TMI Blog2020 (9) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (India) Ltd [ 2018 (6) TMI 1525 - ITAT INDORE] wherein deleted the penalty levied u/s 271AAA. Defective notice - As notice clearly spells out that the provisions under which the notice was issued for levy of penalty u/s 271AAA but the charges mentioned therein refers to those provided in Section 271(1)(c) of the Act. Ld. A.O failed to mention the charges provided u/s 271AAA of the Act. We find that this issue is also squarely covered in favour of the assessee by the decision in the case of Gillco Developers Builders (P) Ltd [ 2017 (8) TMI 1468 - ITAT CHANDIGARH] wherein the Tribunal after observing that the notice issued is defective held in favour of the assessee and quashed the penalty proceedings As penalty proceedings carried out in the case of the assess were void ab-initio since the notice issued itself is defective and not in accordance with law. Thus we find no reason to interfere in the finding of Ld. CIT(A) deleting the penalty levied u/s 271AAA - Decided against revenue. Penalty u/s 271AAB(1)(a) - income offered by the assessee u/s 41(1) on account of writing off outstanding credit balance in the name of a creditor - HELD THAT:- Alleged outstanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed only because of search action and that the assessee did not specify and substantiate the manner of deriving such income during the search and disclosed in the return of income filed u/s 153A of the Income Tax Act, 1961. Kalyan Keti Toll Pvt. Ltd ITA No.928/Ind/2019 Assessment Year 2016-17 1.On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the penalty of ₹ 1,33,78,415/- levied by the Assessing Officer u/s 271AAB(1)(a) in respect of surrender made by the assessee u/s 132(4) of the Income Tax Act, 1961 and disclosed in the return of income filed after search seizure action which itself is the sufficient cause for levying of penalty in accordance with provisions of the Act.. 3. As both the appeals relates to different assessee(s) being part of same business group which were subjected to search u/s 132 of the Act, these appeals were heard together and are being disposed off by this common order for the sake of convenience and brevity. 4. We will first take up ITA No.928/Ind/2019 in the case of Kalyan Toll Infrastructure Ltd for adjudication. 5. Brief facts of the case as culled out from the records are that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating that the penalty proceedings be kept in abeyance as it has filed an appeal before the Ld. CIT(A) against the assessment order. It seems that taking cognizance of this reply, the penalty proceedings were kept in abeyance and no penalty order was passed, till the matter was pending with the appellate authorities. However, no further notice was issued and straightaway the penalty order was passed on 31.03.2018 levying penalty u/s 271AAA of ₹ 70,78,640/- @ 10% on income of ₹ 7,07,86,364/- stating that Rs. ₹ 6,96,91,395/- was offered during the search action u/s 132(4) and ₹ 10,94,969/- was offered in the return of income filed u/s 153A. 6. Being aggrieved by the penalty imposed by Ld. AO, the Respondent preferred an appeal before Ld. CIT(A) and the Ld. CIT(A) vide order dated 09.08.2019 in Appeal No. CIT(A)-3/BPL/IT11302/2018-19 allowed the respondent s appeal. 7. Now the Revenue is in appeal before us challenging the relief granted by the Learned CIT(A) by raising following ground of appeal: (i) On the facts and in the circumstances of the case, the Ld CIT(A) erred in deleting the penalty of ₹ 70,78,640/- levied by the Assessing officer u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng decisions and judgments:- On the proposition that penalty proceedings u/s 271AAA are invalid because of defective and invalid show cause notice (i) Hon'ble Chandigarh Tribunal in the case of Gillco Developers Builders (P) Ltd V. DCIT in ITA No.168/Chd/ 2017. (ii) Hon'ble I.T.A.T. Chennai in the case of DCIT V/s Shri R. Elangovan ITA No.1199/CHNY/2017 order dated 05.04.2018. (iii) Hon'ble I.T.A.T. Jaipur in the case of Ravi Mathur Vs DCIT ITA No.969/JP/2017. (iv) Hon'ble Madhya Pradesh High Court in the case of Kulwant Singh Bhatia (2018) CCH 0303. On the proposition that the assessee is entitled to immunity as provided under section 271AAA(2) when the additional income was offered and also assessed as business income and also when the authorized officer while recording the statement u/s 132(4) did not put any specific question with regard to the manner in which income was derived. (i) Hon'ble Gujrat High Court in the case of Principal CIT V/s Shahlon Silk Mills Pvt. Ltd order dated 05.02.0218. (ii) Hon'ble Delhi High Court in the case of Principal