आयकर अपीलीय अिधकरण, ’डी’ (cid:1)यायपीठ, चे(cid:9)ई।

IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI (cid:1)ी एबी टी. वक(cid:10), (cid:11)ाियक सद(cid:17) एव ं

(cid:1)ी अिमताभ शु(cid:24)ा, लेखा सद(cid:9) के सम(cid:27)

BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.927/Chny/2024 िनधा(cid:14)रण वष(cid:14)/Assessment Year: 2018-19 Foster Wheeler (G.B.) Ltd., v. The DCIT, 6^th Floor, Zenith Building, International Taxation – Ascendas IT Park, CSIR Road, Circle-1(1), Taramani, Chennai-600 113. Chennai.

[PAN: AABCF 3459 N (अपीलाथ(cid:22)/Appellant) ((cid:23)(cid:24)यथ(cid:22)/Respondent)

अपीलाथ(cid:22) क(cid:26) ओर स / े Appellant by : Mr.Ashik Shah, CA (cid:23)(cid:24)यथ(cid:22) क(cid:26) ओर स े /Respondent by : Mr.Nathala Ravi Babu, CIT सुनवाईक(cid:26)तारीख/Date of Hearing : 18.09.2025 घोषणाक(cid:26)तारीख /Date of Pronouncement : 04.11.2025 आदशे / O R D E R PER ABY T. VARKEY, JM:

This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Chennai-16, dated 05.02.2024 for the Assessment Year (hereinafter referred to as "AY”) 2018-19.

2. The sole grievance of the assessee is against the order of the lower authorities denying the exclusion of the provision written back on account of reversal of liquidated damages of ₹38,26,09,477/-.

3. The facts as noted by us are that, the assessee company M/s. Foster Wheeler G.B. Limited is a foreign company incorporated in the United Kingdom and part of the Amec Foster Wheeler Group. The assessee had entered into a contract dated 18-03-2009 with Indian Oil Corporation Limited (IOCL) for rendering engineering design and project management services for the IOCL Paradip Refinery Project for a value of ₹609,51,52,365/-. For rendering these services, the assessee has set up a project office in India and admitted the same as a Permanent Establishment (PE) in India. Likewise, the assessee had also obtained contract from M/s Reliance Industries Limited on 09-10-2012 for contract value of ₹109,60,00,000/-. Accordingly, the assessee maintains the books of accounts in respect of M/s. Foster Wheeler GB India Project Office and files return of income as a Project office offering the income earned in India to tax.

4. A survey operation u/s.133A and 133(2A) of the Income Tax Act, 1961 was conducted upon the assessee on 21-08-2017. The assessee company filed return of income for AY 2018-19 on 30-11-2018 declaring total income of ₹156,33,27,970/-. Consequent to the survey findings and re-opening of assessment proceedings for various other AYs, the assessee filed an application before Income Tax Settlement Commission (ITSC) dated 15.05.2019 for the AYs 2011-12 to 2018-19. However, vide the Finance Act, 2021, the ITSC ceased its operation with effect from February 1, 2021 and Interim Board of settlement ("IBS") was constituted for settlement of pending cases. And in this regard, Section 245M of the Act was inserted, providing an option to withdraw the pending applications before the ITSC within three months from the date of commencement of the Finance Act, 2021, which was extended till July 31, 2021 vide CBDT Circular No. 12/2021 dated June 25, 2021. In view of the above, the assessee is noted to have withdrawn its application before the ITSC by filing Form 34BB as required under section 245M of the Act read with Rule 44DA on July 30, 2021.

5. Consequent to the above, the AO completed the income-tax assessment for AY 2018-19 accepting the returned income of ₹1,56,33,27,970/- vide assessment order u/s.143(3) of the Act dated 27.07.2022. Thereafter, the assessee is noted to have filed an appeal before the Ld. CIT(A) wherein the assessee inter alia raised claim for exclusion of reversal of liquidated damages to the tune of ₹41,41,65,777/-, out of the total reversal of ₹59,50,60,777/-. The plea of the assessee was that, though the provision for liquidated damag