Income Tax Appellate Tribunal - Mumbai
Bechtel International Inc. Usa , Mumbai vs Assessee on 12 February, 2007
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES, 'G', MUMBAI
BEFORE S/SHRI D.K. AG ARW AL (JM) AND R.K.P AND A (A.M)
ITA No.4120/M um/2007
(Assessment Year: 2003-04)
Bechtel International Inc., The Assistant Director of
USA, Incom e Tax,
C/o KPMG, International Taxation-3(1),
1st Floor, V/s Scindia House,
Lodha Excellus, 1 s t Floor,
Apollo Mills Com pound, Ballard Estate,
N.M.Joshi Marg, Mumbai-400038
Mahalaxmi,
Mumbai-400011.
P AN: AAACB6149A
APPELLAN T RESPONDENT
ITA No.2188/M um/2010
(Assessment Year: 2005-06)
Bechtel International Inc., The Assistant Director of
USA, Incom e Tax,
C/o KPMG, International Taxation-3(2),
1st Floor, V/s Scindia House,
Lodha Excellus, 1 s t Floor,
Apollo Mills Com pound, Ballard Estate,
N.M.Joshi Marg, Mumbai-400038
Mahalaxmi,
Mumbai-400011.
P AN: AAACB6149A
APPELLAN T RESPONDENT
Appellant by : Shri Sunil M.Lala
Respondent by : Shri Pankaj Bagri
O R D E R
PER D.K. AGAR WAL (JM) These two appeal preferred by the assessee are directed against the separate orders dated 12.2.2007 and ITA No.4120/Mum/2007 2 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) 13.1.2010 passed by the learned Commissioner of Incom e Tax (A) for the assessment years 2003-04 and 2005-06 respectively. Since facts are identical and issue involved is comm on, both these appeals were heard together and are being disposed of by this common order for the sake of conveyance.
ITA No.4120/Mum/2007 (AY: 2003-04)
2. Briefly stated facts of the case are that the assessee- company M/s Bechtel International Inc.,(in short BINT) is a non-resident Company, incorporated in United States of America. The assessee has entered into contracts for two projects in Indi a viz. Dabhol Power Com pany (DPC) for setting a power plant i n Maharashtra and also to execute the contract with Haldia Petrochemical Ltd.(HPL) in connection with setting up of a petrochemical plant in W est Bengal. The return of income was filed declaring total incom e of Rs.13,02,55,470/-. However, the assessment was completed at an income of Rs.15,35,19,800/- vide order dated 21.2.2006 passed under section 143(3) of the Income Tax Act, 1961 (the Act). On appeal, the learned Commissioner of Incom e Tax (A) partl y allowed t he appeal. ITA No.4120/Mum/2007 3 ITA No.2188/Mum/2010
( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06)
