Law:

Section:

Section 44BBB of the Income-tax Act, 1961 - Foreign companies, civil construction business in case of - Assessment year 1994-95 - Whether unless and until amount is paid or payable to assessee during relevant year, revenue cannot invoke section 44BBB - Held, yes FACTS The assessee was a non-resident company. It entered into an agreement with 'NLC' on 8-6-1981 for unloading, erection, testing and commissioning of three steam turbine generators with ancillaries. The work in respect of the contract was completed by the assessee by 30-4-1989. For the assessment year 1994-95, the assessee had filed its return of income declaring nil income. In respect of the earlier assessment years, viz., 1982-83 to 1993-94, the assessee had submitted return of income declaring loss which had been accepted by the department. However, later by applying rule 10 of the Income-tax Rules, the Assessing Officer took the view that for the abovesaid assessment years, the profit and loss would be ascertained and assessed on completion of entire contract work and, therefore, said assessments were closed as 'NA' (No Assessment) and the assessee was asked to submit the consolidated profit and loss account for the period from 1-1-1981 to 31-3-1994. Accordingly, the assessee filed return of income for the relevant assessment year showing certain loss. The Assessing Officer, however, applied the provision under section 44BBB and levied tax of 10 per cent on the payment made by NLC to the assessee during earlier assessment years. The Commissioner (Appeals) allowed the assessee's appeal holding that section 44BBB would not apply to assessee's case inasmuch as works in respect of contract were completed by assessee by 30-4-1989, i.e., prior to date of coming into force of provisions of section 44BBB. The Tribunal upheld the order of the Commissioner (Appeals). On revenue's appeal to the High Court : HELD Section 44BBB was inserted with effect from 1-4-1990 and it was applicable for the assessment year 1990-91 and subsequent years. [Para 6] In the instant case, the completion of contract was prior to coming into force of the provisions of section 44BBB. It was also considered by the authorities below…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492