INCOME TAX ACT, 1961

Section 44BBB

Presumptive taxation under section 44BBB - Income from civil construction or turnkey project - All requirements under section 44BBB(2) fulfilled -

Assessee was a foreign company engaged in execution of turnkey projects. It availed the benefit of provision of sub-section (2) of section 44BBB while filing its return. AO alleged that assessee did not follow correct method of determining stage of completion of contract and accounts of the assessee were also not reliable. Thus, AO after putting assessee to notice, rejected its accounts and taxed assessee under sub-section (1) of section 44BBB. Held: As decided in assessee's own case, it was held that action of AO in rejecting books of accounts of assessee and estimating income was not sustainable. Assessee had pointed out to the AO that the true cost of the project was estimated on the basis of experience of the assessee in executing similar works in the past. The entire project was completed and the total income was offered to tax. It was further held that assessee rightly and legitimately offered income under section 44BBB(2). Action of AO in making alternative addition under section 44BBB(1) was not justified. Addition made by AO by rejecting the books of accounts and estimating income under section 44BBB(1) was deleted.

Followed:The Assistant Director of Income Tax (International Taxation), Ahmedabad v. Shandong Tiejun Electric Power Engineering Co. Ltd. 2017 TaxPub(DT) 0297 (Ahd-Trib) CIT (International Taxation and Transfer Pricing) v. Shandong Tiejun Electric Power Engineering Co. 2017 TaxPub(DT) 4356 (Guj-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2011-12 to 2013-14

INCOME TAX ACT, 1961

Section 92C

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