https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=759923 https://www.taxtmi.com/caselaws?id=759923 Deduction u/s 80IA(4) - denial of deduction as assessee cannot be held to be developer and merely a work contractor - AO denied the deduction u/s 80IA(4) by holding assessee to be contractor and hit by newly inserted explanation below Section 80IA(13), but while granting relief to the assessee, CIT(A) did not discuss elaborately about the eligibility or otherwise of the assessee to the deduction u/s 80IA(4) vis- -vis specific work orders executed by the assessee during the year under consideration HELD THAT:- CIT(A) has made general and balled observations while granting deduction to the assessee u/s 80IA(4), which general and balled observations are not sufficient to hold in favour of the assessee. We could have decided the issue ourselves as these appeals are old appeal pending for last more than 12 years, but the material filed before us vide paper books are not sufficient for us to decide the issue . Even tender documents, agreements with the Government for executing the work, PERT chart, financial statements, Men, material and machines deployed, the roles and responsibilities performed by the assessee, details of deployment of funds, details of statutory clearances obtained, penal provisions in the agreements etc. were all not provided in the paper book filed by the assessee. It would be fit and appropriate in the interest of justice and fair play that the matter be restored back to the file of CIT(A) for fresh adjudication of this issue after making detailed analysis of all the specific work executed by the assessee in which the assessee has claimed that it acted as developer and claimed to be eligible for deduction u/s 80IA(4). Assessee as well the AO shall be given opportunity of being heard by the CIT(A), keeping in view principles of natural justice. The evidences filed shall be admitted by ld. CIT(A) in accordance with law. The appeal of the Revenue on this issue is allowed for statistical purposes. Disallowance u/s 14A read with Rule 8D of the Income-tax Rules, 1962, as well disallowance u/s 35D - HELD THAT:- As presumption will apply that the assessee has invested own interest free funds in the securities/JV which yield exempt income. Thus, no disallowance u/s 14A read with Rule 8D(2)(b) is warranted, as available owned interest free funds with the assessee are much higher than the investments made by the assessee which yield exempt income. Reference is drawn to the decision in the case of PCIT v. Sintex Industries Limited [ 2018 (3) TMI 1448 - SC ORDER] wherein Hon ble Supreme Court dismissed SLP arising from Hon ble Gujarat High Court judgment and order in CIT v. Sintex Industries Limited [ 2017 (5) TMI 1160 - GUJARAT HIGH COURT] Disallowance u/s 14A read with Rule 8D(2)(c) as was made by AO and later confirmed by ld. CIT(A) is concerned, we donot find any infirmity in the order passed by ld. CIT(A). So far as contention of the ld. Senior Advocate that if disallowance u/s 14A is confirmed by ITAT, then the assessee will be entitled for higher deduction u/s 80IA(4), we have already restored the issue of disallowance u/s 80IA(4) to the ld. CIT(A) for fresh adjudication, and hence, in the fitness of the things and fair play keeping in view facts and circumstance of the case, this issue to the extent of confirmation of addition u/s 14A read with Rule 8D(2)(c) by us as is confirmed by us vis- -vis higher deduction u/s 80IA(4), is restored to the file of ld. CIT(A) for fresh adjudication. We order accordingly. Disallowance of Preliminary expenses u/s 35D - We do not find any infirmity in the order passed by ld. CIT(A) so far as disallowance is concerned. So far as remaining preliminary expenses are concerned, the AO has observed that these expenses were incurred for increase in authorized capital anad also that no details were furnished. The assessee has filed details with ld. CIT(A), but ld. CIT(A) did not call for the remand report from the AO. There is a brach of Rule 46A of the 1962 Rules. The Rule 46A is not an empty formality. The matters needs to go back to the file of ld. CIT(A) for fresh adjudication, after giving AO as well the assessee, opportunity of being heard in accordance with principles of natural justice. So far as contention of the ld. Senior Advocate that if disallowance u/s 35D is confirmed by ITAT, then the assessee will be entitled for higher deduction u/s 80IA(4), we have already restored the issue of disallowance u/s 80IA(4) to the ld. CIT(A) for fresh adjudication, and hence, in the fitness of the things and fair play keeping in view facts and circumstance of the case, this issue to the extent of confirmation of addition u/s 35D by us as well partly setting aside to the file of ld. CIT(A) for fresh adjudication vis- -vis higher deduction u/s 80IA(4), is restored to the file of ld. CIT(A) for fresh adjudication. Case-Laws Income Tax Fri, 19 Apr 2024 00:00:00 +0530