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TMI Blog2019 (4) TMI 1675X X X X Extracts X X X X X X X X Extracts X X X X ..... enue has urged the following questions of law for our consideration. (A) Whether in law and circumstances of the case the ITAT has erred in deleting the action of the Assessing Officer of disallowing the expenses of 6,96,00,000/- Rs. in respect of payment of liquidated damages made for cancellation of contract during F.Y. 2009-10 ? (B) Whether in law and circumstances of the case the ITAT was unjustified in allowing the claim made by the appellant at the time of hearing of appeal in respect of allowance of liquidated damages of Rs.6,96,00,000/- paid for the cancellation of contract accrued the said sum during the F.Y. 2009-10 ? (C) Whether in law and circumstances of the case the ITAT has erred in allowing the expenditure of Rs.6,96,00,000/- (pertaining to the liquidated damages) accrued in the earlier year that is Assessment year 2010-11 and therefore the same cannot be allowed for the year under consideration ? (D) Whether in law and circumstances of the case the ITAT erred in deleting the action of the Assessing Officer of disallowing the deferred revenue expenditure of 50,82,117/- claimed by the Rs. respondent in return of income filed for the year, when it was e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n so far as payment of Rs. 2,32,13,982 made on 5th March, 2010 by the Assessee to the said M/s. Timblo Minerals Pvt. Ltd. is concerned, the Assessee had deposited the tax deducted at source amounting to Rs. 4,64,280/- on 29th May, 2010. In respect of the second installment of Rs. 2,32,17,000/- paid on 15th April, 2010, the Assessee had deducted the tax at source at Rs. 6,64,340/- and deposited with the Department on 18th September, 2010. In respect of payment of Rs. 2,31,69,018/- paid on 20th May, 2010, the Assessee had deducted tax at source amounting to Rs. 4,63,280/- and deposited the said amount with the Department on 5th September, 2011. (D) In so far as Assessment Year 2011-12 is concerned, Mr. Rajesh Prakash Timblo filed his return of income on 29.9.2011, declaring total income of Rs. 81,20,660/-. The Assessing Officer, vide order dated 27th March, 2014, made various additions amounting to Rs. 29,67,871/-. The Assessee was aggrieved by the disallowance of deferred expenditure amounting to Rs. 50,82,117/-. The Assessee filed an appeal before the Commissioner of Income Tax (Appeals) Panaji-1. By an order dated 20th June, 2017, the learned CIT (A)) upheld the order made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajesh Timblo filed a return of income on 3rd September, 2011 declaring total income of Rs. 82,27,250/-. By an order dated 10th March, 2016, the Assessing Officer made various additions amounting to Rs. 29,67,871/-. The said Assessee was aggrieved by the disallowance of deferred expenditure amounting to Rs. 50,82,117/-. The CIT(A), by an order dated 27th June, 2017, dismissed the appeal filed by the Assessee. The Tribunal by an order dated 5th September, 2017, allowed the Appeal of the said Assessee i.e. No.217/PAN/2017 filed by the said Assessee on the issue of deferred revenue expenditure relating to payment of liquidated damages amounting to Rs. 6,96,00,000/- and deduction amounting to Rs. 9,87,993/- being 1/17 of Rs. 1,67,95,982/-. (I) In so far as the Assessment Year 2012-13 is concerned, the said Assessee Smt. Vidya Rajesh Timblo filed a return of income on 16th October 2013, declaring total income of Rs. 1,47,12,570/-. By an order dated 13th March, 2015, the Assessing Officer made various additions amounting to Rs. 34,90,325/-. The said Assessee was aggrieved by the disallowance of deferred expenditure amounting to Rs. 50,82,117/-. The CIT(A), by an order dated 7th June, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid sum of Rs. 6,96,00,000/- was paid by the Assessees in three installments in the month of March, April and May, 2010 respectively. The final installment was paid on 20th May, 2010, which fell in the Assessment Year 2011-12. 9. It is submitted by the learned Counsel that the said contract entered into between the Assessees and the said M/s. Timblo Minerals Pvt. Ltd., was a contingent contract and came to an end only upon the Assessees complying with the condition of making payment of the last installment to the said M/s. Timblo Minerals Pvt. Ltd. which, admittedly, fell within the period of the Assessment Year 2011-12. 