CHANDIO RAM, Kota V. ACIT, Kota

ITA 329/JPR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5353 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 01-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P R MEENA JCIT DHK
• Assessee Lawyers: M IQBAL; SIDDARTHA RANKA
• Keywords: Opportunity of being heard; Question of law

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 329/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2004-05. SHRI CHANDI RAM, PROP.- M/S CHANDI & COMPANY, A-20, VALLABH NAGAR, KOTA. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ABIPR 6234 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SIDDARTHA RANKA & SHRI M.IQBAL (ADV) JKTLO DH VKSJ LS@ REVENUE BY : SHRI P.R. MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04/02/2016. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 18/03/2016. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28/01/2015 OF THE LEARNED C.I.T., KOTA FOR A.Y. 2004 -05. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED APPELLATE AUTHORITY GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS. 465,212/- BY HOLDING THAT 2 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT THE ENTIRE AMOUNT OF ARBITRATION AWARD AND INTEREST RECEIVED THEREON IS TO BE TAXED AS INCOME DURING TH E YEAR UNDER CONSIDERATION AND NOT THE NET INCOME OF RS. 53,561/- BEING THE PROFIT RATE @ 8.57% RESULTING OUT OF IT WHICH WAS ALREADY OFFERED TO TAXATION BY THE ASSES SEE APPELLANT. 1.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED LOWER AUTHORITIES GROSSLY ERRED IN SUBJE CTING TO TAX THE CONTRACT WORKS AMOUNTING TO RS. 136,983/ - AS TAXABLE INCOME DURING THE YEAR UNDER CONSIDERATION WHEN SUCH AMOUNT RELATED TO ASSESSMENT YEAR 1993- 1994 OR 2001-2002 AND NOT DURING THE YEAR UNDER CONSIDERATION PARTICULARLY WHEN THE ASSESSEE IS FOLL OWING MERCANTILE SYSTEM OF ACCOUNTING. 1.2 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED LOWER AUTHORITIES GROSSLY ERRED IN SUBJE CTING TO TAX THE ENTIRE INTEREST COMPONENT OF ARBITRATION AWARD AS TAXABLE RECEIPT DURING THE YEAR UNDER CONSIDERATION PARTICULARLY WHEN THE ASSESSEE IS FOLL OWING MERCANTILE SYSTEM OF ACCOUNTING AND ONLY RELEVANT PORTION OF INTEREST ACCRUED DURING THE YEAR AMOUNTI NG TO RS. 59,269/- COULD HAVE BEEN SUBJECTED TO TAX. 1.3 THAT TAXING THE ENTIRE RECEIPT RECEIVED ON THE B ASIS OF ARBITRATION AWARD DURING THE YEAR UNDER CONSIDERATIO N IS UNJUST, ILLEGAL & BAD IN LAW, BY NO STRETCH OF IMAGI NATION ENTIRE RECEIPTS CAN BE SAID TO RESULT AS INCOME. 