII B. Where such Assessee is deemed not to be an assessee in default in terms of the first proviso to sub-Section (1) of Section 201 of the Act, then, in such event, "it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso". 11. The first proviso to Sect....
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....s Court in its order dated 29 November, 1979. In Commissioner of Income Tax, Bombay South, Bombay v. Messrs Ogale Glass Works Ltd. Ogale Wadi MANU/SC/0087/1954 : [1954]25ITR259(SC) it was laid down by this Court that payment by cheque realised subsequently on the cheque being honoured and encashed relates back to the date of the receipt of the cheque, and in law the date of payment is the date of delivery of the cheque. Payment by cheque is an ordinary incident of present-day life, whether commercial or private, and unless it is specifically mentioned that payment must be in cash there is no reason why payment by cheque should not be taken to be due payment if the cheque is subsequently encashed in the ordinary course. There is nothing in the order of this Court providing that the deposit by the appellant was to be in cash. The terms of the order dated 29 November, 1979 are conclusive in this respect and it is the intent of that order which will determine whether payment by cheque within the period stipulated in that order was excluded as a mode in satisfaction of the terms of Hint order. The time for payment is governed by the order of this Court." 6.3. He has relied upon the dec....
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....itution Bench of the Supreme Court in Amalgamated Coalfields Ltd. v. Janapada Sabha MANU/SC/0105/1961 : [1962]1SCR1 , held thus (page 965) : "It may be stated at the outset that the tax now impugned has been imposed by the local authority from March 12, 1935, and that the first occasion when its validity was attacked was in only 1957, though if the petitioners are right in their submissions their acquiescence might not itself be a ground for denying them relief. Before however we set out the points urged by the learned Attorney- General in support of the petition, it would be convenient if we narrate briefly the history of the levy of this tax." 15. The Supreme Court, thus, held that acquiescence to an illegal tax for a long time is not a ground for denying the party the relief that he is entitled to. In the instant case, therefore, it may be held that merely because the petitioner offered the prize money won in the lottery of the Sikkim Government, to tax under the Income Tax Act, 1961, that shall not take away her right in contending that the said prize money was not chargeable and assessable to tax under the Income Tax Act in the revisional jurisdiction. The said prize money w....
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....ntitled but which they have omitted to claim for some reason or other (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs." This is Circular No. 14 (XI-35) of 1955 and is dated April 11, 1955. In view of this circular it is clear that for the purpose of the circular, what should be the guiding factor is whether the proceedings or other particulars before the ITO at the stage of original assessment disclosed any grounds for relief under s. 2(5)(a)(iii) of the Finance Act of 1964 or of the Finance Act of 1965, even though no claim was made for that relief by the assessee at the stage of those proceedings before him. IT is possible to argue that, to the extent to which the circular of 1955 speaks of proceedings or other particulars before the ITO as distinguished from the return and the assessment order which were spoken of by the Supreme Court in Rai Bahadur Hardutroy's case MANU/SC/0128/1967 : [1967]66ITR443(SC) , there is a deviation from the correct legal position. But it is now well-settled after the decision of the Supreme Court in Ellerman's case MANU/SC/0345/1971 : [197....
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....sessment under Section 264(1) of the Act. If the Commissioner refuses to give relief to the assessee, in such circumstances, he would be acting dehors the powers under the Act and the provisions of the Act and therefore, is duty bound to give relief to an assessee, where due, in accordance with the provisions of the Act. A word of caution. The authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is over-assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. This Court, in an unreported decision in case of Vinay Chandulal Satia v. Shri N.O.Parekh., the Commissioner of Income Tax, Special Civil Application No. 622/1981, rendered on 20-8-1981, has laid down the approach that the authorities must adopt in such matters in the following terms : "The Supreme Court has observed in numerous decisions, including Ramlal and Ors. v. Rewa Coalfields Ltd., MANU/SC/0042/1961 : [1962]2SCR762 The State of West Bengal v. The Administrator, Howrah Municipality and Or....
