IRB INFRASTRUCTURE LTD Vs. ITO
INCOME TAX APPELLATE TRIBUNAL
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A.K. Garodia, Accountant Member -
(1.) THIS is an assessee's appeal directed against the order of learned CIT(A)-VI, Mumbai dated 18.2.2005 for A.Y. 2001-02.
(2.) Grounds raised by the assessee read as under:
1a) On the facts and circumstances of the case and in law, learned CIT(A) erred in upholding the rejection made by the Assessing Officer of accounting policy in respect of completed contract method for infrastructure project under BOT scheme with Toll rights and thereby further erred in confirming the addition of Rs. 1,32,19,906/- made by the Assessing Officer to the income of the appellant on account of so called profit arise during the previous year from the said infrastructure project.
b) The learned CIT(A) failed to appreciate that:
i) The Assessing Officer has erred in treating the BOT contract with toll rights as building contract.
ii) No accounting standard has been prescribed by the ICAI or CBDT Under Section 145.
iii) The method of accounting adopted by the Assessing Officer taking toll collection and allowing deduction for amortisation of the value of cost of construction suffers from serious defects in view of uncertainly of the consideration and unforeseen losses.
iv) The appellant had consistently following the completed contract method and reported this accounting policy since beginning; and
v) The impugned project could be said to have been completed at the end of the concessional period or at the earliest when specific costs of the project have been recouped for the reason that the project is linked with toll collection and the project can be said to have been substantially completed when the cost of the project is considerably recouped.
c) In reaching to the conclusion and confirming such huge addition, learned CIT(A) omitted to consider relevant factors, considerations, principles and evidences while he was overwhelmed, influenced and prejudiced by irrelevant considerations and factors.
2. The learned CIT(A) erred in not passing any speaking order in respect of losses of earlier years to be calculated as per accounting policy adopted by the Assessing Officer in making the assessment for the A.Y. 2001-02.
The learned CIT(A) erred in not allowing depreciation on the cost of construction of bridge in computing profit arise from the impugned project.
(3.) THE learned CIT(A) failed to appreciate that the Assessing Officer has erred in charging interest Under Section 234B and 234C.;
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