CIT V/s M/s Emirates Technologies Pvt. Ltd order dated 18.07.2017. (iii) Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings u/s 271AAA and also the penalty show cause notice issued u/s 274. It is seen that the appellant filed its return of income u/s 139(1) on 20.09.2011 declaring an income of ₹ 11,84,65,740/-. including additional income of ₹ 6,85,96,426/- which was offered u/s 132(4). In response to notice issued u/s 153A, the appellant filed the return on 12.10.2013 declaring an income of ₹ 11,95,60,710/-. Including additional income of ₹ 6,85,96,426/- which was offered u/s 132(4). In addition to this the appellant offered an amount of ₹ 10,94,969/- on account of withdrawal of excessive depreciation which was erroneously claimed in the return filed under section 139(1). The AO completed, the assessment on 26.03.2014 on an income of Rs, 13,99,31,620/-- by making certain additions and disallowances. However, all the additions and disallowances so made have been deleted in the first appeal and in the second appeal resulting into restoration of the income returned by the appellant. In the assessment order, the AO initiated penalty u/s 271AAA. The AO also issued a notice u/s 274 r.w.s. 271AAA dated 26.03.2014 stating that the appellant has concealed the particulars of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erate under all together different situations and not at all applicable for the year under consideration which is evident from the fact that penalty has been levied u/s 271AAA and not u/s 271(1)(c). This shows that penalty has been levied under confused state of mind. The appellant also contended that there is no satisfaction in the penalty order as the AO has not mentioned the details and nature of income offered by the appellant. The appellant further contended that the cash flow statement prepared by it, which was also filed before the Investigation Wing, and the income offered in various years on the basis of peak credit working was rejected by the AO in the assessment order and separate and independent additions were made by the AO in all the years. However, the cash flow statement and the peak credit working of the appellant was accepted in the appellate proceedings and all additions made by the AO in all the years were deleted in the appellate proceedings by the CIT(A) and also by the ITAT. Therefore, it is contended that when the methodology of earning and offering income by the appellant was itself rejected by the AO in the assessment order, no penalty ought to have been l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. Therefore, no requisite satisfaction was drawn in the assessment order. From a perusal of the notice dated 26.03.2014 issued u/s 274, it is seen that both the charges i.e. concealment of particulars of income or furnishing inaccurate particulars of income, which are relevant for penalty u/s 271(1)(c) are mentioned therein and the. charges relevant for levy of penalty u/s 271AAA are not mentioned. Similarly a perusal of the penalty order shows that the nature and details of undisclosed income has not been discussed in the said order and penalty has been levied merely stating that the assessee has not disclosed the manner of deriving income. In the penalty order in Para 2 it is also stated that penalty proceedings are initiated in accordance with Explanation SA to section 271. The penalty proceedings in this case were initiated without mentioning any charge in the assessment order. The penalty notice was also issued in mechanical manner specifying the wrong charges as to whether the appellant is found guilty of concealing the particular of income or have furnished inaccurate particulars of income, which are not applicable for levy of penalty u/s 271AAA. Thus the very in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings initiated in this case are not as per law and the penalty so levied is wrong. The appellant has stated that in its other group cases also, wherein penalties were levied u/s 271AAA in the assessment proceedings carried out as a result of the same search and on similar charge of not explaining the manner of earning undisclosed income, have been deleted by the Honourable ITAT Indore Bench in the cases of M/s Keti Sangam Infrastructure (I) Ltd. and other group company appeals and also in the case of Shri Tikamchand Garg and other individual cases of the group, copies of such orders have also been filed. A perusal of the order passed in the case of Shri Tikamchand Garg in IT No.1027 1028/Ind/2016 and other case by Honourable Jurisdictional ITAT on 28.06.2017 for AYs 201112 and AY 2012-13 it is seen that the penalties levided u/s 271AAA of the Act have been deleted. After discussing the issue at