TaxTMI 
TaxTMI 
2015 (12) TMI 1517
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....ases on 23-09-2009. In response to notice u/s.153A the assessee filed its return of income on 20-07-2010 declaring total income at Rs. 68,02,950/-. The AO during the course of assessment proceedings noted that while finalizing the scrutiny assessment u/s.143(3), the then AO had disallowed deduction claimed u/s.80IA(4) at Rs. 84,02,555/-. The CIT(A) decided the issue against the assessee and on further appeal the Tribunal decided the issue in favour of the Revenue and upheld the decision of the CIT(A). The assessee filed an appeal before the High Court and the decision is awaited. The AO did not further dwelt upon this issue. 3. In appeal the Ld.CIT(A) also did not decide the issue for A.Y. 2004- 05 and 2005-06 holding that the matter is pending with High Court and not abated. Similarly for A.Y. 2006-07 also he did not decide the issue on the ground that the matter is pending before the Tribunal. 4. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds : "1. The Ld.CIT(A) erred in not allowing the deduction u/s.80IA(4) of Rs. 84,02,555/-. 1.1 The Ld.CIT(A) failed to appreciate that the assessee company was enti....
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....on u/s.80IA(4). The CIT(A) upheld the disallowance and the Tribunal also confirmed the order of the CIT(A). On further appeal by the assessee, the Hon'ble High Court, following the decision in assessee's own case in the preceding assessment year, restored the issue to the file of the Tribunal for fresh decision in accordance with law. The relevant observation of the Hon'ble High Court at para 2 to 4 of the order read as under : "2. In this appeal, the Assessee has in respect of assessment year 2004-05 raised the following question of law for our consideration. Whether on the facts and in the circumstances of the case on a proper and reasonable interpretation of S.80IA(4), the Tribunal is right in holding that Government or Statutory body is the developer of infrastructure facility and here appellant is not entitled to deduction under that section? 3. The Tribunal, while dismissing the Assessee's Appeal, followed its order for assessment year 2003-2004 while denying the deduction claimed under section 80IA(4) of the Income Tax Act. The order of the Tribunal for the assessment year 2003-2004 has been set aside by this Court in Appeal filed by the Appellant being I.T....
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.... 24-07-2003. Post development the assessee was given 5 flats in the said apartment, stamp duty valuation of which was Rs. 63,09,160/- as on 24-07-2003 as against the sale consideration received by it from Partha Developers of Rs. 69,50,000/-. It was argued that the valuation made by the DVO was erroneous as the same was based on the rates prevailing during the year 2005 and not 2003. It was further submitted that there was boom in Pune Real Estate market between 2003 to 2005 and prices were suddenly increased by more than 60 to 70% in the said period. The decision of Hon'ble Delhi High Court in the case of CIT Vs. Punit Sabharwal reported in 338 ITR 485 was brought to the notice of the AO wherein it has been held that addition cannot be made only on the basis of report of DVO. The primary burden to prove the understatement or concealment of income is on the revenue. 13. However, the AO was not satisfied with the explanation given by the assessee. He noted that the valuation officer has valued the property as on the date of transfer of the property to the asesssee, i.e. in 2003. Therefore, the contention of the assessee regarding steep rise during 2003 to 2005 is out of place. Re....
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....ted the sale value pertaining to flats sold during the year 2005-06. The appellant had entered into an agreement for development of the plot in Kothrud in exchange of a sum of Rs. 44 lakhs payable in cash and flats admeasuring 4250 sq.ft, the value of which was adopted at Rs. 25.50 lakhs in 2003-04. Nothing has been brought on record to show that the valuation of 4250 sq.ft. of construction at Rs. 25.50 lakhs did not reflect the actual market value of flats existing in the area during 2003-04. Hence, the addition made is unwarranted even on merits. This ground of appeal is allowed." 16. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 17. The Ld. Departmental Representative strongly supported the order of the AO. She submitted that the assessee could not explain satisfactorily the difference between the valuation done by the DVO and the figures shown by the assessee. Therefore, the CIT(A) was not justified in deleting the addition. 18. The Ld. Counsel for the assessee on the other hand while supporting the order of the CIT(A) submitted that the assessee owned a plot of land in Kothrud, Pune which was purchased on 15-09-1989. Referring to pages 32....
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....hat when the property was transferred in F.Y. 2003- 04 the DVO was not justified in adopting the rates for 2005-06. 20. Referring to the decision of Hon'ble Delhi High Court in the case of Puneet Sabharwal (Supra) he submitted that the Hon'ble High Court in the said decision has held that addition to income based solely on report of DVO is not valid in absence of any evidence of understatement of consideration. He accordingly submitted that the order of the CIT(A) being in accordance with law should be upheld and the ground raised by the Revenue on this issue should be dismissed. 21. The Ld. Departmental Representative in her rejoinder submitted that the decision relied on by the Ld. Counsel for the assessee in the case of All Cargo Global Logistics Ltd./Continental Warehousing Corporation (Supra) is not applicable. She submitted that the general proposition is that all pending assessments shall abate and be open for examination but concluded assessments can be examined only with respect to certain circumstances where incriminating material or relevant material has been unearthed during the search or during the proceedings u/s.,153A. She emphasized on the later condition, i.e. u....
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....uments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant case the assessee during the course of original proceedings u/s.143(3) vide letter dated 26-07-2006, a copy of which is placed at page 30 of the paper book had given the agreement for sale of development rights of plot as per clause 10 of the said letter. In the original assessment order passed u/s.143(3) on 22-12-2006 there is no addition on this issue. The submission of the Ld. Counsel for the assessee that no incriminating material was found during the course of search also could not be controvered by the Ld. Departmental Representative. The addition has been made by the AO mainly based on the valuation report of the DVO. The Hon'ble Delhi High Court in the case of Puneet Sabharwal (Supra) has held that addition to income based solely on report of DVO is not valid in absence of any evidence of understatement of consideration. We further find from the report of the DVO that he has valued the property by adopting the rate of the F.Y. 2005-06 whereas the property has been tran....
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....reciate that as per the method of accounting followed by the assessee, the material purchased by the assessee was expensed out in the books by the assessee and hence, there was no reason to include the same in the closing WIP. 2. The learned CIT(A) erred in not appreciating that no incriminating evidence was found as a result of search pertaining to this transaction and hence, no such addition could be made in the asst. u/s 153A and hence, the addition made ought to have been deleted." 29. Facts of the case, in brief, are that the AO during the course of assessment proceedings on verification of the balance sheet noted that the assessee is in receipt of various advances from contractee, viz., mobilization advance, machinery advance, security advance, advance against security deposits, advance against erection and commission, advance against work done etc. Out of this, security advance has been received from the contractee against material lying at site. The ratio of advance to cost of material is 75:100. The AO further noted that the assessee has shown Nil work-in-progress in connection with Gunjawani project but had shown receipt of security advance received during A.Y....
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....g out the material at site for which RA bills has been raised in earlier years and the same has been allowed is not a good reason for making the addition in this year. There is no bar on the Department to set right an incorrect method of valuation of WIP even though the same may have been regularly followed and allowed in assessment in earlier years. It is well-known that there is no res-judicata in income-tax proceedings. 21. The appellant's counsel had submitted that in case the addition is confirmed then they may be allowed the benefit of claiming this value as the opening stock in the succeeding year. The claim is well-founded and is consistent with the principles of accounting. Hence, I direct the assessing officer to allow the appellant to adopt the WIP of the earlier previous year added as income of the appellant as the opening WIP of the succeeding financial year. In view of the above, this ground of appeal is dismissed." 33. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 34. The Ld. Counsel for the assessee referring to pages 33 to 44 of the paper book submitted that original assessment in the instant case was completed u/s.....