1.4 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED LOWER AUTHORITY MISINTERPRETED THE DIREC TION OF THE HONBLE ITAT BY TREATING THE ENTIRE RECEIPT AS INCOME & NOT ALLOWING THE EXPENSES WHEN IN A CASE OF 3 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT CONTRACT; EXPENSES INCURRED SHOULD HAVE BEEN ALLOWED & ONLY NET INCOME OUGHT TO HAVE BEEN TAXED. 1.5 THAT THE ID. LOWER AUTHORITIES IS UNJUSTIFIED IN OBSERVING THAT THE ASSESSEE HAS ALREADY DEBITED THE ENTIRE EXPENSES IN THE P&L A/C FOR THE A.Y. 1993-94 AND SU CH AN OBSERVATION IS UNJUSTIFIED WITHOUT MATERIAL AND WITHOUT EVIDENCE. THE IMPUGNED ADDITION OF RS. 465,212/- BEING UNJUSTIFIED, CONTRARY TO THE MATERI AL ON RECORD, DESERVES DELETION. 2. THE ASSESSEE IS A CIVIL CONTRACTOR. RETURN FOR YE AR UNDER CONSIDERATION WAS FILED ON 01/11/2004 DECLARING TOTA L INCOME OF RS, 10,60,745/-. IN THIS CASE, SCRUTINY ASSESSMENT WAS M ADE BY THE ASSESSING OFFICER AND INCOME WAS ASSESSED IN ORIGINAL SCRUTINY ASSESSMENT AT RS. 60,72,122/-. THE ASSESSEE CHALLENGED THE ADDITION B EFORE THE HONBLE ITAT, WHO HAD GIVEN FOLLOWING FINDINGS:- WE REMAND THE MATTER TO THE FILE OF THE A.O. TO VER IFY AS TO WHETHER THE EXPENSES INCURRED BY THE ASSESSEE RELATI NG TO THE AWARD RELATED TO ASSESSMENT YEAR 1993-94 RECEIVED DU RING THE YEAR HAD ALREADY BEEN CLAIMED IN THE ASSESSMENT YEAR 199 3-94 OR NOT AND IF THE A.O. FINDS THAT THE EXPENSES RELATING TO ABOVE RECEIPT WERE NOT CLAIMED DURING THE ASSESSMENT YEAR 1993-94, THEN IN SUCH A SITUATION HE IS DIRECTED TO DELETE THE ADDITION O F RS. 5,71,422/-. AS PER DIRECTION OF THE HONBLE ITAT, THE LD ASSESSI NG OFFICER AGAIN COMPLETED THE SET ASIDE PROCEEDINGS AND PROVIDED A REASONABLE 4 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WHICH WAS AVAILED BY HIM. THE ASSESSEES REPLY HAS BEEN REPRODUCED BY THE ASSESSI NG OFFICER ON PAGE NO. 2 OF THE ASSESSMENT ORDER. AFTER CONSIDERING TH E ASSESSEES REPLY, THE LD ASSESSING OFFICER HAS HELD THAT THE ASSESSEE HAD FAILED TO DISCHARGE HIS ONUS OF PRODUCING EVIDENCE IN HIS OWN CASE. IF THE A SSESSEE CLAIMED THAT THE EXPENSES RELATING TO THE AWARDS WERE NOT CLAIMED IN THE A.Y. 1993-94 THEN HE SHOULD PRODUCE SEPARATE ACCOUNT OF SUCH EXP ENSES NOT CLAIMED. FURTHER THE ASSESSEE HAD CONTESTED ARBITRATION MATT ER TILL AUGUST, 2003. HENCE HE SHOULD HAVE BEEN IN POSSESSION OF THE RELE VANT DOCUMENTS AND ACCOUNTS. THUS, THE ASSESSEE HAD FAILED TO IDENTIFY THE SPECIFIC EXPENSES RELATED THIS AWARD. IN ABSENCE OF ANY EVIDENCE, IT I S CONCLUDED THAT THE ASSESSEE HAD ALREADY DEBITED THE ENTIRE EXPENSES RE LATED TO RECEIPTS OF RS. 6,24,983/- IN THE P&L ACCOUNT FOR A.Y. 1993-94 ITSE LF. HENCE, IN THE RELEVANT A.Y. 2004-05, THE ASSESSEE CANNOT TAKE BEN EFIT OF SUCH EXPENSES BY ADOPTING THE PROFIT RATE ON THESE RECEIPTS. IT H AS BEEN HELD THAT CONTRACT RECEIPTS OF RS. 6,24,983/- RECEIVED FROM A RBITRATION AWARD HAD BEEN RIGHTLY TREATED AS INCOME AGAINST THE INCOME O F RS. 53,561/- SHOWN BY THE ASSESSEE. ACCORDINGLY, HE MADE ADDITION OF R S. 5,71,422/- IN THE INCOME OF THE ASSESSEE. 