IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN THURSDAY, THE 5TH NOVEMBER 2009 / 14TH KARTHIKA 1931 ITA.No. 253 of 2009() --------------------- ITA.248/COCH/2009 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.GEORGE K. GEORGE, SC FOR IT SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): APPELLANT ------------------------ M/S.P.P.XAVIER & CO., PADIYANCHERIL, CHACKALAKKAL ROAD, PERUMANOOR, KOCHI-15. BY ADV. SRI.S.VIJAYAN NAYAR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 5.11.2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N. RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. ---------------------------------------- ITA. No.253 OF 2009 ---------------------------------------- Dated, the 5th day of November , 2009 JUDGMENT Ramachandran Nair, J. The question raised in the departmental appeal is whether the Tribunal was justified in treating the compensation awarded by the Arbitrator in respondent's case is a contract amount eligible for assessment under Section 44 AD of the Income Tax Act. 2. We have heard the Standing Counsel appearing for the appellant and Sri S.Vijayan Nair, counsel appearing for the respondent. 3. Even though the Standing Counsel contended that the award amount is not contract amount to be assessed under section 44AD, we are unable to accept this position because, the award is granted invariably based on escalation clause containing in contract. Therefore, the award amount is nothing but ITA No.253/09 -:2:- enhancement of contract amount. Counsel for the assessee submitted that the assessee is following cash system of accounting and the same is accepted by the officer. It is on record that gross receipt is assessed under section 44AD. Therefore, the Tribunal rightly allowed the claim for estimation of income at 8% of the gross receipt including the award amount. Consequently, we dismiss the appeal. C.N.RAMACHANDRAN NAIR JUDGE V.K.MOHANAN, JUDGE kvm/- ITA No.253/09 -:3:- V.K.MOHANAN, J. O.P.No. JUDGMENT Dated:..