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.... do not find any unreasonableness or irrationality in the approach of the petitioner to engage the advocate of his choice and naturally, the advocate on his part is within his rights to charge his fee in the matter. So, this amount of Rs. 11,000 paid by the petitioner to his advocate to render his professional services in this matter to him is a reasonable amount and it has to be awarded to the petitioner. So far as the litigation expenses are concerned, the amount of Rs. 2,000 is also reasonable and for which the petitioner is entitled. Respondent No. 2 is the concerned person who is a creator of this litigation. He has realised his mistake and ultimately the impugned notice has been withdrawn. Respondent No. 2 is the person concerned who is to be directed by this court to pay the costs to the petitioner." 6.7. He has also relied upon the following decisions of the Supreme Court wherein it has been held as under:- 1. Sutlej Cotton Mills Limited vs. Commissioner of Income Tax, Calcutta (27.09.1978 - SC), (1979) 116-ITR-01 (SC) 10. The law may, therefore, now be taken to be well settled that where profit or loss arises to an assessee on account of appreciation or depreciation i....
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....ditional evidence and in the light of the law laid down by us in this judgment determine whether the loss suffered by the assessee on remittance of the two sums of Rs. 25 lakhs and Rs. 12,50,000/- was a trading loss or a capital loss. 2. Challapalli Sugar Ltd. vs. The Commissioner of Income Tax, A.P., Hyderabad (31.10.1974 - SC), (1975) 98-ITR-167 (SC) 28. There is, in our opinion, force in the submission of Mr. Palkhivala. As stated above, arguments were heard together on February 1, 1972 in civil appeals Nos. 1784, 1694, 1730 and 1831 on the question as to whether the wealth-tax paid by the assessee was a permissible deduction under Section 10(2)(xv) of the Indian Income-tax Act. On the conclusion of the arguments on that point, this Court found that an additional question arose in civil appeal No. 1784 on the point as to whether the interest payable on loan was part of the actual cost of the assets. The Constitution Bench after hearing arguments on this additional point for some time directed that civil appeal No. 1784 along with the connected civil appeal 1785 should be posted for hearing before a Division Bench after pronouncement of judgments in civil appeals Nos. 1694, 1....
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....the business receipts, if it was to be allowed, must be brought under one or the other of the deductions mentioned in s. 10(2) and that there was no scope for any preliminary deduction under general principles. It was, however, held by this Court in Badridas Daga v. The Commissioner of Income-tax [1958]34ITR10(SC) "It is to be noted that while s. 10(1) imposes a charge on the profits or gains of a trade, it does not provide how those profits are to be computed. Section 10(2) enumerates various items which are admissible as deductions, but it is well settled that they are not exhaustive of all allowances which could be made in ascertaining profits taxable under s. 10(1)." 4. Metal Box Company of India Ltd. vs. Their Workmen (20.08.1968 - SC), (1969) 73-ITR-53 26. There remains now the question regarding computation of direct taxes. Section 6(c) of the Act provides : "subject to the provisions of section 7, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year..." 27. Section 7, inter alia, provides : "For the purpose of clause (c) of section 6, any direct tax payable by the employer for any....
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....against the possibility of such prolonged enquiries. 36. The key to the words in section 6(c), namely, "is liable to pay" emphasised on behalf of the unions and some of the interveners lies in the opening words "subject to the provisions of section 7" in clause (c). These words are used, whether the tax liability is to be calculated on actual taxable income or on the notional amount worked out under sections 4 and 6 and Schedule II, because the direct taxes payable by the employer are to be calculated at the rates applicable during that year as provided by section 7. That both such amounts cannot be the same is clear because section 7 in express terms prohibits taking into account unabsorbed losses and arrears of depreciation allowable under section 32(2), the exemption allowed under section 84 and the deduction allowed under section 101(1) of the Income-tax Act. Similarly, where an assessee is a religious or charitable institution and its income either wholly or partly, as the case may be, is exempt under the Income-tax Act, such an employer to whom section 32 of the Act does not apply is treated as a company in which the public are substantially interested and its income is to ....
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....during that year to the income, gains and profits of the employer and after deducting the amount of taxes so worked out arrive at the available surplus. Section 6(c) being subject to section 7 the computation has to be done without taking into account the items specified in section 7(a) and in the manner prescribed by the remaining clauses of that section. This interpretation is commendable because: (1) it is consistent with the words " is liable to pay " in section 6(c)(2) it is in harmony with the provisions of sections 4 and 6 and Schedule II, and (3) it is consistent with the intention of Parliament apparent from the scheme of computation of available surplus in the Act. The Act recognises the principle laid down in the Full Bench Formula that both labour and capital are entitled to a share in the profits. That is why 40 per cent of the available surplus is left to the capital and interest is. allowed to the employer on paid up and working capitals while working out the gross profits. Parliament besides was or at any rate is presumed to have been aware that depreciation allowed under the Income-tax Act would not be sufficient for rehabilitation purposes.. It did away with reh....