5 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT 3. BEING AGGRIEVED BY THE ORDER OF THE LD ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALLOWED THE APPEAL PARTLY BY OBSERVING THAT A SUM OF RS. 5,20,0 36/- WAS AWARDED TO THE ASSESSEE ON WHICH INTEREST OF RS. 2,80,115/- WAS COMPUTED. THUS THE TOTAL AMOUNT PAYABLE WAS RS.8,00,151/-. OUT OF WHICH RS. 6,24,983/- WAS PAID DURING THE CURRENT YEAR AND BALANCE AMOUNT WAS PAID IN SUBSEQUENT YEAR. REGARDING ASSESSEES CLAIM OF PROPORTIONATE E XPENSES, THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE. THEREFORE, NO RELIEF ON THIS COUNT CAN BE GIVEN TO THE ASSESSEE. FROM THE EXTRACT OF AWARD, IT WAS FOUND THAT THE AWARD INCLUDED RS. 76,210/- AS REFUND OF SECURITY DE POSIT AND RS. 30,000/- WAS AWARDED AGAINST LITIGATION EXPENSES. BOTH THESE A MOUNTS WERE NOT IN THE NATURE OF INCOME. THEREFORE, HE DELETED THE ADDI TION OF RS. 1,06,210/-. BALANCE ADDITION OF RS. 4,65,212/- HAS BEEN CONFIRM ED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS ARGUED THAT THE HONBLE ITAT BENCH HAD DECIDED T HE ASSESSEES CASE IN ITA NO. 1003/JP/2007 FOR A.Y. 2004-05 ORDER DATE D 31/3/2008 WHEREIN IN PARAGRAPH NO. 12 PAGE NO. 5 OF THE ORDER, THE FI NDING HAS BEEN GIVEN AS UNDER:- 12. CONSIDERING THE ABOVE SUBMISSIONS IN VIEW OF DE CISION OF HONBLE SUPREME COURT IN THE CASE OF GOVIND CHAUDHA RY & 6 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT SONS (SUPRA) RELIED UPON BY THE LD. A/R, WE FIND SUB STANCE IN THE CONTENTION OF THE ASSESSEE THAT WHOLE RECEIPT C ANNOT BE TREATED AS INCOME SINCE THE ASSESSEE HAD ALREADY OF FERED FOR TAX, THE PROFIT ELEMENT ON AWARDED AMOUNT AT THE NET PROFIT RATE OF 8.5% OFFERED DURING ASSESSMENT YEAR 1993-94 FOR WHICH THE AMOUNT WAS AWARDED BY THE ARBITRATOR. BUT AT THE SAME TIME, WE FIND SUBSTANCE IN THE REASON GIVEN BY THE AO THAT THE SAID AWARDED INCOME HAD NOT BEEN DECLARED I N PROFIT & LOSS ACCOUNT FOR ASSESSMENT YEAR 1993-94 AND EXPE NSES INCURRED FOR RELATING TO THE ABOVE RECEIPT HAVE ALR EADY BEEN CLAIMED BY THE ASSESSEE IN THE SAID ASSESSMENT YEAR , THEREFORE, THERE WAS NO JUSTIFICATION ON THE PART OF THE ASSESSEE TO CLAIM THE SAID EXPENSES AND OFFER THE N ET INCOME. UNDER THESE CIRCUMSTANCES AND TO MEET THE ENDS OF J USTICE, WE REMAND THE MATTER TO THE FILE OF THE AO TO VERIFY AS TO WHETHER THE EXPENSES INCURRED BY THE ASSESSEE RELATI NG TO