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The Tax Publishers Bechtel International Inc. v. DDIT [ITA Nos. 39, 650/Mum/2007, Cross Objection No. 122/Mum/2007, dt. 30-10-2015] : 2015 TaxPub(DT) 5173 (Mum-Trib) Compensation when accruing *Facts:* Assessee was one of the consortium players in the Dhabol Power Project which went bankrupt following Enron collapse. Thus compensation was claimed by the assessee for contract completion and de-mobilization. The amounts were reported in the Profit and Loss account but were not offered to tax. The assessing officer taxed the whole completion amount and the de-mobilization compensation, the Commissioner (Appeals) taxed the completion cost and did not tax the demobilization compensation claimed. On further appeal: Held in favour of the assessee that the whole compensation was not taxable as there was no confirmation of recoverability of both amounts.

The Tax Publishers

Bechtel International Inc. v. DDIT [ITA Nos. 39, 650/Mum/2007, Cross Objection No. 122/Mum/2007, dt. 30-10-2015] : 2015 TaxPub(DT) 5173 (Mum-Trib)

Compensation when accruing

Facts:

Assessee was one of the consortium players in the Dhabol Power Project which went bankrupt following Enron collapse. Thus compensation was claimed by the assessee for contract completion and de-mobilization. The amounts were reported in the Profit and Loss account but were not offered to tax. The assessing officer taxed the whole completion amount and the de-mobilization compensation, the Commissioner (Appeals) taxed the completion cost and did not tax the demobilization compensation claimed. On further appeal:

Held in favour of the assessee that the whole compensation was not taxable as there was no confirmation of recoverability of both amounts.