9911796707
TMI Blog2019 (3) TMI 1556X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962. Later, the Commissioner, under Section 263, suo motu revised the same and issued some directions, which was considered and additions made by the Assessing Officer ('AO' for brevity). ITA No. 134 of 2012 arises from the order of the Tribunal from the assessment made under Section 143 (3) r/w Section 263. ITA Nos.139 and 243 of 2012 arise from the AYs 2004-05 and 2005-06. ITA No. 192/2012 3. The only issue arising in the appeal from the original AY 2003-04 is the agricultural income disallowed by the AO. The assesseee declared an agricultural income of Rs. 24,98,737/-. However, there was no evidence produced in respect of the yield, sale amount, expenses etc. The AO, hence, allowed the agricultural income only to the extent of Rs. 5,00,000/-. The balance Rs. 19,98,737/- was treated as income from other sources. In First Appeal, the Commissioner of Appeals accepted Rs. 10,00,000/- as agricultural income and the balance as income from other sources. There was a remand made by the Tribunal to the First Appellate Authority. The CIT (Appeals) on remand, by Annexure B order relied on the order of the Settlement Commission which considered a block assessment, the last year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stions of law refer to the aspect of retention amounts being directed to be treated as amounts accrued on the completion of the contract by the AO; as upheld by the Accountant Member, revising the order of the CIT (Appeals). The Judicial Member and the Third Member, however, followed the order of the Tribunal itself in the case of the assessee in ITA No.831/Cochin/2008. Yet another issue which arose was with respect to the work-in-progress and the bills receivable, which we find from the assessment order and the appellate orders, are with respect to specific amounts sought for deduction by the assessee and added on by the AO. The issue is on facts and the same has been remanded by the Accountant Member to the AO. However, the Judicial Member dissented on the question of the bills receivable, since the same has also been decided in ITA No.831/Cochin/2008. The Third Member concurred with the Judicial Member. The remand hence does not survive. The questions of law thus arising in the appeals are re-framed as follows: (i) Whether the retention amounts retained by the awarder under the terms of a contract are to be treated as accrued in the year of completion of the contract and offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. We perfectly agree with the findings of the Accountant Member that 'accrual' and 'receipt' are two independent incidents, and their matching or correspondence in time in a given case, if so occurring, is purely a matter of coincidence, both immaterial and irrelevant for the purpose of determining the fact of accrual, which has to be on its own terms. However, even applying the said principle to the present facts, we do not think that there was any accrual on the completion of contract. The specific terms of the agreement provided that the amounts due to the awardee would be retained after completion for a specific period to ensure that if defects arise in the work executed, the same is rectified with the retained amounts which would also be the responsibility of the awardee to rectify as per the specific terms. Hence, the amounts are not set apart by the assessee for an apprehended defect. By the specific terms of the contract itself, the awarder is entitled to retain the said amounts so as to rectify any defects arising in the period in which as per the terms of the contract the amount is retained. There can be no accrual found on the completion of contract, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso. The second question, on the Tribunal following the Settlement Commissions order, has also been accepted by us and hence that question will also be answered in favour of the assessee and against the Revenue. We also made a reservation in so far as the Revenue being permitted to move the Tribunal, if at all the Settlement Commission's order is declared void, which we reiterate here. 13. In ITA No.8 of 2013 for the AY 2007-2008 from an order in a cross appeal, one other issue arises as to whether on the facts of the case, the Tribunal was correct in allowing loss claimed on account of termination of contract when arbitration proceedings are pending and have not become final. The assessee entered into a contract and also furnished a bank guarantee for satisfactory execution of the contract. The contract was cancelled by the awarder and the bank guarantee was encashed. An arbitration proceeding is pending between the awarder and the awardee. The Revenue claims that till the arbitration proceedings is concluded the assessee cannot claim the amount as business loss. As of now, the assessee does not have the amounts with it and the bank guarantee has been encashed and it is a loss oc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