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.... return of income. We therefore find merit in the argument of the Ld. Counsel for the assessee that no addition can be made to completed assessments in absence of any incriminating material found during the course of search or during 153A proceedings in view of the decision of Hon'ble Bombay High Court in the case of All Cargo Global Logistics Ltd./Continental Warehousing Corporation (Supra). The grounds raised by the assessee are accordingly allowed. 37. The Ld. Counsel for the assessee at the time of hearing did not press grounds of appeal No.3 and 3.1 for which the Ld. Departmental Representative has no objection. Accordingly, the above grounds are dismissed as 'not pressed'. 38. Grounds of appeal No.4 to 4.2 by the assessee read as under : "4. The Ld.CIT(A) erred in not allowing the deduction u/s.80IA(4) of Rs. 1,46,85,364/-. 4.1 The Ld.CIT(A) failed to appreciate that the assessee company was entitled to deduction u/s.80IA(4) and the same should have been allowed to the assessee company. 4.2 The Ld.CIT(A) erred in not appreciating that since the asst. u/s.143(3) was already completed prior to search for this year, there was no reason to disallo....
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....ppeal, followed its order for assessment year 2003-2004 while denying the deduction claimed under section 80IA(4) of the Income Tax Act. The order of the Tribunal for the assessment year 2003-2004 has been set aside by this Court in Appeal filed by the Appellant being I.T. Appeal No.4610 of 2010 on 30th August, 2011 and restored to the Tribunal for a fresh decision. 3. For the reasons mentioned in the order dated 30th August, 2011, we set aside the impugned order relating to assessment year 2005-2006 and restore the matter to the file of the Tribunal, for fresh decision in accordance with law. 4. All the contentions of parties are kept open to be urged before the Tribunal." 41. We find the Tribunal in assessee's own case vide ITA No.433/PN/2007 order dated 06-02-2012 for A.Y. 2003-04, following the decision of Hon'ble Bombay High Court in the case of CIT Vs. ABG Heavy Industries Ltd. and other reported in 322 ITR 323 and various other decisions, has allowed the claim of deduction u/s.80IA(4) of the Act. However, as pointed out by the Ld. Counsel for the assessee we find no disallowance has been made u/s.80IA(4) in the assessment order passed u/s.153A of the Act....
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....the assessee company. 4.2 The Ld.CIT(A) erred in not appreciating that since the asst. u/s.143(3) was already completed prior to search for this year, there was no reason to disallow the deduction u/s.80IA(4) in the asst. framed u/s.153A. 49. After hearing both the sides we find the assessee company had claimed deduction u/s.80IA(4) in the original return filed u/s.139(1). The AO passed the assessment u/s.143(3) on 02-12-2008 disallowing the claim of deduction u/s.80IA(4) at Rs. 1,53,18,839/-. The assessee challenged the disallowance and the CIT(A) decided the issue against the assessee. The matter is pending before the Tribunal, as mentioned in the order of CIT(A). In the meantime, the AO subsequent to the search completed u/s.132 of the I.T. Act, issued notice u/s.153A of the Act. In the order passed u/s.153A r.w.s.143(3) dated 27-12-2011 the AO noted that against the order of the CIT(A) the assessee has preferred an appeal before the Tribunal and the decision is awaited. However, the AO has not made any disallowance u/s.80IA(4) in the assessment completed u/s.153A. While computing the total income the AO has started with the figure of income assessed u/s.143(3) asses....
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.... The assessee submitted that there was no civil work involved for erection of the wind turbine as parts like control panels and display meters were used within the tower itself. It was submitted that the civil work done in the form of foundation work could not be separated from the wind turbine and therefore it was entitled for depreciation on the entire cost of the wind turbine. 58. However, the AO was not satisfied with the explanation given by the assessee. After verifying the bills in connection with various expenses incurred on wind turbine the AO held that the assessee is not entitled for depreciation on civil work, payment towards MEDA charges etc. For the above proposition the AO relied on the decision of the Tribunal in the case of Poonawalla Finvest and Agro Pvt. Ltd. Vs. ACIT reported in 100 TTJ 68 and Rule 32(1) of the I.T. Rules, 1962 Appendix I, Part A, item III(3)(ixviii)(i). The AO accordingly reworked the depreciation. Similarly the AO noted that the assessee has paid Rs. 6,35,000/- towards processing charges to MEDA for installation of windmill at Akhatwade, Dist. Nandurbar. The charges were claimed as indirect expenses. The AO disallowed the claim on the groun....
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....of windmills. Question Nos. 1 and 2 of this letter are specifically directed towards these issues. These details were provided by the appellant vide their letter dated 03- 10-2008. Applying the principles for assessment as above in the foregoing paragraphs I hold that these issues were already looked into during the course of original assessment and an opinion was formed that depreciation is allowable on foundation of the windmill at the rates applicable to WTGS and that MEDA charges were an allowable business expense. Hence, it was not possible for the assessing officer, in the absence of any material found during the course of search to make the aforesaid disallowance as the same tantamount to a change of opinion which is not permitted in the course of reassessment u/s.153A. The appeal on this ground is allowed for assessment year 2006-07." 62. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 63. The Ld. Departmental representative at the outset relied on the arguments advanced by her while arguing the scope of 153A proceedings in A.Y. 2004-05 and submitted that the AO can make disallowance on the basis of incriminating material unearthed during t....
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..... Facts of the case, in brief, are that the AO during the course of assessment proceedings noted that the assessee had acquired land at R.S.No.152, at village Akhatwade, R.S.No.73 at village Gangapur, Dist. Nandurbar in the financial years relevant to A.Yrs. 2006-07 and 2007-08 respectively. The AO made a reference to the DVO u/s.142A of the I.T. Act to determine the cost of the properties in the hands of the assessee as on the date of acquisition. The DVO in his report adopted the method of valuation for cost of acquisition of land taking into consideration of old rates reflected in the ready reckoner and factors affecting the valuation like, size, situation, location, locality, age, access to civil amenities, area, type of occupation, purpose of valuation, use etc. for the fair market rate of the property. He accordingly valued the property at Rs. 3,84,000/- as against Rs. 1,20,000/- declared by the assessee. Similarly for the A.Y. 2007-08 as against the value disclosed by the assessee at Rs. 1,80,000/- the DVO valued the same at Rs. 6,71,000/-. 68. The AO provided the copy of the valuation report to the assessee and sought its explanation and asked the assessee as to why the ....
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....includes the stamp duty paid of Rs. 50,900/- for assessment years 2006-70 and Rs. 71,480/- for assessment year 2007-08. The DVO has adopted the value of Rs. 3.84 lakhs and Rs. 6.71 lakhs on the basis of the rates reflected in the ready reckoner and other factors like size, situation, locality, accessibility etc. Apparently, this is merely an estimation and not based on comparable instances of sale in this locality. Further, it is well-known that the windmills are located in far-flung areas which are often not easily approachable. Therefore, the valuation of land in these areas will not be the same as the value of a land which is easily marketable. The appellant has also incurred substantial cost of improvement and included it in the cost of land. Taken together the amount debited towards the cost of land is much higher than the value adopted by the DVO. I therefore, direct the assessing officer to delete the additions. In view of the above, this ground of appeal is allowed for the years under consideration." 71. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 72. We have considered the rival arguments made by both the sides, perused the orders of t....