3. Being aggrieved by the order of the learned Commissioner of Incom e Tax (A), the assessee is in appeal before us.
4. Ground No.1 is against the sustenance of disallowance of expenses of Dabhol Power Project of Rs.1,52,87,952/-.
5. The brief facts of the issue are that during the course of assessm ent proceedings, the AO interalia observed that the contract with DPC was terminated with effect from 17.6.2001 for the default in payment by DPC. The Petrochemical Proj ect at Haldia had been completed in past. During the year the project office was actively pursuing its claim made against the DPC at the same time exploring the possibility of reviving the project. Also during the year th e project office was engaged in regulatory compliance under Incom e Tax Act, Sales Tax Act, W ealth Tax Act etc. The AO further observed that the Head Office has confirmed its intention to continue the project office in India and has agreed to render financial and other assistance from time to time. The AO further observed that in the computation of income, the assessee has shown income from Dabhol Project and income from Haldia Project. In the profit and loss account of Dhabhol Project the assessee has shown ot her income at Rs.59,90,915/- and write back of excess accrual on recognized loss on contract is shown at ITA No.4120/Mum/2007 4 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) Rs.11,60,75,000/- and write back of provision for contingencies has been shown at Rs.82,86,880/-. Accordingly, profit before tax has been shown at Rs.10,17,95,112/-. In Schedule VIII of Schedules forming part of the profit and loss account details of other income is given which is a under :
Interest on incom e tax refund Rs.13,43,939/-
Custom duty draw back Rs.41,11,367/- Gain/Loss on disposal of assets (net) Rs.4,85,609/ - Liabilities no longer required written back Rs.50,000/- Total Rs.59,90,915/-
In Schedule VII of Schedules forming part of the profit and loss account value of the work done is shown at NIL. This shows that no business activity has been done during the year. The Assessee has earned onl y income from other sources. The AO f urther observed that agai nst other incom e the assessee has debited various expenses. The Assessee was requested to give reasons as to why the expenses should be allowed as a deduction when there is no busi ness activity carried out by the assessee. In reply, it was interalia submitted by the assessee that there is only suspension of an activity and business was never closed down by BINT. Thus, termination of the contract with DPC results into onl y temporary cessation of the activity. It was further submitted that t here are several legal precedents, which reiterate that ITA No.4120/Mum/2007 5 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) temporary cessi on of the activity due to adverse conditions cannot be considered as cessation of the business and hence the expenses incurred in the year in which no business activity is carried due to som e adverse conditions, although business is not closed down, should be allowed as a deduction in that year and also allowed to be carried forward as business loss to the next year and in support, the assessee also placed reliance on various decisions. The AO after considering t he assessee's submissions observed that it is a fact that the Petro Chemical Project in W est Bengal has been com pleted and the contract with DPC has been terminated effective 17 June 2001. Also there is no business income in both the project during the year. It is only other income shown by the assessee in both the projects. Therefore, any expenditure is not allowable against these unearned incom e shown by the assessee under the head "other incom e" in both the project and the case laws relied upon by the assessee-company are entirely different than the facts of the assessee's case. The AO after relying on certain decisions appearing at page 5 of the assessment order held that the expenditure claimed by the assessee against the income from both the projects shown by the assessee is not allowable as t here was no business activity carried on by the assessee duri ng the year. Besides the above, the AO further observed that in the absence of any ITA No.4120/Mum/2007 6 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) details furnished by the assessee, deduction under section 44C of the Income Tax Act, 1961 (the Act) is also not allowable. The AO further observed that the assessee has claimed a deduction of Rs.2,11,581/- being demand raised by the Sales Tax Authorities for the Financi al Year 1990-
91. As no proof was filed whether the payment is compensatory or penal in nature, the AO disallowed the same.