length and after analyzing the various deeisions.jhe Honourable ITAT has dealt the issue in Para 7 to 7.6 on internal page 20 to 27 of the order. Finally in Para 7.6 of the order the Honourable ITAT following the decision of various High Courts and coordinate Benches of various Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (supra) deleted the penalty levied u/s 271AAA of the Act observing as follows:- the assessees are eligible for getting immunity from paying penalty u/s 271AAA of the Act as the undisclosed income has been admitted during the course of search and the manner of earning income is from business sources, due taxes with interest have been paid, surrendered income has been offered as business income in returns of income filed and they have been accepted and assessed as business income only and in this manner the assessee has successfully fulfilled all the three conditions u/s 271AAA of the Act. Even otherwise, if the revenue has not asked specific question relating to the manner of deriving undisclosed income, the assessee while fulfilling the first condition of admitting the undisclosed income has already specified the manner of earning the income i.e. from business sources and the statement u/s 132(4) of the Act was not for individual business concern, but was for the group concerns/companies/business associates/ individuals and at the point of time of giving the statement during the course of search, specific details about each business concern and the source of earning such undi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urate particulars of such Income. You are hereby requested to appear before me on 24.04.2014 at 3.30 PM and show cause why an order imposing a penalty on you should not be made under section 271AAA of the Income Tax Act 1961 if you do not wish to avail yourself of this opportunity of bearing heard in person or through authorized representative you may show cause in writing on or before the side date which will be considered before any such order is made under section 271AAA. Sd/- (Ram Kumar Yadava) Dy. Commissioner of Income Tax (Central) Indore 13. The above notice clearly spells out that the provisions under which the notice was issued for levy of penalty u/s 271AAA but the charges mentioned therein refers to those provided in Section 271(1)(c) of the Act. Ld. A.O failed to mention the charges provided u/s 271AAA of the Act. We find that this issue is also squarely covered in favour of the assessee by the decision of Hon'ble Coordinate Chandigarh Bench in the case of Gillco Developers Builders (P) Ltd (supra) wherein the Tribunal after observing that the notice issued is defective held in favour of the assessee and quashed the penalty proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271(1)(c) of the Act, which otherwise is neither arising out of the facts of the case nor established against the assessee. Thus, the penalty proceedings conducted against the assessee u/s 271AAA of the Act were invalid at its very inception because of the defective and invalid show cause notice, rendering the entire penalty proceedings void abnitio. The penalty levied against the assessee is thus not sustainable on this score also. 14. As the above decision of Hon'ble Chandigarh Tribunal is squarely applicable on the assessee we therefore respectfully following the same decide this legal issue also in favour of the assessee holding that the penalty proceedings carried out in the case of the assess were void ab-initio since the notice issued itself is defective and not in accordance with law. Thus in view of above decision and in the given facts and circumstances of the case and various judgments referred above, we find no reason to interfere in the finding of Ld. CIT(A) deleting the penalty of ₹ 70,78,640/- levied u/s 271AAA of the Act. Accordingly the ground raised in ITA No.928/Ind/2019 by the revenue stands dismissed. 15. Now we take up ITA No.929/Ind/2019 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee also submitted that the facts of the instant case are same to the extent of issue of similar type of defective notice without specifying the specific charge against the assessee as mandated in Section 274 r.w.s. 271AAB of the Act. 19. Ld. Counsel for the assessee further submitted that on merits also the assessee has a strong case as penalty levied u/s 271AAB of the Act is leviable on undisclosed income whereas in the case of assessee there was not such undisclosed income. The income offered u/s 41(1) of the Act was in the regular return of income filed u/s 139(1) of the Act and the outstanding liability payable to the creditor was duly appearing in the regular books of accounts and the dispute with this party was well