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.... Metal Box Company of India Ltd. v. Their Workmen (1969)ILLJ785SC the appellant company estimated its liability under two gratuity schemes framed by the company and the amount of liability was deducted from the gross receipts in the P&L account. The company had worked out on an actuarial valuation its estimated liability and made provision for such liability not all at once but spread over a number of years. The practice followed by the company was that every year the company worked out the additional liability incurred by it on the employees putting in every additional year of service. The gratuity was payable on the termination of an employee's service either due to retirement, death or termination of service - the exact time of occurrence of the latter two events being not determinable with exactitude before hand. A few principles were laid down by this Court, the relevant of which for our purpose are extracted and reproduced as under : (i) For an assessee maintaining his accounts on mercantile system, a liability already accrued, though to be discharged at a future date, would be a proper deduction while working out the profits and gains of his business, regard being had ....
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....tion, this Court said that the undertaking given by the assessee imported a liability on the assessee which accrued on the dates of the deeds of sale though that liability was to be discharged at a future date. It was thus an accrued liability and the estimated expenditure which would be incurred in discharging the same could be deducted from the profits and gains of business. The difficulty in the estimation of liability did not convert the accrued liability into a conditional one. This Court said that the expression 'profits or gains' in Section 10(1) of the Income-tax Act, 1922 had to be understood in its commercial sense; and there could be no computation of such profits and gains until the expenditure which is necessary for the purpose of earning the receipt is deducted therefrom, whether the expenditure is actually incurred or the liability in respect thereof has accrued even though it may have to be discharged at some future date. 7. Thus "expenditure" is not necessarily confined to the money which has been actually paid out. It covers a liability which has accrued or which has been incurred although it may have to be discharged at a future date. However, a conting....
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....ve followed the same method of accounting, particularly in the context of chit discount. Every assessee is entitled to arrange its affairs and follow the method of accounting, which the Department has earlier accepted. It is only in those cases where the Department records a finding that the method adopted by the assessee results in distortion of profits, the Department can insist on substitution of the existing method. Further, in the present cases, we find from the various statements produced before us, that the entire exercise, arising out of change of method from completed contract method to deferred revenue expenditure, is revenue neutral. Therefore, we do not wish to interfere with the impugned judgment of the High Court. 18. Before concluding, we may point out that under Section 211(2) of the Companies Act, Accounting Standards ("AS") enacted by the Institute of Chartered Accountants have now been adopted [see: judgment of this Court in J.K. Industries case (supra)]. Shri Tripathi, learned Counsel for the Department, has placed reliance on AS 22 as the basis of his argument that the completed contract method should be substituted by deferred revenue expenditure (spreading ....
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....ion to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees shall be allowed only in computing the income of that previous year in which such sum is actually paid by him. On perusal of the said object it would appear that the legislature expressed concern about the unreasonable deduction claim on the basis of mercantile accounting method without discharging statutory liabilities. It was observed by the legislature that there had been a trend to evade statutory liabilities on the one hand and claim appropriate benefit under the said Act of 1961 on the other hand. Hence, such enactment was necessary. 10. The said section had undergone several changes from time to time and on each and every occasion the legislature came out with the objects and reasons disclosed therefor. In 1990 deduction on account of unpaid loan to any public financial institution or a State financial institution was roped in. By a further amendment in 1996 unpaid loan of scheduled bank was also incorporated. On each such occasion objects and reasons were disclosed. While inserting Clause (f) no special reasons were disclosed. His Lordship held that such disc....
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....see. The legislature to get rid of the decision of the apex Court brought out the amendment which would otherwise nullify the Judge made law. The apex Court decisions are Judge-made law and are applicable to all under the Constitution. We, not for a single moment, observe that legislature was not entitled to bring such amendment. They were within their power to bring such amendment. However, they must disclose reason which would be consistent with the provisions of the Constitution and the laws of the land and not for the sole object of nullifying the apex Court decision. 11. In this regard the observation of the apex Court in the case of Bharat Earth Movers (supra) is quoted below: The law is settled: if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in praesenti though it wi....
