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TMI Blog2025 (2) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... e on completion of the work and recover the amount. Therefore, till such time, the amount will be retained as business asset in the books of the assessee and the said amount actually cannot be considered as a capital work-in-progress but represents the work in progress of the assessee or deferred revenue expenditure of the assessee and would be debited to the P & L A/c proportionately during the period of operation of the toll gate. AO's presumption that it has to be treated as capital work-in-progress is not correct. We find force in the submissions of the assessee to the effect that the matter in issue in the instant appeal is squarely covered by the aforesaid CBDT Circular dated 23.04.2014. Assessee has shown only the matching entries in the P & L A/c and not derived any income for the impugned assessment year. As rightly noted by the CIT(A), when there is no income accrued in the hands of the assessee, then there is no question of estimation of income @ 8% out of total gross receipts in the hands of assessee does not arise. Addition u/s 40(a)(ia) - addition being 30% of expenses for non-depositing of TDS before due date - CIT(A) noted that the assessee has capitalized all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority of India [in short "NHAI"]. 2.1. For the impugned assessment year 2017-2018, it filed it's return of income on 29.10.2017 declaring NIL income and claimed refund of Rs. 3,70,44,341/- and further filed revised return of income on 10.07.2018 declaring Rs. NIL income by claiming refund of Rs. 3,67,35,480/-. The case of the assessee was selected for scrutiny under CASS. The Assessing Officer issued statutory notices u/sec.143(2) and 142(1) to the assessee calling the assessee to furnish various details as per CASS etc., The Authorised Representative of the Assessee appeared before the Assessing Officer from time to time and filed the requisite details. The Assessing Officer also issued show cause notice dated 28.11.2019. In response thereto, the assessee furnished his Escrow Bank Account statement and Non- Escrow Bank Statements both of Axis Bank on 03.12.2019. The Assessing Officer after examining the documents placed on record, noted that the assessee has not produced the books of accounts for the impugned assessment year 2017- 2018 nor submitted that the works have been executed as per the expenses debited to the P & L A/c for the assessment year 2017-2018. The learned Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome shown by the assessee to the tune of Rs. 183.67 Cr. i.e. grants received from NHAI 179.90 Cr. and Utility Shifting Work Rs. 3.76 Cr. 5. Appellant prays for other grounds/grounds that may be urged at the time of hearing. 4. The Learned DR on the other hand, vehemently relied on the order of the Assessing Officer. He submitted that the Assessing Officer estimated the income of the assessee @ 8% of the gross receipts which is common in line of construction activities and based on judicial precedents and principles. He submitted that during the course of assessment proceedings the assessee did not produce books of accounts and in absence of documentary evidence to verify bills/vouchers and TDS etc., and the variations between the 26AS and P & L A/c gross receipts, the impugned estimation @ 8% made by the Assessing Officer is justified and pleaded that the order of the Assessing Officer be confirmed. 5. The Learned Counsel for the Assessee, on the other hand, strongly relied on the order of the learned CIT(A). He submitted that the Assessing Officer made the impugned estimation @ 8% on account of variations in 26AS and P & L A/c. He submitted that the entire receipt shown in P & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to balance the expenditure incurred on on-going road construction work and, therefore, noted that when there is no income earned, the question of estimating the income @ 8% does not arise. He, accordingly, deleted the impugned addition of Rs. 32,79,23,250/- made by the Assessing Officer. We find there is a force in the submissions of the Learned Counsel for the Assessee to the effect that the CBDT vide it's Circular No.09/2014 dated 23.04.2014 made it crystal clear that where an assessee claimed any deduction out of initial cost of development of infrastructure facility of roads/highways under BOT projects in earlier years, the total deduction so claimed for the assessment years prior to the assessment year under consideration may be deducted from the initial cost of infrastructure facility of roads/highways and the cost 'so reduced' be amortized equally over the remaining period of toll concessionaire agreement and that the impugned circular applicable only to those infrastructure projects for development of road/highways on BOT basis where ownership is not vested with the assessee under the concessionaire agreement. We note that the assessee is not creating any capital asset of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43B of the Act. 9. Same order to follow for the impugned assessment year 2018-2019 with respect to the estimation of income @ 8% on the gross receipts. The order of the learned CIT(A) in deleting the addition on this ground is confirmed. The grounds raised by the Revenue on this issue is dismissed. 10. Similarly, the Assessing Officer made an addition of Rs. 38,41,46,752/- being 30% of expenses for non-depositing of TDS before due date. The learned CIT(A) noted that the assessee has capitalized all the expenses incurred in construction of high-way and no expenses are claimed during the impugned assessment year 2018-2019 and, therefore, deleted the impugned addition made in the hands of the assessee u/sec.40(a)(ia) of the Act. We find no infirmity in the order of the learned CIT(A) as the assessee has not claimed the revenue expenditure and it is settled position of law that when no expenses debited to the P & L A/c and no deduction claimed by the assessee under the head profits and gains of business or profession, then, no disallowance can be made by invoking the provisions of sec.40(a)(ia) of the Act. We, accordingly, find no infirmity in the order of the learned CIT(A) for and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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