TMI Blog2019 (3) TMI 1909X X X X Extracts X X X X X X X X Extracts X X X X ..... liability is debited to the Profit Loss account under the head liquidity damages . Since, the issue is settled in favour of the assessee by Special Bench and also by Hon ble High Court of Andhra Pradesh in the assessee s own case, the assessee has requested to allow the same as deduction. On identical issue, for the A.Y.2010-11 . [ 2016 (9) TMI 1603 - ITAT VISAKHAPATNAM] this Tribunal has deleted the addition and dismissed the appeal of the revenue. Therefore, respectfully following the view taken by this Tribunal, Special Bench and Hon ble High Court of Andhra Pradesh, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue on this ground. Rental income and excess depreciation - CIT(A) given finding that the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R SINGH, J. These appeals are filed by the revenue against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], Vijayawada vide I.T.A.No.546/CIT(A)/VJA/2013-14 dated 30.08.2016 and I.T.A. No.16/CIT(A)/VJA/2015-16 dated 15.03.2018 for the Assessment Year (A.Y.) 2011-12 and 2012-13 respectively. 2. The common issue involved in the appeals for the A.Y. 2011-12 and 2012-13 is liquidated damages paid towards incomplete contracts. For the A.Y.2011-12, the assessee had agreed for the addition of liquidated damages and for the A.Y. 2012-13, the AO made the addition of liquidated damages for an amount of ₹ 1,84,61,840/-. 3. Briefly stated the facts related to the case are that the assessee is a public limited company engag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchaser has been created under the agreement irrespective of the fact whether delivery is effected or not. Admittedly, the assessee is maintaining mercantile system of accounting. Since, the agreement is not in dispute, but only the method of quantification is disputed, the assessee has to incur the liability irrespective of actual payment. To test it otherwise, whether on the aforesaid clause, buyer is to disclose as in income on account of the liquidated damages by maintaining mercantile system of accounting or not. From the aforesaid clause, no doubt, in our view the payee is required to disclose as an income, as this term clearly stipulates the accrual of income. In our view, the terms clearly stipulate the obligation to make paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on record. It is a fact that the assessee has been agitating this issue right from the A.Y. 1982-83 onwards in different forums. Therefore, we agree with the contention of the assessee that there was a misunderstanding on the part of the AO with regard to acceptance disallowance of the expenditure. The assessee also submitted the affidavit to that extent. In the instant case, on identical facts on the same issue, the Special Bench has decided the issue in favour of the assessee and the Hon ble High Court has upheld the order of the Tribunal and dismissed the appeal of the revenue. During the appeal hearing, the Ld.AR argued that the liability regarding the liquidity damages arose by virtue of terms of contract between the assessee and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of ₹ 5,34,547/-. On appeal before the CIT(A), the assessee reconciled the difference and the Ld.CIT(A) found that the assessee had offered the difference amount of ₹ 5,34,547/- under the head business income , therefore, deleted the addition. 7. Against the order of the Ld.CIT(A), the revenue has filed appeal before this Tribunal. 8. We have heard both the parties and perused the material placed on record. The Ld.CIT(A) given finding that the difference amount of ₹ 5,34,000/- was offered as income from business in the Engineering Unit. For the sake of clarity and convenience, we extract relevant part of the order of the Ld.CIT(A) which reads as under : The balance of ₹ 30,910/- (B-A) (ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f running them on hire, the AO viewed that higher depreciation is available only in the year in which the new plant and machinery was put to use and in the subsequent years, the depreciation has to be restricted to 15%. Accordingly, the AO disallowed the depreciation. The Ld.CIT(A) deleted the addition observing that having allowed the depreciation in the earlier years, there is no reason to restrict the depreciation @15% in the impugned assessment year without having any fresh material to show that the vehicle was not a commercial vehicle. For the sake of clarity and convenience, we extract the relevant part of the order of the Ld.CIT(A) which is available in page No.5 and 6 reads as under : I fail to persuade myself to agree with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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