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TMI Blog2016 (4) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the permit from CPWD dated 01.08.2008 at page no.60 and also drew attention to the income tax return of the assessee firm for the assessment year 2009-2010 were the assignment income was offered. These are the new set of facts which the assessee for the first time brought on record. So, considering apparent facts and circumstances and the agreements and material evidence and also the provisions of Rule 46(A) of the Income Tax Rules were additional evidence has been filed. The opportunity has to be provided to Assessing Officer which the Commissioner of Income Tax (Appeals) overlooked. We are of the opinion that the matter has to be remitted to the file of the Assessing Officer - Decided in favour pf revenue for statistical purposes. Deprecation on Wind Turbine Generators (WTG) - @100% OR @50% - Held that:- There is scope of confusion regarding invoice dated 30.9.2007 on comparison of delivery challans issued much prior to the date of invoice. Further the first meter reading was taken on commissioning on WTG by the territorial field officer on 13.10.2007 explaining the generated units for export and import. The ld. Commissioner of Income Tax (Appeals) has allowed 100% deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income was processed u/s.143(1) of the Act. Subsequently the case was selected for scrutiny and due to change of jurisdiction fresh notice was issued. In compliance to notice, the ld. Authorised Representative of the assessee appeared and filed power of attorney and filed details from time to time and produced books of accounts, bank statements, and written submissions and the ld. Assessing Officer completed assessment. The assessee is providing project management consultancy services and as per tax audit report u/s.44AB of the Act the assessee is following mercantile system of accounting. The main source of income being assignment fee received from three parties on assigning of its share in the IT Park were assessee firm has entered into builders agreement on 14.04.2006 for two floors in the IT Park with the builder M/s. Vishranthi Homes Private Ltd (VHPL) a group concern and also receive income from sale of electricity generated through WTG. The issue in dispute being Assignment fee of HTMT Global Solutions P. Ltd. The assessee firm entered into real estate transaction with M/s. Vishranthi Homes Private Limited (builder) which has entered into an joint venture agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer called for the escrow account and found A7,40,88,005/- and A8,84,87,260/- was transferred to account no.CD1830 and the amount has been withdrawn by the assessee firm. The ld. Assessing Officer also examined the ledger accounts and found A8,84,84,260/- was shown as liability towards HTMT Global received in Escrow Account. On verifying the source and usage of funds, the ld. Assessing Officer is of the opinion that the amounts were utilized by the assessee firm and the issue of furnishing bank guarantee for specific performance is no way connected to the of money or in accordance with the agreement. The ld. Authorised Representative explained that income of the fourth assignee will be admitted only after completion of the project and relied on the jurisdictional decision of High Court but the Assessing Officer had distinguished the decisions as they are not applicable in respect of construction business and concept of retention money is not applicable. With these observations, the Assessing Officer suspected that the firm has made a camouflaged arrangement to withdraw the money and utilized for personal gains of partners who are also Directors of VHPL Ltd. The Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n approvals etc. from the competent authorities for the construction of the said property. Further, as the amount was deposited by HTMT Global Solutions Ltd in an Escrow account with the bank, in case of any failure to get the project through (i.e. failure to obtain necessary approval), the buyer (i.e. HTMT Global Solutions P Ltd) can withdraw the amount from the bank (from the escrow account) straight away and the assessee has no right to stop it. The assessee also explained that these conditions were not insisted by the first mentioned three buyers and the amounts are directly received. Hence the first three assignments have become final and accordingly the said receipts from the first three parties have been recognized as income during the financial year 2007-08. Subsequently, the assessee j VHPL obtained the necessary plan permits from Chennai Metropolitan Development Authority was obtained on 01.08.2008. Based on which, the building license fee was paid on 25.08.2008. Therefore, the assignment of rights in the property to HTMT Global Solutions P Ltd becomes final only on obtaining the planning permit on 01.08.2008 and hence the said consideration has been recognized as income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditional and is subject to assessee /builder obtaining necessary approvals for the project. The ld. Commissioner of Income Tax (Appeals) found taxation rates applicable for the assessment year 2008-09 and 2009-2010 are same and there is no loss of Revenue to the Department if income is offered in next year. The assignment transaction with HTML Global Solutions Pvt. Ltd is totally conditional and different from three assignees. The assessee has not received any money from the assignee instead received the consideration from Escrow account in the bank on furnishing of 100% bank guarantee as