Thermax Babcock & Wilcox Ltd., Pune V. Addl.CIT,Range 8, Akurdi, Pune

ITA 788/PUN/2006

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7595 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 04-07-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA ABHAY DAMLE
• Assessee Lawyers: R D ONKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 787 & 788 /PN/200 6 ( ASSTT. YEAR : 200 1 - 02 & 2002 - 03 ) THERMAX BABCOCK & WILCOX LIMITED, ENERGY BUILDING, 7/2 R.D. AGA ROAD, C HINCHWAD, PUNE 411 019 PAN : NOT AVAILABLE .. APPELLANT V. A DDL CIT, RANGE 8, AKURDI, PUNE . RESPONDENT APPELLANT BY : SHRI R.D. ONKAR RESPONDENT BY : S/ SHRI HARESHWAR SHARMA/ABHAY DAMLE ORDER PER I.C. SUDHIR J M THE LD. A .R. POINTED OUT THAT GROUND NO. 6 IN ITA NO. 787/PN/2006 AND GROUND NO. 2 IN ITA NO. 788/PN/2006 ON SIMILAR ISSUE IS TO BE ADJUDICATED UPON BY THE TRIBUNAL AS PER ORDER DT. 30 TH SEPTEMBER 2008 OF THE TRIBUNAL IN M.A. NOS. 79 & 80/PN/2008 ARISING OUT OF T HE APPEALS IN QUESTION. HE SUBMITTED THAT WHILE ADJUDICATING THE ISSUES RAISED IN OTHER GROUNDS IN THE APPEALS, THE TRIBUNAL INADVERTENTLY DISMISSED THE GROUND NO. 6 IN A.Y. 2001 - 02 AND GROUND NO. 2 IN A.Y. 2002 - 03 ON THE PRESUMPTION THAT THE SAME WAS ALS O NOT PRESSED AS IT WAS DONE IN A.Y. 2000 - 01. LD. A.R. SUBMITTED FURTHER THAT THE ISSUE RAISED IN ABOVE STATED GROUND IS , HOWEVER COVERED BY THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF FOR THE A.Y. 1997 - 98 DECIDED BY THE OR DER DT. 28 TH FEBRUARY 2007 IN ITA NO. 660/ PN /2001. A COPY OF THIS ORDER HAS BEEN FURNISHED. THE LD. A.R REFERRED PARA NO. 29.6 OF THE SAID ORDER DT. 20 TH FEBRUARY 2007 OF THE TRIBUNAL WHEREBY THE ISSUE HAS BEEN RESTORED BACK TO THE FILE OF A.O WITH A DI RECTION THAT THE A.O SHOULD ASCERTAIN AND DETERMINE ACCRUED LIABILITY PERTAINING TO THE YEAR IN QUESTION IN RESPECT OF THE LIQUIDATED DAMAGES IN THE LIGHT OF THE TERMS AND ITA NO 787 & 788 /PN/200 6 THERMAX BABCOCK & WILCOX LTD.. A.Y. 2001 - 02 & 2002 - 03 PAGE OF 3 2 CONDITIONS OF THE CONTRACT / AGREEMENT AND THEN TO ALLOW THE SAME AS A DEDUCTION FROM THE PROFITS IN THE YEAR UNDER CONSIDERATION. 2. THE LD. D.R. DID NOT DISPUTE THE ABOVE SUBMISSION OF THE LD. A.R. HE, HOWEVER, TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE. 3. HAVING GONE THROUGH THE ORDER DT. 28 TH FEBRUARY 2007 OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF FOR THE A.Y. 1997 - 98 (SUPRA), WE FIND WITH AN IDENTICAL ISSUE HAS BEEN ADJUDICATED UPON BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE THAT THE FOLLOWING FINDING IN PARA NO. 29.6 OF THE SAI D ORDER : 29.6 WE, THEREFORE, RESTORE THIS ISSUE BACK TO THE FILE OF THE A.O FOR A LIMITED PURPOSE WITH A DIRECTION THAT THE AO SHOULD ASCERTAIN AND DETERMINE THE ACCRUED LIABILITY PERTAINING TO THE YEAR IN QUESTION, IN RESPECT OF THE LIQUIDATED DAMAGES IN THE LIGHT OF THE TERMS AND CONDITIONS OF THE CONTRACT AGREEMENT, AND THEN TO ALLOW THE SAME AS A DEDUCTION FROM THE PROFITS IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE SHALL BE AT LIBERTY TO FURNISH THE ACTURIAL VALUATION IN RESPECT OF THE ASSESSEES ACCRUED LIABILITY ON ACCOUNT OF LIQUIDATED DAMAGES FOR THE DELAY CAUSED BY THE ASSESSEE IN ERECTING OR COMMISSIONING THE CONTRACT WORK AS PER THE TERMS OF THE CONTRACT AGREEMENT. NEEDLESS TO MENTION THAT IF OUT OF THE PROVISION MADE IN A PARTICULAR YEAR ON ACCOUNT OF THE ASSESSEES ACCRUED LIABILITY FOR LIQUIDATED DAMAGES, ANY SURPLUS IS FOUND IN ANY OF THE SUBSEQUENT YEAR, THEN THAT SURPLUS WOULD BE BROUGHT TO TAX, AND SIMILARLY IF THERE IS A SHORTAGE THEN IT WILL BE ALLOWED IN THE YEAR IN WHICH THE FIN AL QUANTIFICATION IS SETTLED. THIS GROUND IS, THUS, DECIDED ACCORDINGLY. . SINCE THERE IS NO DISPUTE THAT FACTS ON THE ISSUE ARE SIMILAR DURING THE A.YS. UNDER CONSIDERATION, WE FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSEL F ON AN IDENTICAL ISSUE DIRECT THE A.O TO ASCERTAIN AND DETERMINE THE ACCRUED LIABILITY PERTAINING TO THE YEAR IN QUESTION IN RESPECT OF THE LIQUIDATED DAMAGES IN THE LIGHT OF THE AGREEMENT AND THEN TO ALLOW THE SAME AS A DEDUCTION FROM THE PROFITS IN T HE YEARS UNDER CONSIDERATION AS DIRECTED BY THE TRIBUNAL IN THE A.Y. 1997 - 98 , AFTER ALLOWING LIBERTY TO THE ASSESSEE TO FURNISH THE ITA NO 787 & 788 /PN/200 6 THERMAX BABCOCK & WILCOX LTD.. A.Y. 2001 - 02 & 2002 - 03 PAGE OF 3 3 ACTURIAL VALUATION IN RESPECT OF ASSESSEES ACCRUED LIABILITY ON ACCOUNT OF LIQUIDATED DAMAGES FOR THE DELAY CAUSED BY THE A SSESSEE IN ERECTING OR COMMISSIONING THE CONTRACT WORK AS PER THE TERMS OF THE CONTRACT. THE GROUND NO. 6 RAISED IN THE APPEAL FOR THE A.Y. 2001 - 02 AND GROUND NO. 2 RAISED IN APPEAL FOR THE A.Y. 2002 - 03 INVOLVING THE ISSUE ARE THUS ALLOWED FOR STATISTICA L PURPOSES. 4. THE APPEALS ON THE ISSUE ARE, ACCORDINGLY, ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31ST JANUARY 201 1 . SD/ - SD/ - ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( I.C. SUD HIR ) JUDICIAL MEMBER PUNE , DATED THE 31ST JANUARY , 20 1 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PPELLANT 2. THE RESPONDENT 3. THE CIT V , PUNE 4. THE CIT(A) - I I I , PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER A SSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE