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TMI Blog2017 (10) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... not trading liability and it has not been written off. The assessee challenged the addition before Ld. CIT(A). The written submissions of the assessee are reproduced in the appellate order in which the assessee explained that assessee claimed actual expenses incurred and not a case of provision for anticipating or contingent liability. It was submitted that Common Effluent Treatment Plant Scheme (in short "CETPS") are being constructed under the orders and directions of Hon'ble Supreme Court made during hearing of PIL instituted by Shri M.C. Mehta. In total, 15 CETPS are to be constructed in Delhi. Originally, the cost of construction was estimated at Rs. 90 crore by NEERI. Since the ownership of the entire CETPS lies with the CETP Societie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), however, confirmed the addition. His findings in para 7.2 of the appellate order are reproduced as under : "I have considered the submission of the appellant and observation of the Assessing Officer. It is seen that appellant has claimed a loss of Rs. 47,55,50,000/-in respect of the 15 common effluent treatment plant (CETPs) constructed by the appellant in Delhi. These CETPs are constructed under the orders and directions of Hon'ble Supreme Court made during the course of hearing of Public Interest Litigation. The original cost of these CETPs was estimated at Rs. 90,00,00,000/-by NEERI. The ownership of these CETPs lies with the CETP Societies, therefore, 50% of the cost was to be homed by CETP Societies, 25% was to be given as gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receive the actual cost incurred for executing the project. In view of these it cannot be said that the appellant has incurred loss or loss has been crystallized. There is a simply delay in the payment from Delhi Govt, and Societies, there is no denial from Delhi Govt, as well as societies for the claim lodged by the appellant of the payment. Therefore, disallowance of provision of loss was justified and the decision of the Assessing Officer is upheld." 3. The Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that the genuineness of the expenses incurred by assessee have not been disputed. The assessee maintained its accounts on mercantile system. The surplus is expenses. The am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see claimed loss when the amount is shown in the books of account and realised later on. The Ld. D.R. also submitted that assessee has not shown these contract receipts as income. Therefore, corresponding loss cannot be allowed and relied upon the decision of the Hon'ble Bombay High Court in the case of Taparia Tools Ltd., vs. JCIT (2003) 260 ITR 102 (Bom.) in which it was held that "Matching concept of revenue and income should be considered." 6. We have considered the rival contentions. It is not in dispute that CETPS are constructed under the directions of the Hon'ble Supreme Court. The original cost of these CETPS were lesser which have revised later on. The assessee pleaded that since higher amount has been spent on the project as aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot shown these contract receipts as its income, therefore, corresponding loss cannot be allowed. The finding of fact recorded by the Ld. CIT(A) have not been rebutted through any evidence or material on record. In view of these facts, it cannot be said that the assessee has incurred loss or loss has been crystalized in assessment year under appeal. It is simply a case of delayed payment received from Delhi Government and Societies. There is also no denial by the Delhi Government as well as Societies for the claim of excess payment/ loss by the assessee which is also paid in subsequent year as per contention of the assessee. Therefore, disallowance of provision of loss was justified and as such, the findings recorded by the authorities below ..... X X X X Extracts X X X X X X X X Extracts X X X X
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