9911796707
TMI Blog2019 (4) TMI 1855X X X X Extracts X X X X X X X X Extracts X X X X ..... y government, Management is of opinion that these project facilities do not create any assets or benefit of enduring nature and assessee/ appellant made expenses for safety barrier pavement marking, traffic signal etc. as per term and agreement of the contract with the NHAI. A.O. disallowed the claim of the appellant on the ground that above said amount was spent in earlier year and not in the year under consideration. In this case, the rate of tax are same as compared to earlier year and there is no loss to the revenue. Delhi High Court in the case of Vishnu Industrial Gases P. Ltd. vs. CIT [ 2008 (5) TMI 636 - DELHI HIGH COURT] which was followed in the case of CIT vs. Nagri Mills [1957 (9) TMI 30 - Bombay High Court] wherein it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of enduring nature to the assessee. Before discussing the assessee's contractual liability, I would like to discuss factual position of expenditure of ₹ 4,83,71,954/-claimed by the assessee. As per the assessee's own submission, the expenditure claimed is revenue in nature. From the ledger account filed by the assessee, It is seen that there is an opening balance of ₹ 4,10,08,609/- and during the year the assessee has incurred expenditure mainly on labour charges of ₹ 73,65,345/-. If the assessee's own submission that this is a revenue expenditure then the assessee ought to have claimed such expenditure in the year in which it incurred. The assessee failed to offer any convincing explanation for not claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At this juncture, it is worthwhile to point out here that in the immediately preceding year the assessee has shown profit before tax at ₹ 65.79 lakh and claimed deduction of ₹ 46,50,756/- u/s. 801A of the Act. Had the expenditure of ₹ 4,10,06,609/- was claimed in the year 2011-12, the net result would be loss in that year and the assessee was not entitled to claimed deduction u/s. 801A of the Act. This clearly shows that the assessee has maintaining its books of account in such a manner that it take undue benefit of construction granted in the Act. Such an unethical practice has no place in the Act. It may further pointed out here that as per the concession Agreement, the assessee has to complete, the construction of cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture was required to be incurred as per the contractual obligation as the agreement entered in to with NHAI. 5. The Ld. A.O. has not considered the fact that the expenditure incurred for project metal barrier which was contractual obligation which was required to be fulfilled by the company as per agreement entered in to with NHAI. As these project facilities are required to be built up on the national highway owned by the government, management was of the opinion that these project facilities do not create any asset or benefits of enduring nature and hence are revenue expenditure and are treated accordingly as and when the project facilities are ready for use. 6. The part of the expenditure of ₹ 4,10,06,609/- on project facilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment or claim of money from NHAI for the said facilities. As these project facilities are required to be built up on the national highway owned by government, Management is of opinion that these project facilities do not create any assets or benefit of enduring nature and assessee/ appellant made expenses of ₹ 4,10,06,609/- for safety barrier pavement marking, traffic signal etc. as per term and agreement of the contract with the NHAI. But ld. A.O. disallowed the claim of the appellant on the ground that above said amount was spent in earlier year and not in the year under consideration. In this case, the rate of tax are same as compared to earlier year and there is no loss to the revenue. 11. In support of its contention, ld. A.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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