2018 (12) TMI 285 - AT - Income Tax

Tribunal Upholds Exemption, Assessee Wins Appeals

M/s VIL Limited, (Formerly Vijay Infrastructure Ltd.) And M/s Vijay Infrastructure Ltd Versus A.C.I.T., Central Circle-1 And Dy. C.I.T., Lucknow

M/s VIL Limited, (Formerly Vijay Infrastructure Ltd.) And M/s Vijay Infrastructure Ltd Versus A.C.I.T., Central Circle-1 And Dy. C.I.T., Lucknow - TMI Issues Involved:1. Exemption under Section 80IA of the Income Tax Act.2. Rejection of books of accounts under Section 143(3)/144.3. Disallowance of depreciation on shuttering material.4. Addition of advance made to NCC-VEE (JV).5. Disallowance of expense towards work contract and other tax.6. Addition under the head sundry creditors.7. Opportunity to present evidence and compliance.8. Deduction under Chapter VI-A on enhanced income.Detailed Analysis:1. Exemption under Section 80IA of the Income Tax Act:The Revenue's appeal contested the CIT(A)'s decision to allow the assessee's claim under Section 80IA. The Tribunal found that the issue had already been settled in favor of the assessee by its earlier order, which was confirmed by the Allahabad High Court and the Supreme Court. The Tribunal reiterated that the assessee was not a mere contractor but a developer, having made substantial investments and undertaken significant risks. The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision.2. Rejection of Books of Accounts under Section 143(3)/144:The assessee's appeal included a ground challenging the rejection of its books of accounts. However, this ground was not argued by the assessee's representative and was therefore dismissed as not pressed.3. Disallowance of Depreciation on Shuttering Material:The assessee contested the disallowance of depreciation on shuttering material purchased from Shyam Steel Industries. The CIT(A) had upheld the disallowance due to the assessee's failure to produce purchase bills during remand proceedings. The Tribunal decided to give the assessee another opportunity to produce the relevant purchase bills and remanded the issue back to the Assessing Officer for reconsideration.4. Addition of Advance Made to NCC-VEE (JV):The assessee challenged the addition of an advance made to NCC-VEE (JV). The Tribunal admitted additional evidence—a memorandum of agreement requiring the assessee to pay 4% of gross receipts to NCC-VEE (JV)—which had not been presented to the lower authorities. The Tribunal remanded the issue back to the Assessing Officer for re-evaluation in light of the additional evidence.5. Disallowance of Expense Towards Work Contract and Other Tax:The assessee disputed the disallowance of expenses related to work contract and other taxes, amounting to Rs. 3,69,70,315/-. The CIT(A) had upheld the disallowance due to insufficient evidence. The Tribunal noted that the assessee had submitted detailed tax break-ups and remanded the issue back to the Assessing Officer for re-examination.6. Addition Under the Head Sundry Creditors:The assessee contested additions made due to non-confirmation of sundry creditors. The CIT(A) had allowed partial relief, but upheld some additions due to unserved notices. The Tribunal found that the assessee had made payments through banking channels and had confirmations from creditors. The Tribunal remanded the issue back to the Assessing Officer for fresh adjudication.7. Opportunity to Present Evidence and Compliance:The assessee argued that it was not given sufficient opportunity to present its case. The Tribunal's decision to remand several issues back to the Assessing Officer implicitly addressed this concern, ensuring the assessee would have another chance to provide necessary evidence.8. Deduction Under Chapter VI-A on Enhanced Income:The assessee raised an additional ground for deduction under Chapter VI-A on any enhanced income resulting from disallowed expenditures. The Tribunal referred to a CBDT Circular which supports such deductions and remanded this issue back to the Assessing Officer for consideration.Conclusion:The Tribunal dismissed the Revenue's appeal and partly allowed the assessee's appeal for statistical purposes, remanding several issues back to the Assessing Officer for re-evaluation. The assessee was given another opportunity to present relevant evidence and argue for deductions on enhanced income.