6. On appeal, the learned Commissioner of Income Tax (A) has observed that the BINT has a proj ect office in India to carry out two projects, namely, Haldia Petrochemical Project in W est Bengal which project was compl eted in March 2000, the other project was that of DPC in Maharashtra. The learned Commissioner of Incom e Tax (A) further observed that the project of DPC was not com pleted, but was prem aturel y terminated w.e.f. 17.6.2001. After 17.6.2001, the assessee did not have any business in India, except the winding up of the project prematurely terminated at Dabhol and closing any operation rel ating to Haldia project. The permission by RBI for starting a project office in India was given b y RBI's order dated 29.6.1994. Extension was granted by RBI from time to time. The AR has filed copy of RBI's letter dated 21.11.2002 to show that the RBI has granted approval for extension of project office till ITA No.4120/Mum/2007 7 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) 30.9.2003. RBI has subsequentl y extended the period till 30.9.2005 vide their letter dated 10.1.2005. The assessee had sought extension vide letter dated 28.9.2005 till 30.9.2006. According to the learned Commissioner of Incom e Tax (A) the closer examination of the facts reveals that the assessee being a non-resident, is entitled to carry out onl y those activities which are permitted by RBI or the Central Governm ent. In other words, when a permission is given for particular project and that project has come to an end either after successful com pletion or on account of premature termination, the business comes t o an end. A non-resident cannot continue to have an office and be engaged in business with the hope that sometime in future some project may com e and till then business could be said to be in temporarily lull. The assessee had permission for two projects, nam ely, Haldia Project and DPC. Haldia Project was com pleted in March 2000. Dabhol Project was prematurely terminated in June, 2001. The assessee had no contract or work in India except the winding up of the Dabhol Project. After termination of the agreement, the assessee started the winding up proceedings and started dem obilizing man, material and equipm ent from Dabhol site and started sending them to the places outsi de India where they could be used. Besides demobilizing its equipment, material and manpower, assessee was also engaged in pursuing its ITA No.4120/Mum/2007 8 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) dispute with DPC for the amounts receivable from DPC towards the contract. The learned Commissioner of Incom e Tax (A) after relyi ng the ratio of certain decisions appearing at pages 8 to 10 of his order has held that the assessee had no busi ness during Financial Year 2002-03 and was not entitled to deduction of any busi ness expenditure. Cl aim of expenses of Rs.1,52,87,952/- m ade in the return of income is therefore not in order. The AO has rightly disallowed. Income of the Dabhol Proj ect shall be taken at Rs.59,90,915/- as shown in the books. The learned Commissioner of Income Tax (A) on the issue of disallowance of paym ent of Rs.2,11,581/- to the Sal es Tax Authorities after examining the nature of payment held that in the event of business expenditure being allowabl e to the assessee, the disallowance to the extent of two pa ym ents of Rs.1,13,840/- and Rs.5,000/- is confirmed and deleted the disallowance of payment of Rs.92,741/-.
7. At the time of hearing, the learned counsel for the assessee while reiterating the sam e submissions as submitted before the AO and the learned Commissioner of Incom e Tax (A) further submits that it is a f act that DPC project was not completed but was prematurely terminated with effect from 17.6.2001. Thereafter, the permission by RBI for starting a project office in India was given by RBI's ITA No.4120/Mum/2007 9 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) order dated 29.6.1994. Extension was given by RBI from time to time till 30.9.2003. RBI has subsequently extended the period till 30.9.2005 vide their letter dated 10.1.2005. The extension was further sought vide letter dated 28.9.2005 till 30.9.2006. He further submits that the assessee-company has entered into an agreement with Bharat Heavy Electricals Limited on 27.3.2006 for providing through its Dabhol Restarting Project Office, Engineering, Design, Revi ew and Programme Management Services in relation to the revival of the aforesaid Power Project. He further submits that the AO after considering the same has assessed the income from Dabhol Project as business income for the assessment years 2006-07 and 2007-08 and in support he also placed on record the copy of the said assessment orders. He further submits that even in the assessment year 2001-02, the AO after considering the fact that on 17.6.2001 the project office of the assessee terminated its contract with DPC has assessed income from Haldia Project and Dabhol Project as business income vide assessment order dated 29.3.2004 passed under section 143(3) of the Act. In the light of the above, he submits that mere fact that the contract with DPC was terminated with eff ect from 17.6.2001 for some period does not imply that it has ceased to exists when the assessee has proved that the assessee has got RBI permission for extension of the project ITA No.4120/Mum/2007 10 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) off ice and has also proved that the assessee has started its business in the Financial Year 2005-06 onwards and the same has been accepted by the AO itself. The l earned counsel for the assessee for the proposition that temporall y suspension of business does not mean that the assessee has discontinued business placed reliance on the following decisions:
Sr.No. Judici al Precedent Citati on
1 Karsondas (1972) (83 ITR 1)(Bom)
Ranchhoddass Vs. CIT
2 L.VE Vairavan Chettiar (1969)(72 ITR 114)(Mad)
V.CIT
3 CIT V/s Bharat Nidhi (1966) 60 ITR 520(Punj.)
Ltd.
4 M/s King Prawns 2011-TIOL-100-ITAT-
Limited V. ITO Mum
5 ITO V/s Mokul Finance (2007) 110 TTJ (Del) 445
(P) Ltd.