THE AWARD RELATED TO ASSESSMENT YEAR 1993-94 RECEIVED DU RING THE YEAR HAD ALREADY BEEN CLAIMED IN THE ASSESSMENT YEA R 1993- 94 OR NOT AND IF THE AO FINDS THAT THE EXPENSES REL ATING TO ABOVE RECEIPT WERE NOT CLAIMED DURING THE ASSESSMENT YEAR 1993-94, THEN IN SUCH A SITUATION HE IS DIRECTED TO DELETE THE ADDITION OF RS. 5,71,422/-. IT IS NEEDLESS TO MENTI ON OVER HERE THAT WHILE DECIDING THE ISSUE AFRESH IN VIEW OF HIS V ERIFICATION ON THE CLAIM OF EXPENSES AS DISCUSSED ABOVE, THE AO WILL AFFORD ADEQUATE OPPORTUNITY OF BEING HEARD TO THE A SSESSEE. THE GROUND NO. 4 IS THUS ALLOWED FOR STATISTICAL PURP OSES. 7 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT HE HAS DRAWN OUR ATTENTION ON PAGE NOS. 27 TO 43 OF THE PAPER BOOK THAT THE AWARD WAS APPROVED ON 30/10/2000 FOR RS. 5,29,036 /-, WHICH WAS PAYABLE WITHIN THE THREE MONTHS FROM THE DATE OF AWAR D. THEREAFTER, IT IS LIABLE TO BE PAID SIMPLE INTEREST OF 18% TILL DATE OF PAYMENT OR DATE OF DECREE, WHICHEVER IS EARLIER. THE ASSESSEE RECEIVED R S. 6,24,983/- IN A.Y. 2004-05 AND BALANCE AMOUNT OF RS. 1,40,514/- WAS REC EIVED IN A.Y. 2006- 07. THIS AMOUNT INCLUDES ORIGINAL AWARD AMOUNT OF RS. 5,20,036/- AND INTEREST AMOUNT OF RS. 2,80,115/-. THE LD AR HAS DRA WN OUR ATTENTION ABOUT CALCULATION OF INTEREST ON AWARD SUBMITTED BEF ORE THE LD CIT(A), WHICH HAS BEEN REPRODUCED ON PAGE 5 OF THE ORDER OF THE LD CIT(A) AND FURTHER ARGUED THAT THIS INTEREST AMOUNT IS PERTAI NED TO F.Y. 1993-94 TO F.Y. 2003-04, THUS THE INTEREST ADDED IN THE AWARD A MOUNT WAS NOT PERTAINED TO A PARTICULAR YEAR NOT FOR THE YEAR, WHI CH IS BEFORE THE HONBLE BENCH I.E. F.Y. 2004-05. IT IS FURTHER ARGUED THAT THE COPY OF ARBITRATION WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT AND FIRST APPEAL AND EVEN NOT BEFORE THE HONBLE IT AT DUE TO REASONS BASED KNOWN TO THE ASSESSEE AND ALSO THE LOWER AUTHOR ITIES HAD ALSO NOT ASKED TO PROVIDE THE COPY OF ARBITRATION TO DECIDE THE NATURE OF RECEIPTS AWARDED BY THE ARBITRATOR. IT IS UNDISPUTED FACT THA T THIS AWARD INCLUDES 8 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT PAYMENT OF VI RUNNING BILLS OF RS. 1,36,983/-, INTE REST THEREON RS. 1,80,818/-, REFUND OF SECURITY DEPOSIT OF RS. 76,21 0/-, INTEREST THEREON RS. 96,025/- AND LITIGATION EXPENSES RS. 30,000/-. THE L D CIT(A) HAD ALLOWED RELIEF ON REFUND OF SECURITY DEPOSIT OF RS. 76,210/ - AND LITIGATION EXPENSES OF RS. 30,000/- IN TOTAL RS. 1,06,210/-. IT IS FURT HER ARGUED THAT INTEREST ON SECURITY DEPOSIT ALSO HAS NOT BEEN ALLOWED BY THE LD CIT(A) EVEN HE ALLOWED THE REFUND OF SECURITY DEPOSIT IN FAVOUR OF THE ASSESSEE. HE HAS FURTHER DRAWN OUR ATTENTION ON