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09-04-2019, Thyssenkrupp Industrial, Section 145(2), 234B, Tribunal Mumbai

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2 months 1 week ago #9090 by amit
Section - 145(2), 234B, 154
Order Date - 09-04-2019
Favouring - Partly
Court - Tribunal Mumbai
Appellant - Thyssenkrupp Industrial Solutions (India) Private Limited
Respondent - ACIT
Justice - SAKTIJIT DEY, JM & MANOJ KUMAR AGGARWAL, AM
Citation - 419Taxpundit125
Appeal No. - I.T.A. No.1691/Mum/2012
Asstt. Year - 2006-07

Order

PER : Manoj Kumar Aggarwal

1. Aforesaid appeal by assessee for Assessment Year [AY] 2006- 07 contest the order of the Ld. Commissioner of Income-Tax (Appeals)-22[CIT(A)], Mumbai, Appeal No. CIT(A)-22/Addl.CIT10(3)/IT.612/09-10dated 16/12/2011on following grounds of appeal: -

1. The learned Commissioner of Income Tax (Appeals) erred in disallowing provision for costs incurred on completed contracts amounting to Rs.9,49,35,320/-

2. The learned Commissioner of Income Tax (Appeals) erred in not considering that the provisions were made as per the regular method of accounting followed by the appellant.

3. The learned Commissioner of Income tax (Appea s) failed to consider the detailed facts submitted in case of provision made on Kanoria Chemicals & Industries Ltd. Contract, including for liquidated damages payable.

4. The learned Commissioner of Income Tax (Appeals) erred in holding that liquidated damages for delay in completion we e optional.

5. The learned Commissioner of Income Tax (Appeals) erred in disallowing provisions for cost overruns on incomplete contracts-Rs.1,92,34,146/-

6. The learned Commissioner of Income tax (Appeals) erred in not deleting provisions for costs on completed contracts amounting to Rs.14,66,21,872/- which has been disallowed in earlier assessment years and were utilized/written back in the current year.

7. The learned Commissioner of Income Tax (Appeals) erred in confirming taxation of an amount of Rs.28,84,90,428/-, as income, in respect of contracts accounted under “Percentage of Completion” (POC) Method.

8. The learned Commissioner of Income Tax (Appeals) erred in not considering that the appellant was following a regular method of accounting, sanctified by Accounting Standards.

9. The learned Commissioner of Income Tax (Appeals) failed to consider that the addition made o Rs.28,84,90,428/- has resulted in taxing gross receipts, without allowing deduction for expenditure required to earn such receipts.

10. Without prejudice to ground Nos. 7 to 9 above, the Assessing Officer erred in not allowing deduction (following his own method) where the sale proceeds recognized by the Appellant were higher than the billings done during the year.

11. The appellant submits the finding of the learned Commissioner of Income Tax (Appeals) that the appellant failed to produce evidence that monies under contract were received in advance, is with due respect, a perverse finding.

12. The learned Commissioner of Income Tax (Appeals) erred in taxing the excess of progress billings over inventories, amounting to Rs.3,96,15,600/- as income, in respect of contracts accounted under the “Completed Contract Method” and which were incomplete as on 31st March, 2006.

13. The learned Commissioner of Income Tax (Appeals) erred in rejecting the regular method of accounting followed by the appellant and accepted by the department in the past.

14. The learned Commissioner of Income Tax (Appeals) erred in disallowing software maintenance expenses amounting to Rs.1,11,10,064/- on the ground that the same was capital expenditure.

15. The learned Commissioner of Income Tax (Appeals) erred in not granting credit in respect of TDS o Rs.3,82,678/- withdrawn in Assessment Year 2005-06, and pertaining to contracts completed in Assessment Year 2006- 2007.

16. The learned Commissioner of Income Tax (Appeals) erred in not granting depreciation @60% on opening balance of software expenses capitalized in earlier assessment years amounting to Rs.44,77,753/-.

17. The learned Commissioner of Income Tax (Appeals) erred in not excluding the amount of Rs.30,000/- being Short Term Capital Gain, taxed twice by the Assessing Officer

18. The learned Commissioner of Income Tax (Appeals) erred in confirming levy of interest u/s 234B.

The assessment for impugned AY was framed by Ld. Additional Commissioner of Income Tax, Range-10(3), Mumbai [AO] in scrutiny assessment u/s 143(3) of the Income Tax Act, 1961 on 23/12/2009 wherein the income of the assessee was assessed at Rs.65.80 Crores after certain additions / disallowances as against returned income of Rs.20.46 Crores e-filed by the assessee on 31/10/2006. During impugned AY, the assessee being resident corporate entity was stated to be engaged in supply of processors, designing, construction and commissioning of complete plants for chemical fertilizers, petrochemical, refining& other related industries.

2.1 The name of the assessee company has undergone change from Uhde India Private Limited to Thyssenkrupp Industrial Solutions (India) Private Limited videcertificate of incorporation pursuant to change of name issued by Registrar of Companies, Mumbai on 07/10/2014. Incorporating the same, revised Form No. 36 has been filed on 03/11/2017. Finding the same in order, we proceed to dispose-off the appeal as per the arguments of respective representatives.

2.2 For ease of reference, the grounds of appeal could be grouped &tabulated in the following manner: -

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