6 ITO V/s Mrs.Vanishree (2003) 86 ITD 273
Karunakaran (Chennai)
7 Commentary by (Fifth edition, Vol-1 page
Chaturvedi & Pithisaria (1369-70)
In the light of the above, he submits since the assessee has filed com plete details of expenses, break up of which is appearing at pages No.13,18 and 35 of the assessee's paper book, the learned Commissioner of Incom e Tax (A) was not justified in sustaining the disallowance of expenses of Rs.1,52,87,952/- made by the AO and therefore the disallowance made by the AO be deleted.
ITA No.4120/Mum/200711 ITA No.2188/Mum/2010
( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06)
8. On the other hand, the learned D.R. while relying on the order of the AO and the learned Commissioner of Incom e Tax (A) submits that since the complete facts of revival of DPC project was not before the AO, theref ore, i n the interest of justice the issue may be set aside to the file of the AO.
9. W e have carefully considered the submissions of the rival parties and perused the material available on record. W e find that the facts are not in dispute. W e further find that it is also not in dispute that the DPC project was not completed but was tem porarily terminated with effect from 17,6,2001. However, the assessee got permission from RBI for starting the project office in India vide order dated 29.6.1994. The extension was further granted by the RBI from time to time till 30.9.2003 and further extension was granted till 30.9.2005 and further extension was sought till 30.9.2006. In the mean time, the assessee entered into an agreem ent with Bharat Heavy Electrical Limited on 27.3.2006 for providing through its Dabhol Restart Project Office, Engineering, Design, Review and Programme Managem ent Services in relation to the revival of DPC Project. W e further find that the AO in the assessment orders for the subsequent assessment years 2006-07 and 2007-08 has accepted the income from DPC as busi ness income.
ITA No.4120/Mum/200712 ITA No.2188/Mum/2010
( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06)
10. In Karsondas Ranchhoddass (supra), it has been held that where assessee has been found to be a dealer in shares prior to and subsequent to an assessment year, he must be presumed to be a dealer during the interregnum period also in the absence of contrary evi dence and, hence loss suffered on sale of shares during such period of inactivity is allowable as business loss.
11. In L.VE Vairavan Chettiar (supra) it has been held that a business, to be in existence need not have work all the time. There may be a lull in the business and the concern may still be a going concern, though it may be dormant. The mere fact that a businessm an has not been able to obtain a contract and the business has for some time been quiet does not imply that it has ceased to exists.
12. In Bharat Nidhi Ltd. (supra) it has been held that in the case of discontinuance of a particular business by a com pany and continuance of the other business, the loss suffered and expenses incurred by the company in respect of discontinued business are allowable against the entire incom e of th e company for the whole year.
13. In M/s King Prawns Limited, (supra) it has been held that it is clear from the annual account of the assessee and ITA No.4120/Mum/2007 13 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) the return filed by it that the assessee had revived its business, the Revenue cannot overlook the evidences and hold that the business can never be revived and accordingl y allowed the claim of the assessee.
14. In Mokul Finance (P) Ltd.(supra) it has been held that the assessee company having not closed its business, expenditure incurred during the period of dormancy of business in order to keep the com pany afloat is allowable business expenditure.
15. In Mrs.Vanishree Karunakaran (supra) it has been held that the assessee having incurred expenditure towards interest on borrowals taken for business it cannot be said that there was no business loss simply because there was nothing on credit side of the P&L account owing to tem porary lull in the business; current year's loss from business can be set off against the current year's profit from the profession carried on by the assessee in view of section 70 of the Act.
16. Applyi ng the ratio of the above decisi ons to the facts of the present case and in absence of any contrary decision cited by the learned D.R. and keeping in view the documentary evidence filed by the assessee to show that the assessee got extension of project office from the RBI till 3.09.2006 and in March 2006 it entered into ITA No.4120/Mum/2007 14 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) an agreement with Bharat Heavy Electri cals Limited in relation to the revival of the DPC Project and also keeping in view that in the subsequent assessment years 2006-07 and 2007-08 the AO has also accepted the same, we are of the view that the assessee has proved that the assessee has revived its busi ness. Mere inactivity for a limited period does not mean that the assessee's business ceased to exists or that it di d not carry on business at all. Accordingly except the disallowance of sales tax expenditure of Rs.1,13,840/- and Rs.5,000/- sustained by the learned Commissioner of Income Tax (A), we delete the balance disallowance of expenses m ade by the AO. The ground taken by the assessee is therefore, partl y allowed.