evidenced with necessary documents. Even the Ld. A.O has also discussed the issue in the assessment order. Therefore by no canon suo-moto income offered u/s 41(1) can be treated as undisclosed income for the purpose of levy of penalty u/s 271AAB(1)(a) of the Act. Ld. Counsel for the assessee further referred and relied on the decisions in support on legal and merits of the case:- For the proposition that show cause notice issued u/s 274 is with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act, assessee had e-filed the return of income u/s 139(1) of the Act on 17.10.16 declaring income of ₹ 20,990/-. Further the income shown by the assessee in the return has been accepted by the Ld. A.O in the assessment order framed u/s 143(3) of the Act. The only dispute is with regard to the penalty levied u/s 271AAB of the Act @10% on the income offered u/s 41(1) of the Act at ₹ 13,37,84,149/- on account of cessation of liability. 21. We find that Ld. CIT(A) after dealing extensively with the facts of the case and drawing support from relevant judgments and decisions has allowed both the legal ground as well as ground raised on merits in favour of the assessee observing as follows:- 4.1 Ground No. 1 2 - Through these ground of appeal, the appellant has challenged the levy of penalty of ₹ 1,33,78,415/- u/s 27lAAB of the Income Tax Act and also the initiation of the penalty proceedings u/s 271AAB and also the penalty show cause notice issued u/s 274. It is seen that the appellant filed its return of income u/s 139(1) on 17 .1 0.2016 declaring an income of ₹ 20,990/- including an amount of ₹ 13,37,84,149/- it was offered as cessation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no satisfaction in the penalty order as well, as the appellant has not earned any undisclosed income as evident from the penalty order. It is also contended that the penalty order is vague as it is simply stated that the assessee has offered the amount to tax u/s 41(1) of the Act as cessation of liability, therefore, penalty is leviable U/S 271AAB(1)(a). It is also contended that the amount payable was duly reflecting in the books of accounts of the appellant and that the said liability was otherwise found in order and it is not a case of unearthing any income on the basis of any seized incriminating material. Since there is no undisclosed income penalty u/s 271AAB is not attracted in this case. It is also contended that the said liability was in respect of the road project of the appellant and the related expenditure was capitalized in the books of accounts to the cost of the project and no deduction was claimed through the profit and loss account, therefore, the provisions of section 41 (1) are even otherwise not attracted. The income was offered u/s 41(1) under a wrong notion, which was also assessed by the AO. It was further contended that since the said amount was not in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed income has been made out either in the assessment or in the penalty order. It is rightly pointed out by the appellant that there is not even a whisper of 'undisclosed income' in the assessment order and also in the penalty order. There is no reference of any incriminating material or any other documents or record found during the search regarding the said contractor or regarding the liability appearing in the books of the appellant. There is nothing to suggest on record that the said liability was ingenuine or bogus. The appellant has demonstrated that the said amount was not paid on account of dispute with the said party, who did not completed the construction work timely and properly. All these facts though mentioned in the assessment order and also in the penalty order are not disputed or rebutted by the AO in the assessment order or even in the penalty order. On these facts of the case, it is held that the said income offered by the appellant u/s 41(1) in respect of a liability duly recorded in its books of accounts, cannot be categorized as 'undisclosed income' attracting penalty u/s 271AAB. It is also seen that though the said liability was on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase under appeal before me are identical to that of the case of Kulwant Singh Bhatia (Supra) in so far as additional_ income was offered by the assessee in the returns filed after the search and penalties u/s 271(1)(c) were levied on the basis of show cause notice issued without striking off either of the two charges. Similarly in the present case penalty show cause issued under section 274 r.w.s . 