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....f payer, name of the recipient, designation of the prime recipient, share of such unexplained expenditure between Mahalaxmi Infra Projects Pvt. Ltd. and its J.V. Partner B.T. Patil and sons, Belgaum Construction Company Ltd. etc. The main evidence of speed money payment relates to Ghodzhari project, a project of irrigation department of Government of Maharashtra undertaken by joint venture comprising of Mahalaxmi Infra Projects Pvt. Ltd. and B.T. Patil and sons, Belgaum Construction Company Ltd. The said seized documents contain details of total speed money paid in respect of Ghodzhari project upto 04-02-2009. The total speed money paid in respect of Ghodzhari Project as on 04-02-2009 amounts to Rs. 43,83,64,000/-. 50% of the above amounting Rs. 21,91,82,000/- relates to the assessee company and the balance 50% of Rs. 21,91,82,000/- to B.T. Patil and sons, Belgaum Construction Company Ltd. assessee's J.V. Partner. Both the assessee and its JV partner B.T. Patil and sons, Belgaum Construction Company Ltd. admitted that Rs. 43,83,64,000/- is the total unexplained expenditure related to Ghodzhari project and their 50% share is Rs. 21,91,82,000/-. However, the assessee company and its ....
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....re are evidence to prove that speed money expenses are shared equally by the assessee company and B.T. Patil & sons. 80. In view of the above, the AO held that unexplained expenses in the form of speed money payments should be taxed in the year of payment. According to the AO as per his analysis the speed money for A.Y. 2007-08 comes to Rs. 550.35 lakhs out of which share of the assessee company is Rs. 270.175 lakhs. He therefore asked the assessee to explain as to why the amount of Rs. 270.175 lakhs should not be added to the total income of the assessee. Similarly, he noted that for A.Y. 2008-09 the assessee's share comes to Rs. 1490.675 lakhs and Rs. 425.97 lakhs for A.Y. 2009-10. 81. The AO further noted that during the search proceedings evidences of speed money payment other than Ghodzhari project were found at the residence of Shri R.D. Shinde, Managing Director of the assessee company and at the office premises of the assessee company. At the residence of Shri D.A. Bhat evidence of speed money paper in respect of Koyna project were also found in addition to Ghodzhari project. The assessee disclosed 51% of the said amount of Rs. 1,41,85,000/- related to Koyna project a....
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....sing the unexplained expenses in the year of payment, the assessee company disclosed unexplained expenses related to Ghodzhari project in the A.Yrs. 2009-10 and 2010-11 as under : A.Y. Additional income disclosed by the assessee towards unexplained expenses 2009-10 Rs.7,46,12,030 2010-11 Rs.10,55,06,970 Total Rs.18,01,19,000 85. He observed that as against the assessee's share of unexplained expenses for A.Y. 2007-08 at Rs. 270.175 lakhs the assessee has disclosed Nil additional income. Therefore, during the assessment proceedings u/s.153A the AO asked the assessee to explain as to why the unexplained expenses related to Ghodzhari project should not be taxed as per the seized document. 86. It was submitted by the assessee that Shri D.A. Bhat, Technical Director of the assessee company has retracted his statement u/s.132(4) of the I.T. Act by filing a letter dated 11-10-2009. Shri D.A. Bhat is only a technical man and is not acquainted with financial matters. The unexplained expenses seized from residence of Shri D.A. Bhat related only to projected expenses and not actually paid. Further, Shri R.D. Shinde in his statement recor....
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.... its contention that the said expenses have been paid after receipt of RA bills. According to the AO the paper/document should be read as a whole and all the contents of the papers are presumed to be true and correct unless contrary is proved. The assessee is accepting the figures of pages 39 and 40 but not accepting the dates of pages 39 and 40. Therefore, the contention of the assessee is contradictory. 89. As regards the contention of the assessee that Shri D.A. Bhat had retracted from his statement u/s.132(4) which according to him was given under tremendous mental tension and pressure the AO noted that the statement u/s.132(4) has immense evidentiary value. The retraction in the present case is neither immediate nor is corroborated with any evidence. Admission is a very important piece of evidence and brushing it aside whimsically would distort the whole purpose of the provisions. According to the AO in order to allow a withdrawal or a retraction of the same conclusively, there must be mitigating circumstances making out a case for such retraction, a fact which is completely absent in the facts and circumstances of the present case. To allow retraction without any cogent ma....
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....ion is not based on any evidence and devoid of any strength. Therefore, retraction Shrri D.A. Bhat is an afterthought, self-serving document and deserves rejection. As regards argument of Shri R.D.Shinde, that as on the date of search the JV has received Rs. 98 Crores only in respect of Ghodzari project and, therefore, payment of Rs. 43 Crores is highly unreasonable, following facts are very relevant. Assessee before starting the work received mobilization advance of Rs. 28,02,00,000/- on 31/3/2007 from government. Further, additional mobilization advance of Rs. 22,80,00,000/- was received from government by the assessee on 25/2/2008. Thus, mobilization advance of Rs. 50.82 Crores was received from government by the assessee as on 25/2/2008. Therefore, payment of Rs. 43 Crores (approx.) as speed money as on 4/2/2009 is only return of money taken from government. Therefore, this contention of the assessee is not acceptable. In any case, there are clear evidences proving the fact that Rs. 4383.64 Lakhs of speed money has been actually paid by assessee as on 4/2/2009. In the light of the aforesaid facts, the contention of the assessee is hereby rejected. 11.22. To co....
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....nder : Assessment Year Undisclosed income 2006-07 42,58,200/- 2007-08 14,35,54,700/- 2008-09 5,20,63,750/- 2009-10 4,75,94,030/- Total 24,74,69,680/- 92. The assessee submitted that the undisclosed income worked out above, should be taxed as against the figures adopted by the assessing officer. 93. However, the CIT(A) was also not satisfied with the explanation given by the assessee and upheld the addition made by the AO by observing as under : "56. I have given careful consideration to the contentions of the appellant with reference to the facts of the case. This is a case where Shri D.A. Bhat, Director in appellant company, has retracted from the statement given earlier on 24-09-2009 and Shri Ravindra D. Shinde, Managing Director/Promoter of the appellant firm has brushed aside the revelations made by Shri D.A. Bhat as also the documents pertaining to Ghodzhari project, executed by the appellant firm in joint venture with B.T. Patil & Sons (Belgaum) Construction Co. Ltd. retrieved from Shri D A Bhat's residence. As per the joint venture agreement dated 03/08/2007, Shri Navin B Patil (son of Shri B T Patil)....
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....ust a day before the final statement of Shri Ravindra D. Shinde, Promoter and Managing Director of the appellant company, was recorded u/s. 132(4) on 12/10/2009. In the letter dated 11/10/2009, Shri D. A. Bhat has intimated that the earlier admission made by him was on a mistaken understanding and misconception of facts. He also stated that he was under mental stress at the time of making the statement. However, what is of relevance is the fact that it is not the case of Shri D. A. Bhat that the statements were untrue, or involuntary; or were made under undue influence, pressure or coercion. 60. Logically the burden to prove the admission as ineffective is on the maker. Thus, on the failure of the maker to prove that earlier stated facts were wrong, his earlier statements are sufficient to conclude a matter. At this juncture, it must be noted that the statement to bind the maker must be voluntary and only if it appears to have been obtained by coercion, inducement or threat it must be rejected. On retraction, earlier stated facts or admissions, lose their effect as a binding evidence and it may not be permissible for the income-tax authority to conclude a matter on the bas....
