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TMI Blog2018 (4) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case, then he was not justified in disturbing the book results of the assessee. The FAA has given categorical finding of fact that the books of assessee were maintained as per the mandate of AS-7.- Decided against revenue Addition of outstanding creditors - survey action u/s 133 - one of the Directors offered 30, 00, 000/- (approximately)for taxation on account of old creditors - Held that:- The addition should be based on some evidence. In the case under consideration, the assessee had clearly mentioned the additional income offered was based on some estimate. During the survey proceedings, the Director of the company could not refer to the regular books of accounts. After reconciling the financials the exact amount of the disputed creditors was shown in the return of income. Therefore, in our opinion, the FAA was not justified in confirming the addition of 2. 78 lakhs especially when the statements recorded during the survey proceedings talked of estimated income only. - Decided in assessee’s favour. Disallowance of interest paid to the custom authorities - Held that:- We find that the identical issue i. e. use of machinery outside the state of Maharashtra and levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of National Heavy Engineering Co-Operative Ltd., Vs DCIT 105 ITD 48 that amount of retention money did not accrue to assessee as income till the performance of the contract is fulfilled and accepted by contractee. In view of above decision, we do not find any infirmity in the order of Ld. CIT(A) and hence we confirm order of Ld. CIT(A) by rejecting the ground of appeal taken by department. " Respectfully following the above, ground no. 2, is decided against the AO. 3. Next ground of appeal is about unfinished contracts. During the assessment proceedings, the AO found that the assessee had credited an amount of ₹ 38. 77 crores in its P&L account, that it had added opening work-in-progress of ₹ 2. 40 crores and had reduced the closing WIP of ₹ 1. 65 crores, that it had estimated the stage of completion of different projects based on direct cost incurred on projects till 31/3/2008 and the total cost of project, that for that purpose it had reduced profit margin from the total contract value, that it had taken profit margin @ 8% with respect to certain contracts and that the rate of nil with respect to other contracts. After analysing the P&L account for the earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that while rejecting the method applied by the assessee, the AO had not mentioned the reasons as to why the method could not be applied for the year under consideration. It is true that principle of res judicata does not apply to the Incometax proceedings, but it is also equally true that rule of consistency applies to Income-tax proceed - ings. Hon'ble Bombay High Court in the case of Gopal Purohit(336ITR287)has held that that there should be uniformity in treatment and when facts and circumstances for different years were identical particularly in the case of the same assessee. In the case of Galileo Nederland BV, (367ITR319), the Hon'ble Delhi High Court has held as under: "Decision on an issue or question taken in earlier years though not binding should be followed and not ignored unless there are good and sufficient reasons to take a different view. Said principle is based upon rules of certainty and that a decision taken after due application of mind should be followed consistently as this lead to certainty, unless there are valid and good reasons for deviating and not accepting earlier decision. " The Hon'ble Bombay High Court in the matter of Aroni Commercials Ltd. (36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the appellate proceedings before the FAA, the assessee made detailed submissions. Considering the available material, he held that one of the Directors of the company had offered ₹ 30, 00, 000/- for taxation, that AO was justified in making the addition of ₹ 2. 78 lakhs. He referred to the cases of Hotel Samrat[3 ITR 353] and K. C. K Deboo [313 ITR 186] and dismissed the ground of appeal, raised by the assessee. 5.2. Before us, the AR submitted that during the course of survey proceedings the assessee had stated that creditors approximately of ₹ 30, 00, 000/- were appearing in the books of accounts wherein the amount was due, that the figure of ₹ 30, 00, 000/- was not based on books of accounts, that the Director had stated that he would be submitting exact amount after consulting the regular books of accounts, that at the time of filing of return and age analysis of the creditors appearing in the Balance Sheet as on 31. 03. 2007 was carried out, that exact amount of the creditors in dispute was accordingly offered to tax. He referred to the statement recorded during the course of survey and stated that amount surrendered during the survey proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities revealed that same were used for construction sites by outside Mumbai, that the Custom Authorities seized the machines for violating the exemption conditions, that the assessees had approached the Settlement Commission while accepting the duty demand of ₹ 3. 21 crores, that it had deposited ₹ 3. 21 crores together with interest @13%. He referred to the Explanations to Section 37(1) and held that the assessee had used the machinery for the purpose which was not committed by law, that it was violation of one of the conclusions imposed on it for acquiring machines. We refer to the case of Prakash Cotton Mills (201 ITR 684) and Meddi Venkatram & Company Pvt. Ltd., (229 ITR 534) and confirmed the order of AO. 6.2. Before us, the AR submitted the assessee had approached the Settlement Commission of Customs and Central Excise, that the commission had deleted the penalty, that interest was levied for the violation of the conditions for the imported machinery, that the one of the Group entities have approached to the Hon'ble High Court on the same issue, that the Hon'ble Bombay High Court had held that interest paid by the assessee was of compensatory in nature, that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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