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TMI Blog2021 (9) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... IZ and Sainj in proportion to the amounts set up by them before end of November, 2006 - liability of 5 crores is not contingent in nature and was liability for the year under consideration and the assessee has rightly the same as revenue expenditure in view of the said agreement - No infirmity in the order of the CIT(A) in deleting the addition of ₹ 5 crores made by the AO u/s 40(a)(ia) treating it as contingent in nature. Accordingly, the ground raised by the revenue on this issue is dismissed. Addition of damages for idling of their facilities and loss of business - HELD THAT:- As the assessee had foregone the claim of damages regarding idling as granted by the arbitrator vide the final agreement letter dated 11/05/2010 with HPCL. Based on this letter, the CIT(A) deleted the addition made by the AO treating the awarded claim of damages regarding idling as granted by the arbitrator, as income of the assessee, without taking into consideration the documentary evidence. Therefore, we find no reason to interfere with the order of the CIT(A) on this issue and upholding the same, we dismiss the ground raised by the revenue on this issue. - ITA Nos. 2402 & 2403/H/2018 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted on appellant's premises and consequent to the survey the appellant's case was reopened by issue of notice u/s. 148 of the Act. The case was taken up for scrutiny and the reassessment u/s 143(3)/147 was completed by making the following additions /disallowances of ₹ 2,46,00,000/- as unreported receipts from Wardha Power Co., difference in gross receipts of Sitaram Power of ₹ 1,21,604/ - and disallowance u/s. 40(a)(ia) of ₹ 5 crores. 4. When the assessee preferred an appeal before the CIT(A), the CIT(A) deleted the addition/disallowance of ₹ 2,46,00,000/- made by the AO towards unreported receipts from Wardha Power Co., and the addition of ₹ 5,00,00,000 made u/s 40(a)(ia) of the Act. 5. Aggrieved by the order of CIT(A), the revenue is in appeal before the ITAT. 6. As regards the addition of ₹ 2,46,00,000/- made by the AO towards unreported receipts from Wardha Power Co., the AO observed that the appellant had contract receipts of ₹ 2,46,00,000/- from M/s. Vardha Power Company and the same was not shown as income for the year under consideration. The appellant stated that the same was part of advance money received f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etely reorganized and the board took a decision not to undertake any construction projects and restrict business module to storage of oil and gas alone. He further submitted that on account of restructure, the assessee company requested M/s VIZ Infra Consultants Pvt. Ltd. (VIZ) to take over the responsibility and liability of the execution of the contemplated work and they have agreed to take up the work and accordingly, the assessee assigned entire responsibility to complete the work and entire outstanding balance from Wardha was transferred to VIZ during the previous year relevant to AY 2008-09. In this connection, the ld. AR invited the Bench attention to the following documents, which were filed before the revenue authorities to demonstrate that the assessee transferred the work and outstanding balance to M/s VIZ: Sl.No. Description Pages 1. Tripartite agreement dated 26/09/2005 between assessee, Viz Projects Pvt Ltd and Saini Hydro Power Pvt. Ltd. 1-3 2 Settlement agreement dated 26/09/2007 between the assessee, Viz P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amounts set up by VIZ and Sainj respectively. 13.1 The CIT(A) observed that the appellant passed an entry on 30.09.2006 regarding the provision of ₹ 5,00,00,000/ - as service fee after one year of entering into the agreement. The parties were supposed to arrange the fund to the tune of ₹ 43,60,00,000/- combined towards payment of OTS amount as per the original agreement. The appellant was supposed to repay a sum of ₹ 50,00,00,000/- as upset amount and ₹ 5,00,00,000/- towards service fee and interest from November, 2006. Later on the quantum of consideration were reduced to the extent of sums repaid by EIPL. As on 30.08.2007, there was liability of ₹ 35,60,31,001/- plus interest. The supplementary agreement dated 26.09.2007 has already been reproduced in the context of mobilization advance. Referring to the original agreement dated 26/09/2005, which was reproduced by the CIT(A) in his order at pages 27 to 30, observed as under: From the above agreement it is clear that the appellant needs to pay ₹ 50 crores and a service fee of 10% that is ₹ 5 crores in lieu of their outstanding debt. It is also important to note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not contingent in nature and was liability for the year under consideration and the assessee has rightly the same as revenue expenditure in view of the said agreement. Therefore, we do not find any infirmity in the order of the CIT(A) in deleting the addition of ₹ 5 crores made by the AO u/s 40(a)(ia) treating it as contingent in nature. Accordingly, the ground raised by the revenue on this issue is dismissed. ITA No. 2403/Hyd/2018 for AY 2010-11 16. In this appeal, the revenue has raised the following grounds of appeal: (1) The ld.CIT(A) erred in deleting the addition of ₹ 2,04,07,342/ - without appreciating the fact that as per arbitration order dated 03.10.2010, the idling charges of ₹ 2,04,07,342/ - for not utlising the facilities during the period April 2000 to September 2003 were awarded to the assessee. (2) The ld.CIT(A) erred in relying on settlement agreement dated 26.09.2007 which is prior to the arbitration order dated 03.10.2010. 3) The ld.CIT(A) has jailed to consider that in the settlement agreement, the amount in respect of idling charges of ₹ 2,04,07,342/ - is not included. This amount has been claimed by asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging of this matter would have resulted in locking of the realizable fund which was promised and assigned by the appellant to VIZ and therefore a commercial decision was taken by the appellant. The appellant in the submission has made very categorical statement that it has never received the quantum granted by the arbitrator and further it has itself waived the same off as part of commercial expediency and consideration. The appellant has also furnished the necessary evidences in this regard and also the same were furnished before the AO. In view of the above facts, the idling charges so granted by the arbitrator and later on waived by the appellant is not the income of the appellant for the year under consideration and therefore the addition of ₹ 2,04,07,342/_ is hereby deleted. 20. Before us, the ld. DR relied on the order of the AO while the ld. AR of the assessee relied on the order of the CIT(A). 21 After considering the rival submissions and perusing the material on record as well as the order of the authorities below, it is an undisputed fact that the assessee had foregone the claim of damages regarding idling as granted by the arbitrator vide ..... 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