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.... reliable for the reason that such was the statement which was recorded first in point of time and was made on the spot. Possibility of an afterthought or to concoct an explanation and fabricate the evidence in subsequent statement cannot be ruled out. A retraction to have any evidentiary value must preferably be in a statement not only denying the earlier stated facts but explaining the reasons for making a statement earlier and giving substituted facts in support of retraction. Total denial of what has been stated in the previous statement cannot be said to be effective and it shall at best be deemed merely as a plea of denial which may not be of much help. 62. The important aspect of the matter is that during the course of search Shri D. R. Bhat came with an explanation that amounts written in the papers and documents discovered from him were in the nature of speed money or gratuitous payments made for the purpose of acquiring the contract for Ghodzhari project by the Joint venture between the appellant and B. T. Patil and Sons (Belgaum) Ltd. The explanation proffered had two limbs viz. one pertaining to the nature of expense recorded and the other pertaining to the per....
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.... Shri Ravindra D. Shinde. 63. As already mentioned, Shri D A Bhat is a trusted and loyal employee of the appellant company apart from being a close confidant of the Managing Director, Shri R D Shinde. It is apparent from the documents seized from his residence which pertained to the joint venture between the appellant company and B T Patil and Sons (hereinafter referred to as 'Bhat documents') that Shri Bhat was involved in the project since inception in more ways than just being responsible for technical matter. The fact that he used to maintain the account of unaccounted payments and was the appellant company's main interface with the joint venture partner B T Patil and Sons is apparent from the fact that B T Patil and Sons used to send the financial reconciliation statement to Shri Bhat on regular basis. The assessing officer has elaborately discussed the issue between pages no. 3 to 43 of the assessment order for the assessment year 2007-08. This aspect of assessment is repeated in assessment years 2008-09, 2009-10 and 2010-11. The assessing officer has also made the seized documents a part of the assessment order in these pages. The evidences indicate that....
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..... 1801.19 crores only. In view of the discussion above and the reasons mentioned in paragraphs 7.14 on pages 12-13 of the assessment order for the assessment year 2010-11 (corresponding paragraph 7.7 for assessment years 2007-08, 2008-09 and 2009-10), I hold that the assessing officer has correctly taken cognizance of the loose papers found in the residence of Shri D A Bhat and accordingly taxed the unexplained expenses in the assessment years 2007-08, 2008-09 and 2009-10. 64. Consequently, the protective additions made of Rs. 3.20 crores in assessment years 2009-10 and Rs. 10.55 crores in 2010-11 stands deleted." 94. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 95. The Ld. Counsel for the assessee strongly challenged the order of the CIT(A). He submitted that the notings on the loose papers are not about the payments actually made but these are projected expenses yet to be incurred before the search. He referred to the papers found with B.T. Patil and sons during the search at their place placed at pages 238 to 246 of the paper book and submitted that these papers do not indicate the dates as noted on the papers found with the assesse....
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..... 2007-08 and 2008-09 and reduced the income declared by the assessee for A.Yrs. 2009-10 and 2010-11. He submitted that the AO at page 30 and 56 of the assessment order has held that these expenses are incurred out of the bogus expenditure vouchers debited in the accounts and he accordingly increased the business income of the assessee by the above amounts. He accordingly submitted that the addition of Rs. 2,00,17,500/- made by the AO in A.Y. 2007-08 on the basis of the loose papers is not justified and therefore the same should be deleted. 96. The Ld. Departmental Representative on the other hand heavily relied on the order of the AO and CIT(A). She submitted that evidences regarding the speed money is based on statement of 4 important functionaries viz., Shri D.A. Bhat, Technical Director of the assessee company, Shri R.D. Shinde, Managing Director of the assessee company, Shri A.R. Gurjar, Project Manager of the assessee company and Shri B.T. Patil, Accountant of the assessee. Further, faxes, papers and reconciled documents of speed money maintained in the books were also found during the course of search. Analysis of SMSs received by Shri D.A. Bhat who kept accounts for the ....
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..... Similar additions were made in A.Y. 2008-09 at Rs. 1490.675 lakhs and Rs. 425.97 lakhs in A.Y. 2009-10 which has been upheld by the CIT(A). It is the contention of the Ld. Counsel for the assessee that notings on the loose papers are not about the payments actually made but these are projected expenses to be incurred. Further, it is also his contention that the seized papers do not indicate any payment of speed money and therefore the revenue authorities are not justified in holding that the payment noted on the seized papers reflect speed money paid by the assessee company especially when Mr. Bhat had retracted his statement immediately at the earliest opportunity. We do not find any substance in the above arguments of the Ld. Counsel for the assessee. The AO has made addition not only on the basis of the papers seized from the premises of Shri D.A. Bhat, but also on the basis of statements recorded from responsible persons of the assessee company namely Mr. D.A. Bhat, Technical Director, Shri R.D. Shinde, Managing Director, Mr. Gurjar, Project Manager and Mr. B.T. Patil, the Accountant of the company. Therefore, the contention of the Ld. Counsel for the assessee that the noting....
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....years and some creditors are even outstanding for more than 10 years. He, therefore, asked the assessee to shortlist the names of creditors who are outstanding for more than 3 years and since when they remain unpaid. The AO further noted that investigation during the search and assessment proceedings revealed that the assessee is generating unaccounted income by inflating the expenditure. Since assessee is doing Government contracts it cannot suppress the receipts. First method is when an expenditure is debited in the books, the payment is made through cash from out of unaccounted income. However the liability is continued till such time, the cash book has sufficient cash balance. Whenever there is sufficient cash balance, the payment is shown in the books and liability is liquidated. The labour charges are shown as payable for a long time, sometimes years together. According to the AO since the labours are poor and they lead hand to mouth existence it is unlikely that they wait for such a long time for the payment to be received. In view of the detailed discussion by the AO at para 17.2 of the order the AO rejected the credits outstanding for more than 3 years at Rs. 6,02,856/- fo....
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.... or the right of the creditor to demand repayment from the assessee. The Supreme Court in a case related to payment of wages in Bombay Dyeing and Manufacturing Company Ltd. V/s State of Bombay AIR (1958) (SC) 328, 335 has pointed out that the expiry of limitation period only deprives the creditor of his remedy to institute a suit in a court of law but the indebtedness of the other party continues. However, it is also a fact that the situation would be different if it is shown that the creditors have abandoned their right to recover the debt from the debtor. This implies that the action of the creditor which is an expression of the intention not to pursue recoveries can be sufficient to hold that there is a cessation of liability. That the creditor has abandoned his right to enforce recovery would become stronger with a flux of time if no action is taken. Under these circumstances, there is no requirement of an unequivocal declaration on the part of the creditor that he does not wish to pursue recovery or an acknowledgement of this intention by the assessee by way of recording the same in his books of account. In fact, in this case, all that is relevant is that the money should have....
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....the probability that the amounts would be outstanding against subcontractors and labour is contrary to normal human and business conduct. The appellant fails on this ground." 101. Aggrieved with such order of CIT(A) the assessee is in appeal before us. 102. The Ld. Counsel for the assessee strongly challenged the order of the CIT(A). He submitted that merely because the creditors were outstanding for a period of 3 years or more it does not mean that in the hands of the assessee the liability has ceased. Referring to the decision of the Hon'ble Supreme Court in the case of Sugauli Sugar works reported in 236 ITR 518 he submitted that there is no reason to hold that the liability has ceased in the hands of the assessee and such amounts of old creditors constitute the income u/s.41(1). He also relied on the decision of the Pune Bench of the Tribunal in the case of Hrishikesh L. Joshi vide ITA No.702/PN/2007 wherein it has been held that simply because the liability is unpaid for a period of more than 3 years it cannot be taxed as cessation of liability u/s.41(1). 103. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). She submitte....