271AAB mentioned wrong and inapplicable charges. In the case before the Honourable High Court, the penalties were deleted by the Tribunal holding that the same as not sustainable in law, as defective penalty notice was issued under section 274 and no specific charge was mentioned in the penalty show cause notice. Later the order of the Honourable IT AT was affirmed by the Honourable Jurisdictional High court. In the present case before me also the penalty show cause issued under section 274 was defective as no specific charge under section 271AAB was mentioned, rather the charges of section 271(1)(c) are mentioned. Therefore, the proposition laid down by the Honourable Jurisdictional High Court of Madhya Pradesh is applicable in the present appeal also and it is held that the penalty pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e show cause notice is cryptic in nature and not in accordance with law since the notice issued for levying the penalty u/s 271AAB of the Act refers to the charges provided in Section 271(1(c) of the Act. When the penalty has been initiated u/s 271AAB of the Act then the charges should be those mentioned in Section 271AAB of the Act about the levy of penalty under various sub-clauses of Section 271AAB of the Act and the one applicable to the assessee. But in the instant case Ld. A.O has issued notice referring to the penalty to be levied u/s 271AAB of the Act but mentioning various charges provided in Section 271(1)(c) of the Act. We have consistently held such notices as cryptic and not in accordance to law and therefore held the penalty proceedings as void ab-intio deserving to be quashed. In one of the case decided by us namely Dr. Rajesh Jain (supra) we after adjudicating similar issue and identical facts, allowed legal ground in favour of the assessee since the notice issued u/s 274 r.w.s. 271AAB of the Act was defective and not in accordance with law. The relevant extract of our decision in the case of Dr. Rajesh Jain V/s DCIT ITA No.905/Ind/2018 order dated 19.02.2018 is rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) on or before the specified date- (A) pays the tax, together with interest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty per cent of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the search, in a statement under sub-section (4) of section 132, does not admit the undisclosed income; and (ii) on or before the specified date- (A) declares such income in the return of income furnished for the specified previous year; and (B) pays the tax, together with interest, if any, in respect of the undisclosed income; (c) a sum which shall not be less than thirty per cent but which shall not exceed ninety per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b). (2) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (3) The provisions of sections 274 and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch order to the Assessing Officer'] 9. From perusal of the above provision we observe that sub section 3 of Section 271AAB of the Act talks about issuing the notice u/s 274 of the Act. So for initiating the penalty proceedings u/s 271AAB of the Act the first step to be taken by Ld. A.O is to issue a valid notice u/s 274 of the Act. Sub-section (1) to Section 274 of the Act provides a procedure that No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard . To comply with this requirement the notice u/s 274 should be clear enough to convey the assessee about the charge which is to be leveled against him/her/it for levying the penalty for the contravention of the related provisions of the Act which in the instant case relates to not surrendering of undisclosed amount during the course of search which is subsequently admitted during the course of assessment and not challenged before the Ld. CIT(A). So it was incumbent for Ld. A.O that in the notice issued u/s 274 of the Act he should have mentioned that penalty u/s 271AAB of the Act may be levied @10/20/ 30% since the assessee fal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce dated 22.03.2016 the Ld. A.O has very casually used the proforma used for issuing notice before levying penalty u/s 271(1)(c) of the Act for the concealment of income or furnishing of inaccurate particulars of income. It does not talk anything about various clauses of section 271AAB of the Act for levying penalty @10%/20%/30%. Certainly such notice has a fatal error and technically is not a correct notice in the eyes of law because it intends to penalize an assessee without spelling about the specific charge against the assessee. 