2024 (2) TMI 580 - AT - Income Tax

ITAT remands multiple tax issues including section 80IA deduction and transfer pricing for fresh consideration

M/s BSC C&C Joint Venture Versus DCIT, Circle-61 (1), Delhi

The ITAT Delhi remanded multiple issues back to the AO for fresh consideration. The tribunal allowed the assessee's appeal for statistical purposes ... Disallowing brought forwards loss - declaration by the assessee in the revised computation of income filed during the assessment proceedings - HELD THAT:- As submitted recently the ITAT, Delhi vide its order [2023 (11) TMI 1223 - ITAT DELHI] in assessee’s own case for AY 2017-18 has decided the appeal by partly allowed the appeal for statistical purposes and AO is yet to get effect to order passed by the Tribunal for AY 2017-18. Hence, we direct the AO to consider the assessee’s grievance and take remedial action as per law after due verification and allowing a reasonable opportunity of hearing to the assessee. As a consequence, the Ground No. 2 is allowed for statistical purposes. Disallowance of deduction u/s 80IA(4)(i) - Contractees, who have allotted work of infrastructural facility to the appellant, are not recognised u/s 80IA(4)(1)(b), and Appellant is merely a contractor and not a 'developer' - HELD THAT:- As relying on assessee’s own case for AY 2016-17 [2023 (11) TMI 1223 - ITAT DELHI] we decide Ground in favour of the assessee holding that the assessee is eligible to claim the impugned deduction under section 80IA of the Act. Addition on deduction of expenses u/s. 40(a)(ia) - AO has started the computational process from the total income disclosed by the assessee in the revised computation of total income filed during the course of assessment - as argued Excess deduction was suo moto disallowed by the assessee in the revised computation of total income, hence, according to him, no such disallowance was again called for once starting point was the Revised Computation of total income - HELD THAT:- After hearing both the sides on the issue, we find the plea of the assessee’s AR to be reasonable and accordingly, we direct the Assessing Officer to examine the assessee’s plea and take remedial action, if any, as per law, after giving adequate opportunity of being heard to the assessee. Accordingly, the Ground No. 4 is allowed for statistical purposes. TP Adjustment under Chapter X - adjustment on account of alleged interest receivable on advance given - HELD THAT:- Following the aforesaid precedent [2023 (11) TMI 1223 - ITAT DELHI], we send the matter back to the AO for deciding the issue afresh keeping in view the evidence submitted by the assessee as also the observations of Kusum Health Care (P) Ltd. [2017 (4) TMI 1254 - DELHI HIGH COURT] and as per law. Retention money retained by the employer - Addition made as retention money is received by the assessee and hence, no deduction is allowable to the assessee - as submitted that on the issue of retention money, Finance Act, 2018 has inserted provisions of Section 43CB w.e.f. 1.4.2017 - HELD THAT:- Since effect of this statutory insertion have not been considered by both the lower authorities, hence, matter requires a fresh adjudication by the AO in accordance with law - similar issue came for consideration before the ITAT and the Tribunal vide its order dated [2023 (11) TMI 1223 - ITAT DELHI] in assessee’s own case for AY 2017-18 has set aside the matter back to the AO for a fresh adjudication. TDS credit - AO has allowed the credit less as allowable to the assessee according to the income offered for taxation for which complete details and reconciliation was filed during the assessment proceedings - As it is a matter of verification, therefore, we direct the AO to consider assessee’s claim and after due verification take remedial action in accordance with law. Accordingly, the Ground is allowed for statistical purposes. Levy of interest u/s. 234B is consequential in nature, hence, AO is directed to re-compute the interest u/s. 234B, if any, afresh in accordance with Issues Involved:1. Incorrect assessment of total income.2. Non-allowance of brought forward loss.3. Disallowance of deduction under section 80IA(4)(i).4. Addition on account of disallowed expenses under section 40(a)(ia).5. Transfer Pricing Adjustment.6. Addition on account of retention money.7. Non-reduction of taxed retention money.8. Disallowance on account of late deposit of EPF Contribution.9. Incorrect credit of TDS.10. Incorrect charging of interest under section 234B.Summary:Issue 1: Incorrect Assessment of Total IncomeThe AO erred in assessing the total income of the appellant at Rs. 49,81,91,872/- against a returned total loss of Rs. 2,18,13,119/-. The Tribunal found the issues covered by the decisions in the assessee's own case for previous years and disposed of the appeal accordingly.Issue 2: Non-Allowance of Brought Forward LossThe AO did not allow brought forward loss of Rs. 13,65,60,299/- as declared in the revised computation of income. The Tribunal directed the AO to consider the assessee's grievance and take remedial action after due verification, following the precedent set in the assessee's own case for AY 2017-18.Issue 3: Disallowance of Deduction under Section 80IA(4)(i)The AO disallowed the deduction of Rs. 66,14,49,535/- under section 80IA(4)(i), holding that the appellant was merely a contractor and not a developer. The Tribunal, following its decisions for AY 2016-17 and AY 2017-18, held that the assessee is eligible for the deduction under section 80IA and allowed the ground.Issue 4: Addition on Account of Disallowed Expenses under Section 40(a)(ia)The AO made an addition of Rs. 19,40,67,731/- on account of disallowed expenses under section 40(a)(ia). The Tribunal found a computational error and directed the AO to examine the plea and take remedial action after giving the assessee an opportunity of being heard.Issue 5: Transfer Pricing AdjustmentThe AO/TPO made an adjustment of Rs. 34,10,057/- on account of alleged interest receivable on advance given to M/s BSC C&C JV Nepal Pvt. Ltd. The Tribunal, following its decision for AY 2016-17 and AY 2017-18, set aside the matter back to the AO/TPO for fresh adjudication.Issue 6: Addition on Account of Retention MoneyThe AO made an addition of Rs. 13,14,55,586/- on account of retention money retained by the employer. The Tribunal, following its decision for AY 2017-18, sent the matter back to the AO for fresh adjudication in light of the provisions of Section 43CB inserted by Finance Act, 2018.Issue 7: Non-Reduction of Taxed Retention MoneyThe Tribunal directed the AO to consider the assessee's claim regarding the non-reduction of the amount taxed on account of retention money released during the year and take remedial action as per law.Issue 8: Disallowance on Account of Late Deposit of EPF ContributionThis ground was dismissed as not pressed by the assessee.Issue 9: Incorrect Credit of TDSThe AO allowed credit of TDS of Rs. 5,81,54,096/- instead of Rs. 8,83,45,732/-. The Tribunal directed the AO to verify the claim and take remedial action in accordance with law.Issue 10: Incorrect Charging of Interest under Section 234BThe AO charged interest under section 234B at Rs. 5,98,77,428/- instead of Rs. 5,85,15,593/-. The Tribunal directed the AO to re-compute the interest u/s. 234B afresh in accordance with law.Conclusion:The appeal was partly allowed for statistical purposes, with several issues being remanded back to the AO for fresh adjudication and verification.