17. Ground No.2 is against sustenance of disallowance of Club Security Deposit of Rs.2,55,340/- and Ground No.3 is against allowability of set off of the expenses against the settlem ent of income of Dabhol Power Proj ect.
18. At the time of hearing, the learned counsel for the assessee submits that he does not want to press aforesaid grounds No.2 and 3 which was not objected to by th e learned DR .
ITA No.4120/Mum/200715 ITA No.2188/Mum/2010
( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06)
19. That being so and in the absence of any other supporting m aterials placed on record by the learned counsel for the assessee, the grounds taken by the assessee are therefore, rejected being not pressed.
20. Ground No.4 is against the l evy of interest under sections 234B and 234C of the Act.
21. At the time of hearing, the learned counsel for the assessee submits that the assessee com pan y being a non- resident, all payments made to it are subject to tax deduction at source under section 195 of the Act, therefore, the assessee is not liable to pay advance tax and hence the AO was not justified in charging interest under sections 234B and 234C and for this proposition the reliance was placed on the following decisions :
Sr.No. Judici al Precedent Citati on 1 DDIT (IT)3(2) V/s ITA No.2920/M/2005
Bechtel International Inc. A.Y.2001-02, order dated 21.4.2006 2 DIT Vs. M/s NGC (2009) (313 ITR 187)(Bom) Network Asia LLC 3 DIT V.Jacabs Civil (2010)(235 ITR 123)(Del) Incorporated 4 Motorola Inc.V.Dy. CIT (2005)95 ITD269(Del)(SB) 5 DDIT V.TUV (2011) 43 SOT Management Services 23(Mum)(URO) GMBH ITA No.4120/Mum/2007 16 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) He also placed on record the copy of the above decisions.
22. On the other hand, the learned D.R. supports the order of the AO and the learned Commissioner of Income Tax (A).
23. W e have carefully considered the submissions of the rival parties and perused the material available on record. W e find that there is no dispute that the assessee compan y is a non-resident and all the paym ents are m ade to it are subject to deduction of tax at source under secti on 195 of th e Act.
24. In M/s NGC Network Asia LLC, (supra) it has been held that when the duty is cast on the payer to deduct tax at source, on failure of the payer to do so, no interest can be imposed on the payee assessee under section 234B of the Act.
Respectfull y following the decision of the Hon'ble Jurisdictional High Court in M/s NGC Network Asia LLC, (supra), and consistent view we are of the view that there is no default on the part of the assessee and hence no interest can be charged under sections 234B and 234C of the Act and the same is deleted. The ground taken by the assessee is therefore allowed.
25. Ground No.5.1 to 5.4 read as under :
ITA No.4120/Mum/200717 ITA No.2188/Mum/2010
( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) "Settlement of clai ms 5.1 The appellant submit that no demand can be raised upon them by virtue of the duly executed and legall y binding Deed of Release signed on July 12,2005 by the Government of the Republic of India (hereinafter referred to as "GOI") (Ministry of Finance). In accordance with the GOI Deed of release, no claims/demands for taxes or tax assessments, rel ating to the Dabhol Power Project, in excess of US$3million, including amounts already paid, can any longer be made upon the appellant, as described fully in the terms of said GOI Deed of Release.
5.2 The GOI has agreed that in the GOI Deed of Release to secure the cooperation of its Affiliates, including but not limited to all Indian Central, State, Local or other governmentat subdivisions, organs, instrumentalities, or agents, to accom plish the items and objective mentioned in 5.1 5.3 The AO has therefore erred in raising a demand of Rs.1,35,88,083 under section 143(3) of the Act on the appellant relating to the Dabhol Power Project, contrary to the GOI Deed of Release as described above.
