TMI Blog2021 (9) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground that expenses incurred by the assessee company for acquisition of land for IBBF Project has not created any assets in the hands of assessee as the assessee company has merely executed a contract for construction of Border Out Post on behalf of Ministry of Home Affairs. Consequently, addition made by the AO and sustained by the ld. CIT (A) is ordered to be deleted. Addition on account of provisions written back under MAT provisions - Disallowances on account of provision of written back - AO made the addition holding that assessee has failed to give the information - HELD THAT:- As relying on own case [ 2021 (6) TMI 718 - ITAT DELHI ] we are of the considered view that addition made by the AO and sustained by the ld. CIT (A) is not sustainable in the eyes of law because the provisions made by the assessee in earlier years were never claimed or allowed to the assessee, which fact however needs to be verified by the AO. Consequently, addition made by the AO and sustained by the ld. CIT (A) is ordered to be deleted subject to verification by the AO qua the computation of total income of the assessee for earlier years if these provisions have not been allowed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action of Ld. AO in making addition of ₹ 25,07,47,401/- on account of provisions written back is bad in law and against the facts and circumstances of the case. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of ₹ 25,07,47,401/- under the MAT provisions. 7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not admitting the additional evidences filed by assessee under rule 46A of Income Tax Rules. 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee company is a public sector undertaking under the Ministry of Water Resources having business of civil construction of dams, bridges, tunnels, power houses, flyovers, buildings, canals and other infrastructure projects. Clients of assessee company are Central and State Government, Departments and Public Sector Undertakings. 2. During the scrutiny proceedings, Assessing Officer (AO) noticed from the financial statement of the assessee company that under the head Other expenses Administration , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. AO made disallowance of ₹ 4,61,876/- on account of bad debt written off u/s 36 (2) of the Income-tax Act, 1961 (for short the Act ), which the ld.CIT (A) has upheld. 9. Coordinate Bench of the Tribunal upheld the findings returned by ld. CIT (A) in assessee s own case for AY 2012-13 (supra) deleting the identical disallowance by returning following findings :- 7. The first and second ground of appeal is with respect to allowability of bad debt written off of ₹ 4,44,994/-. This issue was concerned with the written off of the bad debts. Identical issue in the earlier year arose which were dealt with by the coordinate bench vide para No. 8 of order as under:- 8. Ground No. 1 and 2 of the appeal is with respect to deletion of the disallowance of ₹ 2,72,49,141/- on account of bad debts written off. Before the ld AO the assessee submitted unit wise details of such write off along with supporting evidences. The claim of the assessee is that debt is written off, it is taken into computation of income on earlier years, these amounts are 10 to 15 years old and amount was written off in the books of account and therefore, the claim is proper. The ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owances of ₹ 113,50,15,51/ deleted by the ld CIT(A) that was held to be capital expenditure by the ld AO. During the course of assessment proceedings the ld AO noted that the assessee has debited ₹ 113.50 crores as miscellaneous expenditure on working of NEZ PMC. These expenditures were incurred in connection with land acquisition and service connection charges paid to Tripura State Electricity Board for Indo Bangladesh Border fencing project. The ld AO held that it created an asset and therefore it is capital expenditure. Claim of the assessee is that corresponding income against the above project awarded to the assessee by the Ministry of Home Affairs has already been taxed as revenue contract income. As the work was awarded by Ministry of Home Affairs and assessee is merely a contractor there is no capital expenditure in the hands of the assessee, that there is no asset creation in the hands of the assessee. The ld CIT(A) noted that the assessee is public sector undertaking, it executed border outpost work for the Ministry of Home Affairs and has incurred the expenditure on land acquisition compensation, service connection charges and miscellaneous expenditure amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /ld. CIT (A) made/confirmed the addition of ₹ 25,07,47,401/- on account of provisions written back under MAT provisions. 15. This issue has also been decided by the coordinate Bench of the Tribunal in assessee s own case for AY 2011-12 (supra) by returning following findings :- 10. Ground no. 4 is with respect to deletion of disallowances of ₹ 12,20,71,176/- on account of provision of written back. The ld AO made the addition holding that assessee has failed to give the information. Claim of the assessee is that above provision which is written back during the year cannot be charged to taxed for the reason that the year in which the provision was created , it was already disallowed and in that year the assessee did not claim the above provision as allowable expenditure. Thus, according to the assessee when the original provision was created it was not claimed as deduction but was disallowed in the computation of income itself. Therefore, when the above provision is written back in this year it cannot be once again charged to tax. The ld AO disallowed the above provision. Before the ld CIT(A) the above claim was contested and the computation of income for last th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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