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TMI Blog2013 (7) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... prays that the order of the Ld. CIT(A) on the above ground(s) be set-aside and that of the Assessing Officer restored. 2. Regular assessment, in the instant year, was framed u/s 143(1) dated 26.03.2003. 2. Doosan Heavy Industries & Construction Company Ltd. (Originally Korea Heavy Industries & Construction Co. Ltd.) (Doosan), is a company tax resident in South Korea. The company is a project contractor. The assessee entered into a contract with Kondapalli Power Corporation Ltd. (KPCL), AP, to set up the project on a turnkey basis. KPCL awarded the Onshore project to Hanjung DCM Ltd.(Hanjung) and Offshore Project to Doosan, vide agreements dated 01.02.1998. The assessee Company on securing the Offshore project, assigned/ sub-contracted the same to Encon Services Ltd. for a consideration of Rs. 99,79,20,000/- 3. In the course of assessment proceedings for assessment year 2001-02, the AO noticed that the assessee had lodged an insurance claim for the loss of its equipment due to the barge, which was carrying the equipment, had capsized. The assessee, therefore, lodged the claim for USD 103 million, whereas, the insurance company made a payment of INR Rs. 15 million, towards the rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the appellant that this price has been paid in Foreign Exchange outside India and that the supplies as per the agreement have been taken outside India by KPCL. As evidence of having delivered the goods outside India, the appellant has filed a commercial advice dated 08.02.1999 issued by Alstom Gas Turbines, S.A. sending the equipment to KPCL for delivery at Chennai. Copy of Bill of Entry has also been filed as a sample to support that the equipment has been imported by KPCL and therefore delivery has also been taken outside India. Simultaneously there is another contract between KPCL and Korea Heavy Industries & Construction Ltd dated 01.02.1998 which provided that the appellant company would provide onshore civil and construction services regarding the setting up of the power plant. The original assessment was completed u/s.143(3) in which the AO had examined the fact that the appellant company has subcontracted its onshore civil construction services to Encon Services Ltd. During the proceedings of A.Y.2001-02, the issue of the Civil Suit filed for recovery of insurance amount was examined by the ,AO and no adverse view were taken in the assessment of A.Y.2001-02. However, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/4529/44085/98 dated 23.03.1999. Schedule to this Insurance Policy provided details of the property insured. It also provided that the KPCL is the Principal and the appellant company was a Contractor. The material properties insured were also identified in the Policy. Total premium payable was mentioned in the schedule to the Policy and it was also paid by the appellant. The scope of work of the Onshore Civil and Construction Services Contract is mentioned in the contract dated 01.02.1998 and it reads as under: "I. SCOPE OF WORK 1. The scope of work shall comprise the civil, erection and the construction at the site in respect of the facility the following broad categories and as more particularly specified in the technical specifications of the contract. - Unloading and handling at Indian port and port clearance of all equipment/materials of non-Indian origin; inland transportation to site and inland insurance; receipt, unloading, handling and storage at site, erection, testing, start-up/commissioning and performance testing of all equipment/materials and supervision during the erection! commissioning for the Facility; - Construction of all associated civil, structural and ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f equipment, Onshore Civil and Construction Services Contract, responsibility for the transportation, etc., the averment of the appellant in para-5 of the Civil Suit, "Plaintiff agreed to supply equipment, materials and design for the construction of KPCL power plant primarily' refers to a roll in the power project" can be appreciated. The value of the supply contract mentioned at US$ 103 million is same as that mentioned in the Offshore Equipment Supply Contract. On the basis of the words used in the para-5 of the Civil Suit, it cannot be established that the appellant has supplied the equipment, material and design. The Offshore Equipment Supply Contract is very clear. It provides that the equipments shall be supplied by Hanjung to KPCL. Onshore Civil and Construction Services Contract provides that the power plants has to be constructed by the appellant company by using not only the equipment supplied by Hanjung, but also equipments which the appellant himself may construct and commission. The overall responsibility of the construction and erection of power plant was therefore on the appellant company as per the Onshore Contract. It was also responsible for the onshore transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment under section 148, as bad in law, also finds our approval and which we sustain. In these circumstances, we do not wish to disturb the findings of the CIT(A), to hold that reassessment proceedings were bad in law, and all consequential proceedings are annulled. 12. Ground no. 2, pertain to alleged profit from sale of equipment. Though the ground become infructuous in view of our decision, holding the assessment proceedings to be bad in law. 13. However, the issue is covered by the decision in its own case in ITA No. 4327/Mum/2008 and 4326/mum/2008 for assessment years 1999- 2000 and 2002-2003, wherein the coordinate Bench has held that there has been no sale of equipment. This observation, has been consistently held by the appellate authority in the preceding years. 14. Since the issue and grounds framed taken is identical, we do not wish to disturb the findings of the CIT(A), which we sustain and which has been consistently followed by the coordinate Bench as well. We, therefore, reject ground No. 2 on merits as well. 15. Grounds no. 3 & 4 are general. 16. In the result, the appeal filed by the department is dismissed. ITA no. 3897/Mum/2006: Appeal filed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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