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TMI Blog2017 (5) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case we find that the assessee has been following system to claim the benefit of TDS amount deducted by the party consistently and no disallowance has been made by the Revenue. Moreover the ld. DR has not brought anything on record anything contrary to the findings of ld. CIT(A). Thus in our considered view there is no defect in the order of ld. CIT(A). Besides the above we also find that the assessee has already shown income corresponding to the TDS of ₹ 51,615.00 in the earlier years which shows that the assessee has already suffered the burden of income tax in the earlier years without claiming the benefit of TDS. Indeed in this case the assessee has borne the burden of the tax out of his own fund. Moreover if the party has not deducted the TDS in the relevant year, there is no fault of the assessee. There is also no loss to the Revenue. Therefore we find no infirmity in the order of the Ld. CIT(A). Accordingly, we uphold the same. - Decided against revenue. Disallowance of additional depreciation u/s. 32(1)(iia) - AO disallowed the claim as the assessee is not engaged in any manufacturing activities - Held that:- Instant issue is already covered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdictional High Court in its order dated 17.04.2008. However, Hon'ble jurisdictional High Court also directed the HSCL to make the payment of interest forRs. 10.58 crores on account of delayed payment of the aforesaid amount. The impugned interest was pertaining to the period beginning from 28.11.1998 to 31.03.2008. The assessee has offered the principal amount received during the year of ₹ 7.78 crores to tax. However, the assessee claimed that impugned interest pertains to the period beginning from 28.11.1998 to 31.03.2008 and therefore the same is not taxable in the year under consideration. 3.1 The assessee also submitted that the provisions of Sec. 145A(b) of the Act are applicable from the assessment year 2010-11 and therefore the same cannot be taxed in the current year. Thus the impugned interest shall be taxable in the years to which it pertains. The Assessee also relied in support of its Cotentin in the Circular No. 5/2010 [F.142/13/2010-SO (TPL)] dated 03.06.2010. However, the AO observed that the impugned interest income was crystallized in the year under consideration by the order of Hon'ble jurisdictional High Court and therefore there was no possibili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 to 31.03.2008, no part of such interest accrued during the assessment year under appeal, therefore, no part of such income is assessable as income of the assessment year 2009-10. As regards amended section 145A it is observed that the same has been amended by the Finance Act, 2009 with effect from 01.04.2010 wherein in subclause (b) this has been inserted as under: Interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received. CBDT has issued Circular No.05/2010 dated 3rd June, 2010, wherein Para 46 it has in Para 46.4 clarified: This amendment has been made applicable with effect from 1st April, 2010, and will accordingly apply in relation to assessment year 2010-11 and subsequent assessment years Following the above referred to judgements as well as the amendment of Sec. 145A and the CBDT s Circular, it is amply clear that the interest on delayed payment of Arbitration Award amount cannot be assessed to income-tax in one lump-sum in the year under appeal in which the same was received, rather it is to be assessed in the respective years in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us Ld.DR submitted that in the instant case the impugned interest amount was crystallized in the year under consideration and therefore the same should be taxable in the year under consideration. It was also submitted that assessee for the earlier assessment years which was re-opened by the Revenue for taxing interest income has taken a stand that the same should be taxable in the AY 2009-10 as it was crystallized in that year. He further submitted that assessee has taken different stands in the earlier years with the sole purpose of escaping the assessment of interest income from tax. He in support of his contention has filed the additional ground of appeal before Ld. CIT(A) for AY 2010-1 which is placed on record. He in support of his claim also relied on the judgment of Hon'ble Delhi High Court in the case of Paragon Constructions (I) (P) Vs. CIT (2004) reported in 274 ITR 413 (Del). Ld. DR further also relied in the judgment of Hon'ble Supreme Court in the case of CIT vs. Hindustan Housing Land Development Trust Ltd. (1986) 161 ITR 524 (SC) and vehemently relied on the order of AO. On the other hand, Ld. AR before us filed paper book comprising pages from 1 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Income-tax Act provide that income chargeable under the head Profits and gains of business or profession or Income from other sources , shall be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. further, the Hon'ble Supreme Court in the case of Rama Bai v. CIT (181 ITR 400) has held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrual basis. This has caused undue hardship to the taxpayers. 46.2 With a view to mitigate the hardship, section 145A is amended to provide that the interest received by an assessee on compensation or enhanced compensation shall be deemed to be his income for the year in which it was received, irrespective of the method of accounting followed by the assessee. 46.3 Further, clause (viii) is inserted in the sub-section (2) of the section 56 so as to provide that income by way of interest received on compensation or n enhanced compensation referred to in clause (b) of section 145A shall be assessed as income from other sources in the ear in which it is received. Thus, from the above Circular which is binding on the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermining the tax liability of assessee. 10. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that it has received mobilization advance of ₹ 4 crores from TISCO after the deduction of TDS for ₹ 9,06,400/-. Thereafter the aforesaid advance was adjusted against the bills raised by assessee to TISCO on the settlement of the said bills without TDS deduction by TISCO. Therefore there is no question of claiming TDS amount twice. The assessee in support of its claim has reconciled the TDS amount with the gross receipt vis- -vis Form No. 26AS. The assessee also enclosed Auditor s certificate in support of its contention. The Ld. CIT(A) after considering the submission of assessee granted relief to assessee by observing as under:- The A/R has in his submissions explained that in all the earlier years, on similar facts, TDS on Mobilization Advance had always been allowed, therefore, the AO is directed to consider the claim of the assessee in light of the past history of the case and allow credit of TDS on Mobilization Advance as per law as per the method been consistently followed from year to year. Therefore, this ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) erred in confirming the order of Assessing Officer by sustaining the disallowance for the amount of additional depreciation for ₹ 3,25,63,383/- u/s. 32(1)(iia) of the Act. 16. During the course of assessment proceedings, AO observed that assessee claimed additional depreciation on certain machineries vide letter dated 19.12.2011 without filing the revised return of income. However the AO disregarded the plea of assessee by observing that assessee is not engaged in any manufacturing activities therefore, assessee is not entitled for additional depreciation. 17. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who confirmed the order of AO by observing as under:- During the appellate proceedings the assessee only claimed that it was involved in production of an article or a thing. The assessee is, prima facie, a contractor, and it has not brought anything on record to even suggest, leave aside prove, that it was involved in production of an article or a thing. For the reasons stated above, I find that assessee s claim of additional depreciation has rightly been disallowed by the AO. Hence, the disallowance of ₹ 3,25,63,383/- is confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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