HONBLE ITAT, JAIPUR B ENCH DECISION IN ITA NO. 837/JP/2009 A.Y. 2006-07 ORDER DATED 15/12/201 0 WHEREIN REMAINING AMOUNT OF AWARD AT RS. 1,80,514/- ON WHICH THE ASSES SEE HAS SHOWN NET PROFIT RATE @ 8.57% BUT THE HONBLE ITAT HAD REVERSE D THE ORDER OF THE LD CIT(A) FOR A.Y. 2006-07 AND CONFIRMED THE ORDER OF T HE ASSESSING OFFICER BY CONFIRMING THE ADDITION OF RS. 8,13,194/-, WHICH INCLUDES RS. 1,80,514/- AND 7,08,360/- RECEIVED DURING THE YEAR ON ACCOUNT OF AWARD APPROVED BY THE ARBITRATOR, WHICH HAS BEEN CHALLENGED BEFORE THE HONBLE RAJASTHAN HIGH COURT WHEREIN THE HON'BLE HIGH COURT HAS ALLOWED THE QUESTION OF LAW AS UNDER:- WHETHER THE TRIBUNAL WAS JUSTIFIED IN TREATING THE E NTIRE INCOME OF RS. 8,13,194/- AS INCOME FOR THE ASSESSME NT YEAR IN QUESTION? 9 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT HE HAS FURTHER ARGUED THAT IT IS FACT THAT THE ASSE SSEE HAS CHALLENGED THIS ISSUE BEFORE THE HONBLE COURT ON THE GROUND THAT W HETHER TOTAL RECEIPTS ARE INCOME OF THE ASSESSEE OR CERTAIN PERCENTAGE ON AWARD IS TO BE ASSESSED INCOME OF THE ASSESSEE. HE HAS FURTHER ARG UED THAT VARIOUS COURTS HAVE BEEN CONSIDERED THIS ISSUE PARTICULARLY IN THE CASE OF CIT VS GOVINDA CHOUDHARY & SONS (1994) 74 TAXMAN 331 (SC) WHEREIN IT HAS BEEN HELD THAT AMOUNT RECEIVED ON ACCOUNT OF ARBITR ATION AWARD FOLLOWING A DISPUTE IN RELATION TO A WORK CONTRACT EXECUTED BY THE ASSESSEE, AN AMOUNT OF RS. 2,77,692/- WAS AWARDED AS INTEREST TO T HE ASSESSEE. THE AMOUNT OF INTEREST WAS ATTRIBUTABLE TO AND INCIDENT AL TO BUSINESS CARRIED ON BY ASSESSEE AND WAS, THUS ASSESSABLE AS BUSINESS INC OME-HELD, YES. THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS N.C. KALADHARAN ORDER DATED 31/01/2008 PASSED IN ITA NO. 180 OF 2002 HAS HELD THAT THE QUESTION RAISED IS WHETHER THE ESTIMATION OF INCOME AT 10% AS FIXED BY THE CIT(APPEALS) AND CONFIRMED BY THE TRIBUNAL APPLIES TO INTEREST ELEMENT OF THE AWARD AMOUNT. ACCORDING TO THE REVENUE, INTEREST IS ENTIRELY TAXABLE. HOWEVER, THE HON'BLE KERALA HIGH COURT FOUND THAT T HE ISSUE IS COVERED BY THE HON'BLE SUPREME COURT DECISION IN THE CASE OF C IT VS. GOVINDA CHOUDHURG AND SONS (2003 ITR 881), THEREFORE, THE RE VENUES APPEAL HAS 10 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT BEEN DISMISSED BY THE HON'BLE SUPREME COURT. IN THE CASE OF CIT VS BUILDERS UNION (1995) 79 TAXMAN 130 (ORI) ORDER DATE D 17/11/1994 WAS OCCASION TO CONSIDER THE SIMILAR ISSUE AWARD AMOUNT OF RS. 7,17,920/- IN THE CASE OF CIVIL WORK CONTRACT COMPRISING OF PRINC IPAL AMOUNT OF RS. 1,03,382/-, PRE-AWARD INTEREST OF RS. 5,95,244/- AND POST-AWARD INTEREST OF RS. 19,293/-. THE ASSESSING OFFICER