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....the option of the owner of the capital asset. 26. The expenditure incurred for the purchase of the machinery was undoubtedly capital expenditure, for it brought in an asset of enduring advantage. But the guarantee commission stands on a different footing. By itself, it does not bring into existence any asset of an enduring nature ; nor did it bring in any other advantage of an enduring benefit. The acquisition of the machinery on instalment terms was only a business exigency. If interest paid on a credit purchase of machinery could be held to be revenue expenditure, we fail to see how guarantee commission paid to a bank for obtaining easy terms for acquisition of the machinery could be regarded as capital payments". It was held that both the payments are of revenue nature. 12. Commissioner of Income Tax vs. Rajasthan Spg. and Wvg. Mills Ltd. (RAJHC),2006, 281-ITR-408 4. The AO has not applied the test of expenses incurred wholly and exclusively correctly for the purpose of assessee's business by referring to the expenses incurred by the assessee and the benefit derived by the spender in exclusivity. The motivation which led the assessee to spend the amount on bus and ....
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....any provision of the Act. Consequently, the principle of law was correctly enunciated and application of law has been correctly made by the " Tribunal. 6. In our opinion, no substantial question of law arises in examining the issue again about the test of applicability of allowable expenses claimed by the assessee and the benefits derived from it so far as the present case is concerned. 13. Commissioner of Income Tax - IV vs. Hindustan Coca Cola Beverages Pvt. Ltd. (2011 - DELHC), 331-ITR-192 24. It is worth noting that the meaning of business or commercial rights of similar nature has to be understood in the backdrop of Section 32(1)(ii) of the Act. Commercial rights are such rights which are obtained for effectively carrying on the business and commerce, and commerce, as is understood, is a wider term which encompasses in its fold many a facet. Studied in this background, any right which is obtained for carrying on the business with effectiveness is likely to fall or come within the sweep of meaning of intangible asset. The dictionary clause clearly stipulates that business or commercial rights should be of similar nature as know-how, patents, copyrights, trademarks, licenc....
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....as contended that the liability got crystalized on 12.09.2006 and a payment schedule was made after the amount was finally determined to be payable as claimed to be capitalized. The assessee also contends that there is no statutory compulsion to record a capital expenditure in the books of accounts so as to make it entitle for claiming depreciation, as according to assessee the claim of depreciation is a natural consequence of an asset being put to use for business purposes which is not in dispute. The assessee also contends that the department is denying the allowance of depreciation on the asset which have been commercially exploited during the relevant period and the income earned in the shape of toll collection have been taxed thus the allowability of depreciation has strongly been claimed. 9.5.1. With the above background and after considering the totality of the facts and circumstances of the case we are of the considered opinion that the depreciation on this part of assets as claimed in this ground cannot be allowed to the assessee as the assessee has even failed to bring it on its financial records and the balance sheet which is the summary of entire financial working for....
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....disallowed the claim of the assessee. Thus the ground no. 11 of the appeal is rejected." Ground No. 13: 17. In this ground the assessee has agitated the disallowance made of Rs. 13,50,000/- u/s 40(a)(ia) for delayed payment of TDS. 17.1. We have considered the arguments advanced by the parties. We find that the assessee company has made the payment of Rs. 13,50,000/- towards the guarantee commission to Novopan Industries Ltd. and deducted the tax at source in the month of January 2006 for which the due date for depositing the TDS was 07.02.2006 and since the assessee company has deposited the same on 29.06.2006, in terms of the provision of Section 40(a)(ia) the assessee would be entitled for the deduction of the expenditure in the year when the amount of TDS was actually deposited thus considering these facts we are of the view that the AO has rightly disallowed the expenditure in the year under appeal however, the assessee is entitled for claiming that deduction of the expenses incurred in the year in which payment of TDS is actually made. Thus the ground of the appeal is rejected. Ground No. 14: 18. In this ground the assessee has agitated the disallowance made of Rs. ....