5.4 The appellant therefore prays that the AO be directed suitably in this matter to reverse completel y and to withdraw said order and demand for additional taxes as described in 5.3"
26. At the tim e of hearing, the learned counsel for the assessee while admitting that the above issue was not raised bef ore the AO and the learned Commissioner of Incom e Tax (A) submits that the Tribunal in assessee's own case in M/s.Bechtel International Inc., USA, V/s The Deputy Director of Income Tax, International Taxation-3(2) in I.T.A. No.2126/Mum/05 (AY-2001-02) order dated 21.1.2009 after admitting the similar issue has set aside the matter to the file of the AO. Theref ore, in view of the sai d order of the ITA No.4120/Mum/2007 18 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) Tribunal, the issue is a legal issue and therefore the same be admitted and the issue may be restored back to the file of the AO.
27. On the other hand, the learned D.R. supports the order of the AO and the learned Commissioner of Income Tax (A).
28. Having carefully heard the submissions of the rival parties and perusing the material available on record we find merit in the plea of the learned counsel for the assessee that the Tribunal in the assessee's own case (supra) has admitted the similar issue and restored the m atter to the file of the AO. The relevant paragraphs 4 and 5 are reproduced below as under :
"4. The learned counsel for the assessee stated before us that subsequent to the decision of the CIT(A), there has been a development, which is required to be taken into consideration for disposal of the appeal. It has been pointed out that there was a Settlement Agreement between the various parties and subsequent to the settlem ent, the Government of India has executed a Deed of Rel ease dated 12 t h July, 2005, by virtue of which the Government of India has agreed that tax liability on the settlem ent payments [as defined in settlement agreem ent] the transactions contemplated and claim being compromised thereby would in the event it exceeds 3 million US $ be paid by Maharashtra Power Development Corporation Ltd. and no claim shall be made against Bechtel parties for any such additional am ounts. Copies of the Settlement Deed and Governm ent of India's Deed of Release have been placed on record. It has been contended that the assessee has paid more than 3 million US $ by way of tax and therefore, no further tax is payable by the assessee in respect of the transactions.ITA No.4120/Mum/2007
19 ITA No.2188/Mum/2010
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5. The parties before us agreed that the issues raised in the grounds of appeal deserve to be restored to the file of the Assessing Officer for the purpose of examining the claim of the assessee that in the light of the Deed of Release by the Government of India and the Settlement Agreement, the additions made b y the Assessing Officer are rendered inconsequential, in so far as no tax would be payable by the assessee in excess of 3 million US $. W e accordingly restore the grounds of appeal raised before us to the file of the Assessing Officer for t he purpose of examining the cl aim of the assessee and taking a decision in accordance with law. The decision of the CIT(A) as well as that of the Assessing Officer on the issues raised before us are set aside as above."
In the absence of any disti nguishing features brought on record by the Revenue, we respectfully following the order of the Tribunal in the assessee's own case (supra) adm it the legal issue raised by the assessee at this stage and send back the m atter to the file of the AO to decide the sam e afresh in the light of the directions given by the Tribunal (supra) and according to law after providing reasonable opportunity of being heard to the assessee. Grounds taken by the assessee are theref ore partly allowed for statistical purpose.
ITA No.2188/Mum/2010 (AY:2005-06)
29. Ground No.1 is against the sustenance of disallowance of expenses of Rs.23,40,696/- of Dabhol Project Office.
30. At the time of hearing, both the parties have agreed that the facts of the present issue are similar to the facts of ITA No.4120/Mum/2007 20 ITA No.2188/Mum/2010 ( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06) Ground No. 1 raised by the assessee in the appeal for the assessment year 2003-04, therefore, plea taken by them in the said appeal be considered while deciding the above ground.
31. Having carefully heard the submissions of the rival parties and perusing the material available on record and in the absence of any distinguishing feature brought on record by the Revenue, we f ollowing our findi ngs recorded in paragraph 16 of this order, delete the disallowance of expenses of Rs.23,40,696/- made by the AO and sustained by the l earned Commissioner of Income Tax (A). The ground taken by the assessee is, therefore, allowed.
32. Ground No.2 is against the sustenance of disallowance of Sales Tax Expenses of Dabhol Project Office, Ground No.3 is against the sustenance of disallowance of Haldia Project Office and Ground No.4 is against the set off of carried forward unabsorbed depreciation and business loss.
33. At the time of hearing, the learned counsel for the assessee submits that he does not want to press aforesaid grounds No.2,3 and 4 which was not objected to by the learned DR .
ITA No.4120/Mum/200721 ITA No.2188/Mum/2010
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34. That being so and in the absence of any other supporting m aterials placed on record by the learned counsel for the assessee, the grounds No.2,3 and 4 taken by th e assessee are therefore, rejected bei ng not pressed.
35. In the result, the assessee's appeal for the assessment year 2003-04 is partly allowed for statistical purposes and the appeal for the assessment year 2005-06 is partly allowed.
Order pronounced in the open court on 8th June, 2011.
Sd Sd
(R.K.P ANDA) (D.K. AG AR WAL)
ACCOUNTAN T M EMBER JUDICI AL MEM BER
Mumbai, Dated 8th June, 2011
SRL
copy to:
1. Appellant
2. Respondent
3. CIT Concerned
4. CIT(A) concerned
5. DR concerned Bench
6. Guard file.
True copy BY ORDER
ASSTT. REGISTRAR,
ITAT, MUMBAI
ITA No.4120/Mum/2007
22 ITA No.2188/Mum/2010
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IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES, 'G', MUMBAI
BEFORE S/SHRI D.K. AG ARW AL (JM) AND R.K.P AND A (A.M) ITA No.4120/M um/2007 (Assessment Year: 2003-04) Bechtel International Inc., The Assistant Director of USA, Incom e Tax, C/o KPMG, International Taxation-3(1), 1st Floor, V/s Scindia House, Lodha Excellus, 1 s t Floor, Apollo Mills Com pound, Ballard Estate, N.M.Joshi Marg, Mumbai-400038 Mahalaxmi, Mumbai-400011.
P AN: AAACB6149A
APPELLAN T RESPONDENT
ITA No.2188/M um/2010
(Assessment Year: 2005-06)
Bechtel International Inc., The Assistant Director of
USA, Incom e Tax,
C/o KPMG, International Taxation-3(2),
1st Floor, V/s Scindia House,
Lodha Excellus, 1 s t Floor,
Apollo Mills Com pound, Ballard Estate,
N.M.Joshi Marg, Mumbai-400038
Mahalaxmi,
Mumbai-400011.
P AN: AAACB6149A
APPELLAN T RESPONDENT
Appellant by : S/Shri Sunil M.Lala and Pankaj Bagri
Respondent by : Shri.Pavan Ved
CORRINGENDUM
PER D.K. AGAR WAL (JM)
ITA No.4120/Mum/2007
23 ITA No.2188/Mum/2010
( AY s : 2 0 0 3- 0 4 a n d 20 0 5- 06)
In the Tribunal order dated 8.6.2011, passed in the captioned appeals at page No.1 for "Appellant by Shri Sunil M.Lala and Respondent by Shri Pankaj Bagri" read "Appellant by S/Shri Sunil M.Lala and Pankaj Bagri and Respondent by Shri Pavan Ved"
Sd sd
(R.K.P ANDA) (D.K. AG AR WAL)
ACCOUNTAN T M EMBER JUDICI AL MEM BER
Mumbai, Dated 10 th June, 2011
SRL
copy to:
1. Appellant
2. Respondent
3. CIT Concerned
4. CIT(A) concerned
5. DR concerned Bench
6. Guard file.
BY ORDER
True copy
ASSTT. REGISTRAR,
ITAT, MUMBAI