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TMI Blog2015 (9) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... l charges but, that itself is not conclusive enough to prove the fact that amount received was not advance but towards work executed. When it is a fact on record that during the impugned AY assessee has only received mobilization advances being 15% of the total contract price and has not raised any bill on the contractee towards a portion of the work executed. Moreover, when assessee has shown the income on the contract work in the succeeding AY, which also includes work-inprogress of 16.22 crores, on which income has been estimated by AO in the impugned AY, in our view, there is no justifiable reason in interfering with the order of ld. CIT(A). In any case of the matter, there is no prejudice caused to revenue as the income assessable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes as under: 07/05/2005 ₹ 2,41,48,750 29/07/05 ₹ 4,82,07,500 21/09/2005 ₹ 7,25,43,750 On verifying TDS certificate, AO noticed that the payments made were on account of professional and technical services. He found that assessee has received 103.63 crores towards mobilization advances and at the same time has given loans and advances to subcontractors amounting to ₹ 28.66 crores. Whereas at the end of the year, assessee has disclosed work-in-progress at ₹ 16.22 crores. Considering the aforesaid facts, AO issued a show cause notice to assessee to explain why income should not be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and accordingly completed the assessment. Being aggrieved of the assessment order, so passed, assessee preferred appeal before ld. CIT(A). 4. In course of hearing of appeal before ld. CIT(A), assessee apart from challenging the estimation of income on various other grounds contended that during the relevant PY assessee has only received 15% of the total contract value as mobilization advance. It was submitted that assessee has started raising bills only in FY 2006-07 and LAPPL also started recovering the advance amount from bills raised by assessee. It was submitted by assessee that once assessee has raised bills, and amounts towards contract executed was received, it has started recognizing revenue and has shown income in assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months of July 2005 and March 2006 by March 2006 the works were under progress. As per records the works assigned to the appellant by the Contractor Were completed in June 2006. After completion of works, bills were submitted and finally handed over the possession and accordingly offered income in the next financial year relevant to the assessment year 2007-08. Thus for the year under consideration as the project was under progress, the appellant has drawn work in progress account and also prepared a balance sheet. Seeing the state of affairs, the AO Was of the view that as major works have been completed, it must result in income and as the appellant has not prepared the profit and loss account, rightly so, the AO has Subjected the 8% o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived by assessee from LAPPL is a contract receipt and accordingly proceeded to estimate the income. However, as can be seen from the terms of the relevant agreement between assessee and LAPPL, assessee is to receive 15% of the total contract amount as mobilization advance. Though, it may be a fact that in the TDS certificate, deductee has mentioned it as payment towards professional charges but, that itself is not conclusive enough to prove the fact that amount received was not advance but towards work executed. Assessee has also through documentary evidence demonstrated that during the relevant PY it has not raised any bills on the contractee towards contract work entrusted to it, but, has started raising bills in next FY after completio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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