12. Hon'ble Jurisdictional High Court in the case of PCIT V/s Kulwant Singh Bhatia (supra) dealt the issue of defective notice issued u/s 274 r.w.s. 271(1)(c) of the Act and Hon'ble court after relying judgment of Hon'ble Supreme Court in the case of CIT V/s Manjunatha Cotton Ginning Factory and CIT v/s SSA S Emerald Meadows (supra) held that such show cause notices would not satisfy the requirement of law as notice was not specific. Merely issuing notice in general proforma will negate the very purpose of natural justice. Hon'ble Apex Court in the case of Dilip N Shraf 161 Taxmann 218 held that the quasi criminal proceedings u/s 271 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271 (1)(c) of the Income Tax Act, 1961 (for short 'the Act,) to be bad in law as it did not specify Which limb of Section 271 (1 )(c) of the Act, the penalty proceedings had been initiated i.e., Whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, While allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of CIT vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed . In the earlier case of Manjunatha Cotton and Ginning Factory (supra) their lordship had observed as under:- Notice under section 274 of the Act should specifically state the grounds mentioned in section 271(l)(c) , i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s 274 r.w.s. 271AAB was adjudicated, the judgment of Hon'ble Allahabad High Court in the case of Pr. CIT Vs Sandeep Chandak (supra) has been discussed and distinguished observing as follows:- It is further submitted that in para 5 of this judgment (Ravi Mathur), the case quoted by ld CIT(A) Pr. CIT vs Sandeep Chandak (All.) was distinguished as under: 5. Before we proceed further, the decisions relied upon by the ld D/R are to be considered. In the case of Principal CIT vs Sandeep Chandak Others [TS-6389-HC-2017(Allahabad)-O] (supra) the issue before the Hon ble High Court was the defect in the notice issued under section 271AAB on account mentioning wrong provision of the Act being 271(1)(c) of the Act. The Hon ble High Court after considering the fact that the show cause notice issued by the AO though mentions section 271(1) in the caption of the said notice, however, the body of the show cause notice clearly mentions section 271AAB, which was fully comprehended by the assessee as reveals in the reply filed by the assessee against the said show cause notice. Hence the Hon ble High Court has held as under: - The ld A.Rs have also challenged that the caption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- stands deleted. We accordingly allow the legal ground raised by the assessee challenging the validity of notice issued u/s 274 r.w.s. 271AAB of the Act and quash the penalty proceeding as void ab intio. In the result appeals of the assessee(s) for Assessment Years 2014-15 is allowed on legal ground. 17. Since the penalty u/s 271AAB has already been dealt on legal ground and deleted on the preliminary legal points, other grounds and arguments of the assessee dealing with the merits of the levy of penalty are not been dealt with, as the same are rendered academic in nature. Thus grounds raised on merits are dismissed as infructuous. In the result appeal of the assessee is allowed on legal ground. 24. The above finding in the case of Dr. Rajesh Jain (supra) was also applied by us in the case of Smt. Rajrani Mittal others in recent decision vide ITA Nos. 852 to 858 879/Ind/2019 order dated 07.09.2020. 25. We therefore respectfully following our above referred decision, find no reason to interfere in the finding of Ld. CIT(A) deleting the penalty of ₹ 1,33,78,415/- levied u/s 271AAB of the Act allowing legal ground raised by the assessee. 26. Though we ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk in respect of four lane of NandedNarsi Road project and two lane improvement of Narsi-Degloor to State Border road (MSH-6) situated in the State of Maharashtra. As accepted by the Ld. A.O there was a dispute with the contractor due to quality of work and timing of work completion since the assessee was under the contractual obligation of the State Government of Maharashtra to complete the work in limited time. Thus assessee was forced to make alternate arrangement to complete the contract. It is also noticed that as per financial record available on public portals there is a substantial fall in the activities of the contractor M/s. Horizon Infrastructure Ltd so much so that its turnover reduced from ₹ 468 crores during Financial Year 2012-13 to ₹ 70.82 crores during Financial Year 2014-15. The contractor M/s. Horizon Infrastructure was incurring huge losses and reported net loss of ₹ 171.54 crores for the year ended on 31st March 2015. There was an outstanding amount payable to M/s Horizon Infrastructure Ltd at ₹ 13,37,84,149/- in the books of the assessee as on 31.3.2015. Since the assessee had made alternate arrangement to complete the contract and M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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