RAJES KUMAR,J. - (1.) THESE two appeals under Section 260 -A of the Income -tax Act (hereinafter referred to as 'the Act') both relating to the assessment year 1989 -90 are directed against the order of the Tribunal dated 22 -1 -2002 in ITA No. 2426/A11./1992.
(2.) IN appeal No. 26 of 2002, the following questions have been raised: I. Whether the Income -tax Appellate Tribunal committed substantial error of law in disallowing the deduction of Rs. 23,63,140 as claimed by the assessee -appellant, by ignoring the material and vital evidence on record relating to the case of the assessee and by proceeding on incorrect and incomplete legal and factual promise in regard to its having received lesser payment for untrained and inexperienced staff, numbering 69, as trainees under a new and modified contract after the contractor had refused to accept them under the original contract ? II. Whether the Income -tax Appellate Tribunal committed substantial error of law in overlooking and not appreciating and considering the contents of the correspondence relating to the subsequent agreement for accepting the untrained and inexperienced staff, number 69, as trainees ? III. Whether the Income -tax Appellate Tribunal committed substantial error of law in not appreciating that the aforesaid deduction of Rs. 23,63,140 was under a fresh agreement in modification to the basis agreement dated 24 -9 -1987 on the subsequent proposal of the assessee ? IV. Whether the Income -tax Appellate Tribunal committed substantial error of law in holding that the acceptance of lesser amount to the extent of Rs. 23,63,140 was a device to reduce the tax liability of the assessee inasmuch as there is no evidence, direct or circumstantial, in support of such view ? V. Whether the Income -tax Appellate Tribunal committed substantial error of law in proceeding on the premise that the personnel, numbering 69, supplied by the assessee was trained and experienced as stipulated in the agreement ? VI. Whether the Income -tax Appellate Tribunal committed substantial error of law in relying upon to the judgment of the Supreme Court in the case of McDowell & Co. v. CTO : [1985]154ITR148(SC) inasmuch as on the facts of the present case, which are not in dispute, the proposition of law laid down in that case does not apply ? VII. Whether the Income -tax Appellate Tribunal committed substantial error of law in not appreciating and applying the law laid down in the following cases to the case of assessee: (i) CIT v. Nandkishore : [1994]208ITR14(Guj) (ii) CIT Kanpur v. U.B.S. Publishers & Distributors : [1984]147ITR114(All) . (iii) 69 ITR 86 (SC) (iv) 55 ITD38 (v) : [1962]46ITR144(SC) . VIII. Whether the Income -tax Appellate Tribunal committed substantial error of law in not accepting the contention of the appellant that the appellant was wholly free to modify the contract dated 24 -9 -1987 and or to enter into a fresh contract during the currency of the contract itself relating to the acceptance of labour as well as the consideration in regard thereto ? IX. Whether the Income -tax Appellate Tribunal substantially erred in proceeding on the premise that the basic agreement of 24 -9 -1987 was registered ? In Appeal No. 16 of 2003, the following questions have been raised: 1. Whether in view of the facts and circumstances the case of the learned ITAT was right in deleting the addition of Rs. 11,34,547 made by CIT(A) after carefully analyzing the agreement? 2. Whether in view of the facts and circumstances of the case the learned ITAT was right in law in holding that word 'Repair' as appearing in the agreements mean only minor repairs and not major repairs and replacement of parts ?
(3.) BRIEF facts of the case -giving rise to the present appeals are that the appellant is a limited company incorporated under the Indian Companies Act. The assessee -company was deriving income from hiring of machines and supply of labourers. M/s. Jaiprakash Associates (a division of Jai Prakash Industries Ltd.) had taken a contract of Civil Engineering works in Sardar Sarover Project (Dam and power houses), Kevadia Colony District Behraich (Gujarat State), Lakhwar and Vyasi Dam at Lakhwar (U.P.), Chamera Project in (H.P.). The assessee -company and M/s. Jai Prakash Associates, entered into an agreement dated 24 -9 -1987 for the supply of some experienced and qualified technical staff for the execution of their project. The assessee had also taken a contract from the Irrigation Department for the construction work of Adit tunnel at Lakhwar Dam as per agreement dated 1 -6 -1985 which was sub -let to Jai Prakash Associates wherein it was agreed to charge three per cent profit from such contract.;