UHDE INDIA P. LTD,MUMBAI vs. ADDL CIT RG 10(3), MUMBAI

माननीय ौी श""जीत दे, "याियक सदःय एवं माननीय एवं माननीय माननीय एवं एवं माननीय माननीयौीमनोजकुमारअमवाल, लेखासदःयकेसम"। माननीय माननीय BEFORE HON’BLE SHRI SAKTIJIT DEY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ (िनधा"रणवष" / Assessment Year: 2006-07) Thyssenkrupp Industrial Solutions Additional Commissioner of (India) Private Limited Income Tax, Range-10(3) बनाम/ [CIN : U74200MH1977PTC020041] Mumbai [formerly known as Uhde India Private Ltd.] Vs. Uhde House, L.B.S.Marg Vikhroli (West),Mumbai-400 083 "थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACU-1416-H (अपीलाथ"/Appellant) (""थ" / Respondent) : Percy Pardiwala,M.M.Golvala, Ld. ARs Assessee by : Vidisha Kalra, Nitin R. Waghmode, Ld. DRs Revenue by : सुनवाईकीतारीख/ : 18/01/2019 Date of Hearing घोषणाकीतारीख / : 09/04/2019 Date of Pronouncement आदेश / O R D E R Per Manoj Kumar Aggarwal (Accountant Member)

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 (Appeals) 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 were 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 3 Thyssenkrupp Industrial Solutions (India) Pvt. Ltd. Assessment Year :2006-2007 “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 4 Thyssenkrupp Industrial Solutions (India) Pvt. Ltd. Assessment Year :2006-2007 (India) Private Limited videcertificate of incorporation pursuant to change of name issued by