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TMI Blog2023 (4) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... considered opinion that it would be in the interest of justice, to direct the AO to consider the claim of the assessee with reference to the material on record and also the material if any, filed by the assessee. Writing off of the work in progress - Assessee is now claiming the written off expenses which were already debited to the work in progress account without first offering such amount as an income and without any proof of incurring the expenses that were debited to the work in progress account in the earlier assessment years and without any proof of claim of such RA bills and the reasons for their rejection by the client. It is therefore now relevant to consider whether the expenses that were debited to the work in progress acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i migrants. They have filed their return of income for the assessment year 2014-15 on 29/10/2014 declaring a loss of Rs. 5,61,89,350/-. 3. During the course of assessment proceedings, learned Assessing Officer found that the assessee has given certain works on subcontract basis to the tune of Rs. 3,89,44,284/-. From the details furnished by the assessee, learned Assessing Officer found that in respect of the claim of the assessee Rs. 4,03,06,38,644/- towards the subcontract work given to M/s Rithwik projects Pvt. Ltd, confirmation was only Rs. 4,02,66,45,570/- leaving one s of confirmation in respect of Rs. 39,93,074/-. Likewise in respect of the subcontract expenses in respect of Ambe Constructions and Minerals to the tune of Rs. 21,61, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot maintain an appeal on that score. Learned CIT(A), however, examined the record and on merits found that the assessee failed to prove the genuineness of the subcontract expenses with supporting material, and therefore there are no reasons to interfere with the addition of Rs. 61,54,263/-. 6. In respect of the disallowance of the writing off of the work in progress, learned CIT(A) found that there is no material produced by the assessee to substantiate such a claim. Secondly, according to the learned CIT(A), there is no specific provision of section under which the assessee is eligible to claim work in progress as business expenses and the writing off of such work in progress as a bad debt under section 36(1)(vii) of the Act. Learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. By placing reliance on the decisions reported of the Hon'ble Apex Court in Himalayan Co-operative Group Housing Society Vs. Balvant Singh (2015) 7 SCC 373, Bharat Heavy Electricals Ltd., Vs. Mahendra Prasad Jakhmola Civil Appeal No. 1799 1800 of 2019 learned AR submitted that the concession made by the counsel will not bind the assessee. He accordingly submitted that when the assessee furnished the requisite information as could be found from the assessment order itself, the learned Assessing Officer is duty bound to consider such material to base the addition instead of depending upon the word of the learned AR. 9. In Himalayan Co-operative Group Housing Society (supra), the Hon'ble Apex Court observed that where doubt exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an admitted fact that the assessee debited certain expenses to the account of work in progress in the earlier assessment years a part of which they want to write off during the current year. According to the assessee for execution of Government contracts, till 31/03/2003, they have incurred an expenditure of Rs. 10,29,43,451/- which they debited to the account of work in progress, they have submitted the cumulative running account bill (RA Bill) No. 47 for Rs. 11,50,55,910/- dated 30/01/2014, but the Government certified the earlier RA Bill No. 46, 47 and allied works to the tune of Rs. 6,66,63,352/- leaving the balance of Rs. 4,83,92,442/- out of which, the assessee writes off Rs. 4.76 crores as irrecoverable. 13. Learned Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss account in the earlier assessment years and without any proof of claim of such RA bills and the reasons for their rejection by the client. It is therefore now relevant to consider whether the expenses that were debited to the work in progress account were for the business of the assessee in executing the contract, and that the same were not passed for the reasons other than being bogus expenses. 16. We, therefore, direct the learned Assessing Officer to examine the contract document with reference to the work in respect of which the expenses debited to the work in progress in the earlier assessment years and to examine the reasons for the client not certifying the same. If the assessee incurred the expenses for the purpose of business ..... X X X X Extracts X X X X X X X X Extracts X X X X
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