TAXED FULL AMOUN T WHEREAS TRIBUNAL CONFIRMED THE ADDITION @ 12% ON TOTAL AWARD AMOUNT AF TER EXCLUDING INTEREST COMPONENT SHOULD BE TAKEN AS ASSESSEES I NCOME. IT ALSO HELD THAT PRE-AWARD INTEREST SHOULD BE TOTALLY EXCLUDED F ROM INCOME BUT THE HONBLE COURT HELD THAT ITAT WAS JUSTIFIED IN DIRECTI NG ITO TO ESTIMATE PROFIT @ 12.5% ON PRINCIPAL AMOUNT OF AWARD BUT PRE-A WARD INTEREST COMPONENT WAS TAXABLE, WHICH WAS ATTRIBUTABLE TO AND I NCIDENTAL TO BUSINESS CARRIED ON BY THE ASSESSEE. IN THE CASE OF CIT VS PREMIER ENGG.CO. (1995) 23 ITR 522 (KER), THE HON'BLE HIGH C OURT HAS HELD THAT THE ARBITRATION AWARD AMOUNT PAYABLE ON ACCOUNT OF E SCALATION OF COST DUE TO DELAY IN COMPLETION OF WORK AND TRIBUNAL WAS RIGHT IN TREATING 11% AWARD AMOUNT AS A PROFIT. HE ALSO RELIED ON THE FOLL OWING CASE LAWS:- (I) KONKAN BARGE BUILDERS VS ITO (2008) 166 TAXMAN 21 7 (BOM). (II) CIT VS ORIENTAL INSURANCE CO. LTD. (2012) 27 TA XMANN.COM 28 (ALL). (III) CIT VS UNITED INSURANCE CO. LTD. (2010) 325 ITR 231 (KAR.) 11 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT (IV) RAMESHWAR VS. UJJAIN DEVELOPMENT AUTHORITY (201 2) 23 TAXMANN.COM 6 (MP) (V) M. JAFFER SAHEB VS. CIT (RC 127/1997 DATED 19/12 /2013. (VI) CIT VS. TAPESHWARI DEVI (2013) 38 TAXMANN.COM 48 (ALL.) (VII) MOTILAL CHADDAMILAL JAIN VS. CIT (1980) 3 TAXMA N 562 (ALL). (VIII) CIT VS TNK GOVINDARAJULU CHETTY (1987) 165 ITR 231 (SC). (IX) KHORSHED SHAPOOR CHENAI VS ACED (1980) 3 TAXMAN 23 (SC). (X) CIT VS HARDWARI LAL HUF (2008) 172 TAXMAN 68 (P&H) . (XI) RAMA BAI VS. CIT (1991) 54 TAXMAN 496 (SC). (XII) CIT VS VAIKUNDOM RUBBER CO LTD. (2001) 114 TAXM AN 378 (KER.). WHEREIN THE ISSUE OF INTEREST EARNED DURING THE PEN DENCY OF AWARD OR LATER ON HAS BEEN CONSIDERED BY THE VARIOUS HON'BLE HIGH COURTS. HE HAS PARTICULARLY DRAWN OUR ATTENTION ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF KONKAN BARGE BUILDERS VS ITO I N ITA NO. 695 OF 2004 ORDER DATED 24/08/2007 WHEREIN IT HAS BEEN HELD THAT INTEREST AMOUNT RECEIVED BY THE ASSESSEE IN ARBITRATION AWARD PERTAI NED TO A PERIOD RANGING TO SIX YEARS, ENTIRE AMOUNT OF INTEREST COULD NOT B E ASSESSEE IN YEAR OF THE RECEIPT INASMUCH AS INTEREST INCOME ACCRUED FROM YE AR TO YEAR AND HELD- YES. FINALLY HE ARGUED THAT FULL AMOUNT SHOULD NOT BE ADDED. HE HAS FURTHER DRAWN OUR ATTENTION PAGE NO. 54 OF THE PAPER BOOK WHEREIN COPY OF P&L ACCOUNT YEAR ENDING 31/3/1993 HAS BEEN PLACE D ON RECORD AND ARGUED THAT THE ASSESSEE HAS DEBITED WORK EXPENSES O F RS. 39,97,074/- ON ACCOUNT OF WORK CONTRACT. THE ASSESSEE WAS NOT IN POS ITION TO DEMONSTRATE 12 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT THAT WHETHER FULL EXPENSES RELATED TO AWARD AMOUNT H AS BEEN DEBITED OR NOT, THE MATTER IS VERY OLD. THEREFORE, IT IS DIFFIC ULT TO PROVE THE DIRECTION GIVEN BY THE HONBLE BENCH VIDE ORDER DATED 30/3/20 08 FOR A.Y. 2004-05. A REASONABLE PERCENTAGE HAS ALREADY DISCLOSED BY TH E ASSESSEE ON ALL THE CONTRACT AMOUNT. THUS, ADDITION CONFIRMED BY THE LD CIT(A) MAY PLEASE BE DELETED. 5. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LD CIT(A) AND ARGUED THAT THE ASSESSEE WAS NOT ABLE TO PROVE WHETHER THE EXPENSES RELATING TO AWARD AMOUNT HAS NOT BEEN DEBIT ED. THEREFORE, FULL AMOUNT IS TO BE TAXED IN THE YEAR UNDER CONSIDERATI ON. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE COPY OF A WARD PLACED IN THE PAPER BOOK WAS NOT BEFORE THE COORDINATE BENCH AT TH E TIME OF HEARING. THE LD CIT(A) HAS CONSIDERED THE TERMS AND CONDITIONS OF THE AWARD AND ALLOWED PART RELIEF. ON VERIFICATION OF COMPUTATION, IT IS FOUND THAT PAYMENT OF (VI) RUNNING BILLS, PRINCIPAL AMOUNT WAS RS. 1,79 ,206/- AND THEREON INTEREST FROM 01/6/1993 TO 31/5/1999 WAS RS. 2,58,05 7/- AND BALANCE PAYMENT (UNMEASURED WORK), PRINCIPAL AMOUNT RS. 2,40 ,000/- AND INTEREST THEREON FROM NOVEMBER, 1993 TO 31/5/1999 WAS RS. 3,2 1,600/-. ON BOTH 13 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT THE CLAIMS, THE ARBITRATOR HAS ALLOWED PRINCIPAL AMO UNT OF RS. 1,36,983/- AND THEREAFTER INTEREST AT RS. 1,80,818/-, THUS, TO TAL AMOUNT HAS BEEN WORKED BY THE ARBITRATOR AT RS. 3,17,801/-, REMAININ G AMOUNT PERTAINED TO REFUND OF SECURITY DEPOSIT OF RS. 76,210/- AND INTE REST THEREON FROM NOVEMBER, 1993 TO 31/5/1999 RS. 95,025/- AND LITIGA TION EXPENSES OF RS. 30,000/-. SINCE THE IDENTICAL ISSUE DECIDED BY THE COORDINATE BENCH FOR A.Y. 2006-07 HAS ALREADY BEEN CHALLENGED BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT AND THE HON'BLE HIGH COURT HAS ALSO FRA MED QUESTION OF LAW IN THE CASE OF ASSESSEE, WHICH IS PENDING FOR DISPOSAL. WHEN SIMILAR ISSUE ALREADY IS BEFORE THE HON'BLE HIGH COURT, WE SET ASI DE THE ISSUE TO THE ASSESSING OFFICER AND DIRECT HIM TO DECIDE THE CASE ON THE BASIS OF DECISION OF HON'BLE HIGH COURT ON SIMILAR FACTS AND CIRCUMST ANCES. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD CIT(A). 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 18/03/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18 TH MARCH, 2016 14 ITA NO. 329/JP/2015 CHANDI RAM VS. ACIT RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI CHANDI RAM, KOTA 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT CIRCLE-1, KOTA 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.329/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR