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Issues involved: Assessment of income u/s.148 for assessment year 2000-2001.
The Appellate Tribunal ITAT MUMBAI, in the case concerning the assessment of income u/s.148 for the assessment year 2000-2001, addressed the issue raised against the direction of the CIT(A) upholding the assessment of income at Rs. 3,87,90,040. The assessee, a contractor following cash system of accounting, had shown work in progress at Rs. 23,32,66,919 without offering any income for taxation. The Assessing Officer applied a 15% profit rate on the work in progress, resulting in an addition of Rs. 3,47,90,038. The Tribunal noted previous instances where similar additions were made and later deleted, emphasizing the completion of the project and the offering of income for taxation in subsequent years. The Tribunal set aside the order and remanded the matter to the Assessing Officer for further examination to determine if the projects were part of the work completed in a later assessment year where income was already offered for taxation. The Assessing Officer contended that the total work done up to assessment year 1997-98 was Rs. 36.78 crores, and the total work in progress up to assessment year 2000-2001 was about Rs. 63.67 crores. However, in assessment year 2001-2002, the work in progress was noted at Rs. 19.59 crores, indicating a discrepancy in the figures. The Tribunal agreed that there might be confusion regarding the work in progress and the projects undertaken, suggesting a need for clarification. The matter was remanded to the Assessing Officer to determine if the work in progress for the current year was carried over to subsequent years and if the projects were completed in a later assessment year where income was offered for taxation. The decision was left to the Assessing Officer based on the factual matrix and legal considerations. In conclusion, the appeal was allowed for statistical purposes, and the order was pronounced on November 24, 2010.
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