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....ability u/s.41(1) of the I.T. Act has observed as under: "The respondent-assessee is a private limited company. In the proceedings for assessment of tax for the year ending 30.6.1964 relevant to the Assessment year 1965-66, the assessee transferred a sum of Rs. 3,45,000 out of the suspense account running from 1946-47 to 1948-49 to the capital reserve account. The Income Tax Officer found that an amount of Rs. 1,29,.000 was with reference to the deposits and advances which had been paid back and he included a sum of Rs. 2,56,529 under Section 41 of the Income Tax Act in the total income of the assessee. The assessee went on appeal before the Appellate Assistant Commissioner and the order of the I.T.O. was confirmed. The assessee carried the matter to the Tribunal. The Tribunal accepted the contention of the assessee and held that its unilateral entry in the accounts transferring the amount to the capital reserve account would not bring the matter within the scope of Section 41 of the Income Tax Act and consequently held in favour of the assessee. The decision of the Tribunal was challenged before the High Court. The High Court observed : "The transfer of an entry ....
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....nt in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by him". Thus, the section Contemplates the obtaining by the assessee of an amount either in cash or in any other manner whatsoever or a benefit by way of remission or cessation and it should be of a particular amount obtained by him. Thus, the obtaining by the assessee of a benefit by virtue of remission or cessation is sine qua non for the application of this Section. The mere fact that the assess has made an entry of transfer in his accounts unilaterally will not enable the Depart-ment to say that Section 41 would apply and the amount should be included in the total income of the assessee. The reasoning of the High Court is correct and we are in agreement with the same. 4. Learned counsel for the appellant draws our attention to the judgment of the Calcutta High Court in Commissioner of Income Tax v. General Industrial Society Ltd., (1994) 207 ITR 169. The Division Bench of the Calcutta High Court has taken care to set out the two important factors in that case which weighed with them to come to the particular concl....
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.... his income, he could not be permitted to turn round when the question of inclusion of such amount in his income under Section 41(1) of the Act arose. The Bench distinguished the judgment in Kohinoor Mills Co. Ltd. v. CIT, (1963) 49 ITR 578, by observing that there was no cessation of liability in that case despite the expiry of period of limitation to enforce the same. The Bench said that the assessee could not get rid of his liability when called upon to meet either by the employees under the Industrial Disputes Act or by the Government under the Bombay Welfare Fund Act on account of the special provisions of those Acts. We are unable to accept the reasoning of the Bombay High Court in that case. Just because an assessee makes an entry in his books of accounts unilaterally, he cannot get rid of his liability. The question whether the liability is actually barred by limitation is not a matter which can be decided by considering the assessee's case alone but it is a matter which has to be decided only if the creditor is before the concerned authority. In the absence of the creditor, it is not possible for the authority to come to a conclusion that the debt is barred and has bec....
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....ch loss or expenditure in the past". As rightly observed by the Division Bench in the context in which these words occur, no other meaning is possible." we are in agreement with the said reasoning. 8. There is another judgment of the Bombay High Court which was rendered much earlier in J.K. Chemicals Ltd. v. Commissioner of Income-Tax, Bombay City II, (1966) 62 ITR 34. The Bench observed : "........The transfer of an entry is a unilateral act of the assessee, who is a debtor to its employees. We fail to see how a debtor, by his own unilateral act, can bring about the cessation or remission of his liability. Remission has to be granted by the creditor. It is not in dispute, and it indeed cannot be disputed, that it is not a case or remission of liability. Similarly, a unilateral act on the part of the debtor cannot bring about a cessation of his liability. The cessation of the liability may occur either by reason of the opera-tion of law, i.e., on the liability becoming unenforceable at law by the creditor and the debtor declaring unequivocally his intention not to honour his liability when payment is demanded by the creditor, or a contract between the parties or b....
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....here is no need for any addition during the year under consideration. Further, we find the judgments in the cases of DSE Engineers (30 SOT 31) (Mum), Sugaoli Sugar Works P Ltd (236 ITR 518) holds that the liabilities do not cease to exists merely by efflux of time. Considering the above settled principles on the issue, we find that the finding of the CIT(A) has to be reversed on this issue. Accordingly, the relevant ground of the assessee are allowed. Further, the grounds of the revenue are dismissed." 106. Following the above decisions cited (Supra) we hold that the Ld.CIT(A) is not justified in sustaining the addition of Rs. 6,02,856/- made by the AO u/s.41(1) of the I.T. Act. We accordingly set aside the order of the CIT(A) on this issue and the ground raised by the assessee is allowed. 107. In ground of appeal No.4 and 5 the assessee has challenged the order of the CIT(A) in directing the AO to apportion the cost of power evacuation facility and miscellaneous expenses between building/road and windmill in the ratio of 60:40. 108. After hearing both the sides we find this ground by the assessee is correlated with the ground raised by the Revenue in ground of appeal No.3....
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.... 2. a) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred m allowing deduction under sec. 80IA(4) of Rs. 7,88,92,588/- which was earlier confirmed by the Ld. CIT(A) as well as the Hon 'ble ITAT for A.Y. 2004- 05 and 2005-06 as the assessee is only a work contractor and not a developer as per the explanation below 80IA(13). b) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction under sec. 80IA(4) of Rs. 21,93,856/- which is the additional income declared during the course of search proceedings, on account of expenses from unexplained sources which attract provision of S. 69C of the Income Tax Act which is not an income from the business of undertaking referred to in sec. 80IA(4). 115. Facts of the case, in brief, are that the AO during the course of assessment proceedings noted that the assessee in the return of income has claimed deduction u/s.80IA of the Act amounting to Rs. 7,88,92,588/-. During the assessment proceedings the AO asked the assessee as to why the deduction u/s.80IA(4) should not be disallowed. In response to the same, the assessee vide his Explanation dated 1....
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.... in respect of claim u/s. 80IA(4) in respect of additional income declared during search be allowed." 116. However, the AO was not satisfied with the explanation given by the assessee. He noted that the assessee is a contractor and in view of Explanation 2 to section 80IA of the I.T. Act, 1961 the assessee is not entitled to deduction u/s.80IA(4). Further, the Tribunal in assessee's own case in the preceding years has already rejected such claim. The AO accordingly rejected the claim of deduction u/s.80IA(4) of the I.T. Act for this year and other years as claimed by the assessee. 117. Before CIT(A) it was submitted that for the A.Y. 2003-04 the AO had disallowed claim of deduction u/s.80IA(4) which was upheld by the Tribunal. The assessee challenged the matter before the Hon'ble High Court. The Hon'ble High Court had set aside this issue to the file of the Tribunal and subsequently the Tribunal vide ITA No.433/PN/2006 has decided the issue in favour of the assessee. The appeals for A.Yrs. 2004- 05 & 2005-06 have been set aside by the Hon'ble High Court to the file of the Tribunal and the matter for A.Y. 2006-07 is pending before the Tribunal. It was submitted that since Chap....
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....d applicable w.e.f. 1.4.2002 i.e. assessment year 2002-03 reads as under: "Deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. 80-IA. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. . . . (4) This section applies to - (1) Any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility which fulfils all the following conditions, namely:- (a) It is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established....