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.... ground is rejected. 7.1. He further contended that the expenses which was done by the previous company cannot be allowed since it was prohibited under Section 35B. However, certain expenses can be exempted under Section 35D. Section 35D for ready reference is reproduced as under:- "35D. (1) Where an assessee, being an Indian company or a person (other than a company) who is resident in India, incurs, after the 31st day of March, 1970, any expenditure specified in sub-section (2),- (i) before the commencement of his business, or (ii) after the commencement of his business, in connection with the extension of his 92[***] undertaking or in connection with his setting up a new 92[***] unit, the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of an amount equal to one-tenth of such expenditure for each of the ten successive previous years beginning with the previous year in which the business commences or, as the case may be, the previous year in which the extension of the 92[***] undertaking is completed or the new 92[***] unit commences production or operation : 93[Provided that where an assessee incurs after the 31s....
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....ose of computing the deduction allowable under sub-section (1) : 95[Provided that where the aggregate amount of expenditure referred to in sub-section (2) is incurred after the 31st day of March, 1998, the provisions of this sub-section shall have effect as if for the words "two and one-half per cent", the words "five per cent" had been substituted.] Explanation.-In this sub-section- (a) "cost of the project" means- (i) in a case referred to in clause (i) of sub-section (1), the actual cost of the fixed assets, being land, buildings, leaseholds, plant, machinery, furniture, fittings and railway sidings (including expenditure on development of land and buildings), which are shown in the books of the assessee as on the last day of the previous year in which the business of the assessee commences; (ii) in a case referred to in clause (ii) of sub-section (1), the actual cost of the fixed assets, being land, buildings, leaseholds, plant, machinery, furniture, fittings and railway sidings (including expenditure on development of land and buildings), which are shown in the books of the assessee as on the last day of the previous year in which the extension of the 96[***] under....
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....uch accountant and setting forth such particulars as may be prescribed. (5) Where the undertaking of an Indian company which is entitled to the deduction under sub-section (1) is transferred, before the expiry of the period of ten years specified in sub-section (1), to another Indian company in a scheme of amalgamation,- (i) no deduction shall be admissible under sub- section (1) in the case of the amalgamating company for the previous year in which the amalgamation takes place; and 8. Therefore, he contended that it was not permissible to the original company as has been indirectly done by the assessee, therefore, this is nothing but planning of the assessee where the original company was being a foreign company could not get deducted the preliminary expenses have been sought to be taken by the company which has been formed only after the agreement between the original company and the NHAI. 9. In that view of the matter, the view taken by the Tribunal is just and proper. No interference is called for. 10. He further contended that the audit report was submitted on 25th September, 2006 and so called compromise or the arbitration award between the parties ought to have been r....
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....tention to Clause-1. 14. He has also referred the concession agreement which was entered between the NHAI and the assessee and he has taken us to the different clauses which we have gone through but we are not reproducing the same for the sake of brevity. 15. Taking into consideration the volume of work which was required to be done by the assessee and the dispute regarding excess claim by the other contractor, the matter was referred to the arbitrator and the claim was made for enhancement which was accepted by the CIT(A). 16. In view of the provision where contingent liability was made in view of the revised return filed by the assessee, the Tribunal has seriously committed an error in rejecting the claim of the present assessee for Rs. 57,07,62,552/-. Thus, the issue no. 1 is answered in favour of assessee against the department. 17. On the issue no. 2 regarding 234B and 234C of the Act, in our considered opinion, the Tribunal has not committed an error. 17.2 In that view of the matter, the issue is answered in favour of the department against the assessee. 18. On the third issue, the payment was made on 31st March, 2006 and if the payment was taken to be made on 31st Marc....
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....required to be operated through bank therefore, the agony which has been made on 6th February, 2009 and narrated in issue no. 5 of the written submission which we have reproduced with a view to show agony which has been suffered and the conduct of the officer in spite of the High Court interference he has acted arbitrarily. In that view of the matter, the issues no. 7 & 8 are required to be viewed very seriously and the Tribunal ought to have granted cost under 254(2)(b). In that view of the matter, we are of the opinion that the issue is required to be answered in favour of the assessee against the department. Looking to the fact that the cost could have been awarded corresponding to the tax paid by the assessee which in turn comes in lacs of rupees but we do not want to put the department to heavy loss but at the same time, we want to put check on the officers not to act arbitrarily, therefore, we impose a cost of Rs. 11,000/-. 23. On the last issue regarding assessment order being annulled the issue is answered in favour of the assessee against the department. The assessment is not required to be cancelled on the behest of department as held in our earlier decision which has be....