9911796707
TMI Blog2020 (2) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of development of Port and related infrastructure. A concession agreement was executed between Maharashtra Maritime Board (MMB), a Statutory Body and Balaji Infra Projects Ltd. (BIPL) on 17th March 2002, for development, design, engineering, financing, procurement, construction, operation and maintenance of multipurpose, common-user Port at Dighi on Build, Own, Operate, Share and Transfer (BOOST) basis in terms of the concession agreement. Accordingly, BIPL has incorporated Dighi Port Ltd. (DPL) as the Special Purpose Vehicle (SPV) to develop and implement the project and the concession agreement has been novated in favour of DPL. In terms of the concession agreement, the assessee had started constructing the Dighi Port Projec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the Profit & Loss Account. Learned PCIT observed, the lease premium received by the assessee is a receipt for parting its future revenue with the lessee, hence, is to be treated as revenue receipt in the hands of the assessee. He observed, while completing the assessment under section 143(3) of the Act, the Assessing Officer has not examined/verified the taxability of the lease premium and has omitted to bring it to tax at the hands of the assessee. Thus, he was of the view that due to non-consideration of the aforesaid issue, the assessment order is erroneous and prejudicial to the interests of Revenue. Accordingly, he issued a show cause notice to the assessee requiring it to explain as to why the assessment order should not be revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Assessing Officer in the course of assessment proceedings, a copy of which is at Page-5 of the paper book. The learned Authorised Representative submitted, since after due enquiry and application of mind, the Assessing Officer accepted the nature of receipt as capital, the assessment order passed cannot be treated as erroneous and prejudicial to the interests of Revenue merely because learned PCIT is of the opinion that the receipt is of revenue nature. Further, learned Authorised Representative submitted, the amount received by the assessee is in the nature of advance, hence, cannot be treated as income. To support such contention, learned Authorised Representative drew our attention to the order dated 15th March 2019, passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dity of exercise of power under section 263 of the Act. 5. We have considered rival submissions and perused the material on record. On a careful reading of the impugned order passed under section 263 of the Act, it becomes amply clear that learned PCIT held the assessment order to be erroneous and prejudicial to the interests of Revenue primarily for the reason that the Assessing Officer has not made absolutely any enquiry with regard to the lease premium received from IMICL Dighi Maritime Ltd., which is a wholly owned subsidiary of IMICL. Of course, learned PCIT has also concluded that the lease premium received by the assessee amounting to Rs. 93.02 crore is in the nature of revenue receipt, hence, taxable. 6. As regards the first issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s very much general in nature without revealing too much regarding the nature of receipt. Even, it is not clear whether the concession agreement and sub-concession agreement and other relevant documents were either produced before the Assessing Officer or the Assessing Officer examined them. In fact, on a query from the Bench, the learned Authorised Representative fairly submitted that he does not have the necessary information in this regard. Thus, from the aforesaid facts, it is very much clear that in the course of assessment proceedings, there is complete failure on the part of the Assessing Officer in examining the nature and character of the lease premium received by the assessee from IMICL Dighi Maritime Ltd. and its taxability or o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and directing the Assessing Officer to make the addition. Therefore, the aforesaid direction of learned PCIT needs to be modified. In fact, in course of hearing, both, the learned Authorised Representative and the learned Departmental Representative have submitted that the nature and character of the receipt has to be examined by the Assessing Officer without any fetters being put by the higher authorities. In view of the aforesaid, while partly modifying the order of learned PCIT, we direct the Assessing Officer to examine the nature and character of the lease premium received of Rs. 93.02 crore and its taxability at the hands of the assessee in the impugned assessment year. While deciding the issue, the Assessing Officer must allow full ..... X X X X Extracts X X X X X X X X Extracts X X X X
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