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....4-2000, read as under: Explanation.-For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a person who executes a works contract entered into with the undertaking or enterprise, as the case may be. 93. As per the amended law w.e.f. assessment year 2002-03, development of infrastructure facility is sufficient for claim of deduction u/s 80IA(4). In the instant case conditions stipulated in sub clause (a) of sub-section (4)(i) with regard to the enterprise being owned by the company registered in India is duly fulfilled. The condition stipulated in sub-clause (b) requiring that the assessee company to enter into agreement with the Central or State Government for development of new infrastructure facility is also fulfilled. The condition stipulated under sub-clause (c), which required that the assessee has started operating and maintaining infrastructure facility on or after 1st day of April, 1995, does not appear to be fulfilled. However, the provision of clause (c) would apply only to such enterprises engaged in maintaining and operating the infrastructure as held in the case of CIT v. ABG Heavy Industries Ltd. [2010]....
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....on 80IA(4) will not be available to a works contractor. The rationale behind insertion of the Explanation was explained in Circular No. 3/2008 dated 12-03-2008 as- 34. Clarification regarding developer with reference to infrastructure facility, industrial park, etc. for the purposes of section 80-IA 34.1 Section 80-IA provides for a ten-year tax benefit to an enterprise or an undertaking engaged m development or operation and maintenance or development, operation and maintenance of infrastructure facilities, providing telecommunication service, generation or generation and distribution of power or development of an Industrial Parks or a Special Economic Zones. 34.2 The tax benefit was introduced for the reason that industrial modernization requires a massive expansion of, and qualitative improvement in, infrastructure (viz., expressways, highways, airports, ports and rapid urban rail transport systems) which was lacking in our country. The purpose of the tax benefit has all along been for encouraging private sector participation by way of investment in development of the infrastructure sector and not for the persons who merely execute the civil constructi....
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....re provided by the judgment of the Bombay High Court in the case of ABG Heavy Engg. Ltd (supra). It was held- 6. The above judgment of the Hon'ble High Court is delivered in the case of ABG Heavy Engg. Ltd (supra), who is a contractor for the JNP Trust and that contactor, assessee is found to be an eligible developer for making claim of deduction u/s. section 80IA(4) of the Act. From the above, it is evident that the person who only develops the infrastructure do not have the occasion to operate and maintain the infrastructure. It is further evident that the harmonious reading is necessary and mandatory in view of High Court's judgment in the case of an enterprise carrying on business or developing which is the case of the assessee, all the conditions referred to clause (i) of section 80IA(4) should refer to the conditions as applicable to the developer. In other words, the developer who is only developing the infrastructure facilities since he does not operate and maintain Infrastructural facilities, cannot be expected to fulfil the condition at sub clause (c) which is an impossibility and the requirements to fulfil the said condition shall amount to absurdity and....
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....acility the assessee is referred to as a contractor or because some basic specifications are laid down, it does not detract the assessee from the position of being a 'developer'; nor will it debar the assessee from claiming deduction u/s 80IA(4). 99. The Mumbai Bench of the ITAT in the case of Asstt. CIT v. Bharat Udyog Ltd. [2009] 118 ITD 336 has held that an assessee engaged in development of infrastructure but not in maintaining and operating the same would be eligible for deduction under section 80IA(4) though he is described as a contractor and was paid by the Government. 100. It is held in the case of Metal Infra Projects Ltd. v. CIT [2009] 26 DTR 359 (JP) (Trib.) that simply because the agreement mentioned the assessee as contractor, he would not cease to be the developer. 101. The effect of Explanation introduced by the Finance Act, 2007 whereby any assessee who entered into a contract with the enterprise mentioned in Sub-Section (4) would not be eligible for deduction and its subsequent substitution with retrospective effect from 01-04-2000 by the Finance Act, 2009 which added that those enterprises undertaking works contracts by entering....
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....greement or not. The agreement is not for a specific work, it is for development of facility as a whole. The assessee is not entrusted with any specific work to be done by the assessee. The material required is to be brought in by the assessee by sticking to the quality and quantity irrespective of the cost of such material. The Government does not provide any material to the assessee. It provides the works in packages and not as a works contract. The assessee utilizes its funds, its expertise, its employees and takes the responsibility of developing the infrastructure facility. The losses suffered either by the Govt. or the people in the process of such development would be that of the assessee. The assessee hands over the developed infrastructure facility to the Government on completion of the development. Thereafter, the assessee has to undertake maintenance of the said infrastructure for a period of 12 to 48 months. During this period, if any damages are occurred it shall be the responsibility of the assessee. Further, during this period, the entire infrastructure shall have to be maintained by the assessee alone without hindrance to the regular traffic. Therefore, it is clear ....
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.... executes a works contract entered into with the undertaking or enterprise referred to in the section but where a person makes the investment and himself executes the development work, he carries out the civil construction work, he will be eligible for the tax benefit under section 80IA. 103. The ITAT Chennai has arrived at identical conclusion in the case of East Coast Constructions & Industries Ltd v. DCIT in ITA No. 554/ Mds/201 0 dated 13-09-2011. It was held- When an assessee is only developing an infrastructure facility project and is not maintaining nor operating it, obviously such an assessee will be paid for the cost incurred by it; otherwise, how will the person, who develops the infrastructure facility project, realize its cost? If the infrastructure facility, just after its development, is transferred to the Government, naturally the cost would be paid by the Government. Therefore, merely because the transferee had paid for the development of infrastructure facility carried out by the assessee, it cannot be said that the assessee did not develop the infrastructure facility. If the interpretation done by the Assessing Officer is accepted, no enterprise ....
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....mended by Finance Act, 2009 with retrospective effect from 1.4.2000. Accordingly we allow this ground of the assessee and direct the department to allow the deduction claimed under section 80IA(4) to the assessee. 105. There is a contra decision in case of Indian Hume Pipe Co. Ltd., v.Dy. CIT in ITA No. 5172/Mum/2008, dated 29-7-2011 for assessment year 2004-05 pronounced after the Pune Bench decision in the case of Laxmi Civil Engg. (P.) Ltd. (supra)which considers the Tribunal decision of B. T. Patil & Sons Belgaum Construction (P.) Ltd. v. Asst. CIT [2010] 35 SOT 171 (Mum.) as well as the jurisdictional High Court decision in the case of ABG Heavy Industries (supra) and goes on to hold that the assessee is not entitled to the deduction under section 80IA(4) in view of the Explanation introduced with retrospective effect. 106. Finally there is the decision of the Jurisdictional Tribunal in appellant's own case where the effect of insertion of Explanation with retrospective effect from 01-04-2000 by the Finance Act, 2009 was taken cognizance of while holding that the appellant is entitled for deduction under section 80IA(4). The issue of application of the amend....
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....f sub-sec. (4A) of sec. 80-IA, one of the conditions imposed was that the enterprise must start operating and maintaining the infrastructure facility on or after Ist April, 1995. The same requirement is embodies in sub-d. (c) of sub-sec. (4) of the amended provisions of sec. 80IA. On this basis, it was urged that since the assessee was not operating and maintaining the facility, he did not fulfil the condition. This submission is fallacious both in fact and in law. As a matter of fact, the Tribunal has entered a finding that the assessee was operating the facility and this finding has been confirmed earlier in this judgment. That the assessee was maintaining the facility is not in dispute. The facility was commenced after lst April, 1995. Therefore, the requirement was met in fact. Moreover, as a matter of law, what the condition essentially means is that the infrastructure facility should have been operational after 1st April, 1995. After sec. 80-IA was amended by the Finance Act of 2001, the section applied to an enterprise carrying on the business of (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining any infrastructure facility whic....
