TMI Blog2022 (12) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... of Home Affairs thus added the same stating that it is of capital nature and not allowable as revenue nature - HELD THAT:- As evident that the amount incurred for land acquisition and the assessee Company was executing the Border Out Post (BOP) Works under Phase-11 as per MOU signed in between NPCC and MHA (GoI) on Dt. 14.07.2010. Serial No. 17 of MOU clearly state that, Land Acquisition for al l BOPs will be made by NPCC and cost of the land acquisition shall be included in the cost estimates. BSP will provide necessary help to NPCC in land acquisition and serial No.7 of the same MOU clearly mentioned that NPCC shall hand over the BOPs and allied works after their completion to the designated agency nominated by MHA . The expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Resources. Its main business is civil construction of dams, bridges, tunnels, power houses, flyovers, buildings, canals and other infrastructure projects. Its clients are Central and State Government Departments and PSUs. The assessee filed its return of income on 29.09.2014 declaring total income of Rs.16,71,65,170/-. Subsequently, the assessee revised its return of income on 30.03.2016 declaring income at Rs.24,16,53,140/-. The Assessing Officer made an addition of Rs.5.25 crores on account incidental charges on works and Rs.1.49 crores on account of unclaimed liabilities. 3. The ld. CIT(A) allowed the appeal of the assessee dismissing the additions made by the Assessing Officer. Aggrieved the revenue filed appeal before us. 4. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuted in the assessee s favour. Further, it is also not disputed that the expenses were incurred on behalf of the third entity, i .e. Ministry of Home Affairs. Besides, the payment is for land acquisition and electrification, which is of capital nature and not allowable as revenue expenditure. 7. It was argued that the Assessing Officer has admitted that no title of land was executed in the assessee s favour and expenses were incurred on behalf of the third entity i.e. Ministry of Home Affairs. The AO added the same stating that it is of capital nature and not allowable as revenue nature. It was argued that this total expenditures were incurred as a part of project cost and corresponding revenue has been booked as turnover in the prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed /approved the estimates of each BOP from MHA tentative cost of land has been included in the Estimates. After, getting demand from Concerned State Government through BSF Authority (user of BOPs) the assessee company has paid on behalf of MHA (GoI) and corresponding income against these expenses has been booked as turnover in profit and loss account. From the above, it is clarified that expenditure incurred on by NER(IBBW) Zonal office during the financial year 2013-14 towards land acquisition compensation and Other Incidental charges as part and partial of the contract agreement and the same is included in the total project cost. Hence above expenditure on behalf of MHA (GoI) as project cost and was not assets creation in name of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture incurred towards land acquisition compensation for BOPs works on behalf of MHA and the asset was created in favour of BSP and held by BSF not the assessee. For instance, copies of few Form-5 issued by the Government of Meghalaya and Assam as Annexure-1(g), reflects the name of the organization acquiring the land. 15. Thus, it is clear that expenditure incurred on by assessee during the financial year 2013-14 towards land acquisition compensation were the part and parcel of the contract agreement and the same were included in total project cost. Hence above expenditure on behalf of MHA (GoI) as project cost and there was not assets creation in name of the assessee company and cannot be treated as capital Expenditure in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenditure of Rs.111,54,55,200/- on service connection charges were paid to Tripura State Electricity Board (TSEB), Agartala for border flood lighting works in the state of Tripura as per MOU signed between assessee and MHA (GoI) dt. 30.09.2009 and the estimates of the expenditure were revised in the 22nd/2010 HLEC meeting held on 17.09.2010 vide agenda item No. IBB/9. It is also evident that the assessee has booked the corresponding income against these expenses in its turnover in the profit and loss account during the year under consideration. 18. Hence, the expenditure done on behalf of MHA (GoI) as project cost was not asset creation in the name of the assessee company, and cannot be treated of capital nature. Therefore on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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