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

The ITAT Delhi remanded multiple issues back to the AO for fresh consideration. The tribunal allowed the assessee's appeal for statistical purposes regarding brought forward losses, directing the AO to consider the grievance after verification. The deduction under section 80IA(4)(i) was allowed following the assessee's own case precedent for AY 2016-17. Issues regarding expense deduction under section 40(a)(ia), transfer pricing adjustment, and retention money under section 43CB were remanded for fresh adjudication by the AO with adequate hearing opportunity. TDS credit verification was directed to be reconsidered, and interest under section 234B was to be recomputed accordingly.

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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 Income

The 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 Loss

The 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 Adjustment

The 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 Money

The 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 Money

The 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 Contribution

This ground was dismissed as not pressed by the assessee.

Issue 9: Incorrect Credit of TDS

The 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 234B

The 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.

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