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....n u/s 80-IA(4) of the Income Tax Act. As per the said decision of the Hon 'ble High Court assessee who only develops infrastructural facility (even as a contractor) but does not have an occasion to operate and maintain is also eligible for claim of deduction u/s 80-IA(4) of the Act. The Hon 'ble High Court has been pleased to observe that qua such person the condition stated in sub-section (c) of sec. 80-IA(4)(i) has to be read harmoniously with the main provision under which deduction is available to an assessee, who develops; or operates and maintain; or develops, maintains and operates an infrastructural facility. In other words a developer who only develops (i.e., constructs) an infrastructural facility is not envisaged to operate and maintain such facility, cannot be accepted to fulfil the condition in clause (c) of section 80-IA(4) since it would be an impossibility. Therefore, in view of the construction placed by the Hon'ble Bombay High Court on the requirements of clause (c) of sec. 80-IA(4)(i) requiring it to be harmoniously read with the main sec. 80-IA(4), we do not find substance in the objection raised by the Revenue. We thus respectfully following the dec....
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....be the case of 'BOT' or 'BOOT' and it is handed over by the Government/Authority to the developer for development of infrastructure facility/Project. So, deduction u/s. 80IA(4) is also available to this assessee which has undertaken work of a mere 'developer'. Rather, the statutory provision as contained in section 80IA which provides for deduction of infrastructure facility no way provides that entire infrastructure facility project has to be developed by one enterprise. Thus, as per section 80IA the assessee should develop the infrastructure facility as per the agreement with the Central/State Government/Local Authority. Entering into a lawful agreement and thereby becoming should, in no way be a bar to the one being a 'developer'. 108. It is a fact in this case that assessee has developed the infrastructure facility as per the agreement with the State Government. The assessee has demonstrated that it has undertaken risks in terms of deployment of technical personnel, plant and machinery, technical know-how, expertise and financial resources. Due to the fact that the contracts for various projects undertaken by the appellant involve design....
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....claimed and allowed accordingly is given below: Asst. Year Claim as per return Additional claim Remarks 2004-05 Rs.84,02,555/- Pending with High Courtnot abated 2005-06 Rs.1,46,85,364/- -do- 2006-07 Rs.1,55,18,839/- Pending with ITAT - not abated 2007-08 Rs.7,88,92,588/- Rs.21,93,856/- Claimed and allowed 2008-09 Rs.24,03,21,259/- Rs.67,33,791/- -do- 2009-10 Rs.15,66,30,732/- Rs.8,31,99,954/- -do- 2010-11 Rs.24,45,32,117/- Rs.15,27,87,220/- -do- It should be noted that the claim of 80IA(4) deduction in respect of infrastructure development is made for various years including those in which the matter of allowability of deduction is pending before the ITAT or the High Court. Since the issue of allowability of deduction in respect of these amounts is not abated, the claim of deduction under section 153A cannot be allowed and will be subject to the decision given by the Honourable Tribunal or the High Court as the case may be. However, in respect of new claim made by the appellant including additional claim on account of declarat....
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.... the assessing officer is directed to check the computation of the claim and then allow the same . 120. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 121. The Ld. Departmental Representative strongly opposed the order of the CIT(A). She submitted that the assessee is only a works contractor and not a developer as per Explanation below 80IA(13), therefore, deduction u/s.80IA(4) amounting to Rs. 7,88,92,588/- should not have been granted by the CIT(A). 122. As regards the allowance of deduction u/s.80IA(4) amounting to Rs. 21,93,856/- out of the additional income declared during the course of search proceedings is concerned the Ld. Departmental Representative submitted that the additional income so declared is on account of expenses from unexplained sources which attract provisions of section 69C. Therefore, the CIT(A) was not justified in allowing deduction u/s.80IA(4) on such additional income. She accordingly submitted that the order of the CIT(A) be reversed and that of the order of the AO be restored. 123. The Ld. Counsel for the assessee on the other hand strongly supported the order of the CIT(A). He submitted that assessee takes up ir....
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....(4) in the assessment proceedings u/s.153A. He submitted that it has already been clarified that the assessee had debited bogus bills to generate cash for meeting various expenses as per the seized papers. This was admitted right from the search and it is accepted by the AO in the assessment. The bogus bills debited for generating cash are to be disallowed and thus this results in increase in income from business of the assessee. Thus the addition is made by the AO not u/s.69C as wrongly stated by the department in the grounds of appeal. As the business income is increased in the assessment the deduction u/s.80IA(4) has to be increased correspondingly. For the above proposition the Ld. Counsel for the assessee relied on the decision of Hon'ble Bombay High Court in the case of CIT Vs. Gem Plus Jewellery India Ltd. reported in 330 ITR 175, the decision of Hon'ble Bombay High Court in the case of CIT Vs. Sheth Developers Pvt. Ltd. reported in 254 CTR 127 and the decision of the Pune Bench of the Tribunal in the case of Malpani Estates Vs. ACIT vide ITA No.2296 to 2298/PN/2012 order dated 30-01-2014 for A.Y. 2008-09 to 2010-11. In all these cases the question involved was regarding ded....
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....to deduction u/s.80IA(4), We find the Ld.CIT(A) allowed the claim of the assessee by relying on various decisions on the deduction claimed u/s.80IA(4) in the return as well as on the additional income declared. 128. We do not find any infirmity in the order of the CIT(A) in allowing the claim of deduction u/s.80IA(4) as per the return as well as the deduction on the additional income. So far as the claim of deduction u/s.80IA(4) considering the irrigation project of the assessee as an infra project is concerned we find the issue has already been decided in favour of the assessee in assessee's own case for A.Y. 2003-04 vide ITA No.433/PN/2007 order dated 06-02-2012. The relevant observation of the Tribunal from Para 7 to 9 reads as under : "7. We find that the Hon'ble Jurisdictional High Court in the appeal preferred by the assessee has been pleased to restore the matter to the file of the Tribunal for fresh decision on the issue in accordance with law. On earlier occasion the Tribunal had decided the issue in favour of the Revenue by relying upon the decision of Third Member Bench of the Tribunal in the case of B.T. Patil & Sons Belgam Construction (P) Ltd vs. ACIT 126 ....
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....ent, local authority or statutory body; and (iii) The start of operation and maintenance of the infrastructure facility on or after 1st April, 1995. The requirement that the operation and maintenance of the infrastructure facility should commence after 1st April, 1995 has to be harmoniously construed with the main provision under which a deduction is available to an assessee who develops or operates and maintains, or develops, operates and maintains an infrastructure facility. Unless both the provisions are harmoniously construed, the object and intent underlying the amendment of the provision by the Finance Act of 2001 would be defeated. A harmonious reading of the provision in its entirety would lead to the conclusion that the deduction is available to an enterprise which (i) develops; or (ii) operates and maintains; or (iii) develops, maintains and operates that infrastructure facility should be after 1st April, 1995. In the present case, the assessee clearly fulfilled this condition. 23. In view of which we have taken, all the assessment years in question to which this batch of appeals relates would be governed by the same principle. The subsequent amendment of sec. 80....