per requisite stipulated conditions of the agreement. The ld. Authorised Representative submitted that the assessee firm has obtained necessary permissions from the concerned authorities on 01.08.2008. Based on this permissions, assignment rights crystallized in favour of HTML Global Solutions Pvt. Ltd and recognized as consideration in the financial year 2008-09 and subsequent to the obtaining of permission balance consideration was paid by HTML Global Solutions Pvt. Ltd on 29.08.2008 and 31.12.2008 to the assessee firm. Whereas assessee upon receipt of the assignment fees offered entire inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and judicial decisions and agreement entered with the assignee and filed paper book on the agreements, guarantees and also permission letters to substantiate their claim and argued that there is no suppression of income and assignment fee was offered to tax in the assessment year 2009- 2010. 7. We heard the rival submissions, perused the material on record and judicial decisions cited. The contention of the ld. Departmental Representative that the Assessing Officer has made a elaborate examination of records with information submitted in assessment proceedings and passed assessment order based on the facts of the case. The assignment fees is accounted on Mercantile System of Accounting by the assessee firm whereas the assessee has considered income of three assignees in the books of accounts and offered to tax. In respect of fourth assignee fee which is a disputed issue was offered in assessment year 2009-2010. The ld. Commissioner of Income Tax (Appeals) has summarized and relied on the submissions of the assessee filed by letter dated 10.10.2008 which are entirely on new dimension and assessment order does not speak on this issue. The pre-conditions and probabilities of ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Turbines and also commissioning certificate from Tamil Nadu Electricity Board (TNEB). As per letters Wind Turbine Generators are commissioned at Veerasigamani site on 28.09.2007 and come into generation mode within two to three days after trial runs. As per the general practice, the invoice by the seller raised will be after Wind Turbine Generators comes into generation mode. On perusal of the Commissioning certificate issued by TNEB three Wind Turbine Generators are commenced on 28.09.2007 and two Turbine commissioned on 30.09.2007 and also generated three units from 28.09.2007 to 15.10.2007 and two units between 30.09.2007 to 15.10.2007. The Assessing Officer relied on the invoices collected from M/s. Pioneer Wincon Private Limited bearing no.30 to 37 and delivery challans dated 18.09.2007, 20.09.2007 and 22.09.2007 from Pondicherry unit and called for additional information from TNED with regard to date wise generation of electricity and entries made in the EB registers but Superintend Engineer of TEDC, Tirunelveli replied that there is no daily meter reading in the WTGS and first meter reading was placed only on 13.10.2007. The Assessing Officer on verification of invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised only after completion of erection and commissioning of WTGs. The ld. Authorised Representative submitted details alongwith judicial decisions on the ground of usage of machinery for more than 180 days and Commissioner of Income Tax (Appeals) referred at page no.15 to 18 of his order. The ld. Commissioner of Income Tax (Appeals) on perusing the material information and invoices and commissioning certificate and also meter reading and travel distance gave elaborate findings at page no. 18 as under:- In any case, all the above observations or opinions of the Assessing Officer are purely on presumptions and surmises. The documents furnished by the assessee, on the other hand, clearly shows that three of the WTGs are commissioned on 28.09.2007 and the remaining two WTGs are commissioned on 30.09.2007. The documents furnished by the assessee are (i] commissioning certificate from Tamil Nadu Electricity Board (TNEB) and (ii) a confirmation letter from the supplier of the WTGs. The contents of the letter issue by the supplier says that - this is with reference to your WTGs commissioned at Vcerasigamani site on 28/09/2007.After commissioning of the WTGs, it has to come to genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007 and the said submissions are in the nature of fresh evidence which Assessing Officer could not examine and pleaded that the order of the Commissioner of Income Tax (Appeals) to be set aside. 12. Contra, the ld. Authorised Representative relied on the findings of the Commissioner of Income Tax (Appeals) and to substantiated his submissions with commissioning certificates of TNEB at page nos.66 to 70 of paper book and also the bills raised in respect of initial reading and argued that WTG are commissioned before 30.09.2007 and the assessee has rightly claimed 100% depreciation as per law. 13. We heard the rival submissions of both the parties and perused the material on record. The ld. Departmental Representative vehemently argued that the Assessing Officer made a detailed working in respect of allowance of depreciation on WTGs were invoice copies are called for and verified alongwith confirmation of suppliers M/s. Pioneer Wincon Private Limited. The assessee firm based on invoice copies claimed 100% depreciation also certificate of commissioning specifying WTG was commissioned at Veerasigamani site on 28.09.2007 and it shall take two to three days normally for generation m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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