10. It is submitted by the learned Counsel that the Tribunal has interpreted the Clauses 1, 4, 5 and 6 of the Agreement entered by the Assessees with the said M/s. Timblo Minerals Pvt. Ltd. and has rightly held that the agreement came to be terminated only upon payment of last installment of the liquidated damages by the Assessees in favour of M/s. Timblo Minerals Pvt. Ltd. which fell in the period of Assessment Year 2011-12. It is submitted that the findings of fact rendered by the Tribunal being not perverse, cannot be interfered with by this Court in this Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7] 79 taxmann.com 394 (Bombay) which has followed the Judgment of this Court in the case of Commissioner of Income-tax vs. Nagri Mills Co. Ltd. (supra). It is submitted that the tax rates in both the assessment years were uniform. The issue raised by the Revenue in these four appeals that the Assessees could not have claimed deductions in the Assessment Year 2011-12 and ought to have claimed deduction in the Assessment Years 2010-11 is academic and does not raise any substantial question of law. He submits that none of the questions raised by the Revenue arise any substantial question of law. 15. A perusal of the order passed by the Assessing Officer indicates that according to him, the liability to pay Rs. 6.96 crores had been incurred in the Assessment Year 2010-11 since the agreement under which the said amount was agreed to be paid was entered into on 5th March, 2010. He accordingly disallowed the claim of the Assessee amounting to Rs. 6.96 crores for the Assessment Year 2011- 12, which order came to be confirmed by the CIT(A). The Tribunal, however, rightly interpreted various clauses of the agreement entered into between the Assessee and the said M/s. Timblo Minerals Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction in respect of the expenditure claimed in that matter was granted in the Assessment Year 1952-53 or in the assessment year corresponding to the accounting year 1952, the Department would not fritter away its energies in fighting matters of this kind. It is held that however judging from the references that come up before the Court every now and then, the Department appears to delight in raising points of character which do not affect the taxability of the assessee or the tax that the Department is likely to collect from him, whether in one year or the other. 19. This Judgment in the case of Commissioner of Income-tax vs. Nagri Mills Co. Ltd. (supra) has been followed by this Court in the case of Commissioner of Income-tax-15 vs. Aditya Builders (supra); Delhi High Court in the case of Commissioner of Income-tax vs. Triveni Engg. & Industries Ltd (supra) and the Gujarat High Court in the case of Commissioner of Income-tax vs. Gujarat State Forest Department, [2007] 163 Taxman 547 (Guj.). In our view, the Judgments of this Court in the case of Commissioner of Income-tax vs. Nagri Mills Co. Ltd. (supra) and in the case of Commissioner of Income-tax-15 vs. Aditya Builders (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the expenditure claimed by the Assessee was the revenue expenditure. The Assessee had claimed deduction at the rate of 1/17th of the said expenditure while filing the return of income in the impugned assessment year. But during the course of assessment proceedings, the Assessee made a claim for full sum of Rs. 6.96 crores. There was no dispute about the genuineness as well as the nature of expenditure. It was urged by the Assessees before the Tribunal that in view of first proviso to Section 40(a)(ia) of the Act, since the Assessees had deducted the tax on the payment of Rs. 2.32 crores, and Rs. 2.31 crores, in the Assessment Year 2011-12 and 2012-13, the Assessees be allowed deduction in respect of said sum in those years. 23. The Tribunal considered this submission in great detail in paragraph 8 of the impugned order and, after considering the fact that the amounts of TDS in the sum of Rs. 4,64,280/-, Rs. 4,64,340/- and Rs. 4,64,380/- which were deducted from the amounts paid under those three installments and were deposited on 29th May, 2010, 18th August, 2010 and 5th September 2011 respectively, the Tribunal held that the deductions for the second and third installment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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