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....o claim the deduction in question u/s 80-IA (4). The issue is thus decided in favour of the assessee. The related grounds are thus allowed with this direction to the AO to allow the claimed deduction to the assessee. 10. Consequently the appeal is allowed." 129. Therefore, the issue as to whether the assessee being a contractor and not a developer and therefore is not is entitled to deduction u/s.80IA(4) of the I.T. Act has to be decided in favour of the assessee. 130. Now coming to the claim of deduction u/s.80IA(4) on the additional income declared is concerned the question that arise is as to whether the assessee can make a new claim during the course of assessment proceedings u/s.153A. This issue also has been decided in favour of the assessee by the decision of the Tribunal in the case of D.J. Malpani Vs. ACIT and vice versa vide ITA Nos. 1148 to 1154/PN/2013 and ITA Nos. 1183 to 1188/PN/2013 order dated 30-10-2015. The relevant observation of the Tribunal from para 52 to 53 are as under : "52. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We....
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....bal Logistics Ltd. (supra) , it has to be held that in so far as the assessment years 2003-04 and 2006-07 are concerned, assessments u/s 153A(1)(b) of the Act would be made on the basis of incriminating material, which has been explained to mean (i) books of account, other documents, found in the course of search but not produced in the course of original assessment; and, (ii) undisclosed income or property discovered in the course of search. Of course, the income so determined shall be in addition to the income already assessed in regular assessment proceedings for the said two assessment years. Now, the moot point is as to whether the impugned claim of the assessee for excluding income on account of retention money can fall in the scope and an ambit of an assessment made u/s 153A(1)(b) of theI.T Act for the assessment years 2003-04 and 2006-07. Ostensibly, as observed earlier on the basis of the decision of Special Bench of Tribunal in the case of All Cargo Global Logistics Ltd. (supra), an assessment u/s 153A(1)(b) for the assessment years 2003-04 and 2006-07 would be based on incriminating material, books of accounts, other documents found in the course of search but not produc....
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....thin the ambit and scope of impugned assessment carried out u/s 153A(1)(b) of the Act. Pertinently, the original jurisdiction vested with the Assessing Officer for the assessment years 2007-08 and 2008-09 empowers him to consider the impugned claim; and, to put it in other words, assessee was competent to raise such a fresh claim in the context of the original jurisdiction vested with the Assessing Officer, though it was not raised in the returns of income originally filed. 13. We may also consider this from another angle. As on the date of initiation of search i.e. 18-12-2008, the returns of income filed by assessee u/s 139(1) of the Act for assessment years 2007-08 and 2008-09 were pending for assessment and the impugned claimed was not made in the returns of income originally filed. So, however, u/s 139(5) of the Act, assessee was competent to furnish a revised return and make such a claim, and thus the Assessing Officer was required to entertain such a claim in the course of exercising his original jurisdiction to make an assessment u/s 143(3) of the Act. Now, consequent to search action, for assessment years 2007-08 and 2008-09, Assessing Officer not only acquires jur....
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....sent case as no fresh claim was made in the assessment proceedings, but it is a case where a claim put-forth in the return of income was only quantified during assessment proceedings and thus the Assessing Officer ought to have entertained the impugned claim. Alternatively, it is contended that the CIT(A) enjoys plenary powers of the Assessing Officer, and following the judgment of the Hon'ble Supreme Court in the case of Jute Corporation of India Ltd. vs. CIT, (1991) 187 ITR 688, the claim should have been entertained by him as the complete facts were on record. In this context, the learned counsel referred to the decision of the Pune Bench of the Tribunal in the case of Jain Irrigation Systems Ltd. vide ITA No.1319/PN/2009 dated 30.01.2012 wherein the import of the judgment of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) has been explained on the basis of the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Jai Parabolic Springs Ltd., (2008) 306 ITR 42 (Del), in the following words :- "5. We have carefully considered rival submissions. In our view, the plea of the assessee is well-reasoned, inasmuch as the judgment of th....
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....an of time allowed to us to file the return u/s. 153A, the exact quantification of the retention money could not be worked out. Hence we will submit the details thereof later. But for the time being, we submit that the retention money in the various contracts is not taxable in view of the various decisions including the decisions cited below wherein it is held that the taxability of this amount is to be considered in the year in which this amount is due to the assessee from the contractee. (a) CIT v Associated Cables P. Ltd. (2006) 286 ITR 596 (Bom.) (b) DCIT v Spirax Marshall Ltd. (2007) 109 TTJ (Pune) 593 (c) National Heavy Engg. Co. Op. Ltd. v DCIT (2007) 105 ITD 485 (Pune) Inadvertently, in the Original Return of Income this amount was not claimed as deduction. We request Your Honour to kindly grant us appropriate deduction while completing assessment. We shall submit the necessary details and quantification of claim during the course of assessment." 20. The aforesaid Note clearly depicts the claim of the assessee to the effect that the retention money in various contracts retained/deducted by the customers is not taxable; and, vario....
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....39;s impugned claim for assessment years 2007-08 and 2008-09 on the ground that the claim was made by way of a letter during the course of assessments and not in the return of income. 23. The third objection which has been raised by the Revenue is in terms of a discussion made by the CIT(A) in para 3.6 of the impugned order. According to the CIT(A), if the claim for excluding retention money was entertained and allowed, it would result in the determination of total income at a figure below the income originally returned/assessed and thus the same was not permissible. This objection of the Revenue, in our view is no bar to entertain the aforesaid claim, keeping in mind the ratio of the judgement of the Hon'ble Supreme Court in the case of CIT vs. Shelly Products & Anr., (2003) 261 ITR 367 (SC) and also the judgement of the Hon'ble Gujarat High Court in the case of Gujarat Gas Co. Ltd. vs. CIT, 245 ITR 54 (Guj). 24. On the basis of the aforesaid discussion, in conclusion we hold that in so far as the assessment years 2007-08 and 2008-09 are concerned, the claim of the assessee for exclusion of income on account retention money withheld by contractees/custome....
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....r Chapter VIA as the case may be, shall be granted on such enhanced income. 133. We find the Hon'ble Bombay High Court in the case of Gem Plus Jewellery India Ltd. reported in 333 ITR 175 has observed as under ; "11. For the purposes of the appeal it is necessary to refer to the admitted position which is that the assessee had deposited both the employer's and the employees' contribution towards Provident Fund and ESIC, though beyond the due date including the grace period. The Assessing Officer added these payments to the total income of the assessee and made an addition in the amount of Rs. 71.59 lacs. However, for the deduction under Section 10A, the addition made on account of the employees' contribution was ignored in calculating the profits eligible for deduction on the ground that these receipts were not generated out of the manufacturing activity of the assessee company. 12. By reason of the judgment of the Supreme Court in Commissioner of Income Tax v. Alom Extrusions Limited4 the employer's contribution was liable to be allowed, since it was deposited by the due date for the filing of the return. The peculiar position, however, as it o....
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....ces of the case and in law the Tribunal was justified in holding that deductions u/s. 80IB (10) has to be allowed from the income computed as undisclosed income u/s. 69A of the Income Tax Act, 1961? (2) Whether on the facts and circumstances of the case and in law the Tribunal was justified in allowing the claim of deduction u/s. 80IB(10) where no such claim is made by the assessee in the return of income for the block period? 3. The appeal is admitted on Question (1) and (2). 4. At the instance of the Advocates for the appellant and the respondent the appeal is taken up for final disposal. 5. So far as Question (2) is concerned, it is an admitted position between the parties that the same stands covered in favour of the respondent-assessee and against the appellant revenue by virtue of the order of this court in CIT v. Pruthvi Brokers & Shareholders (P.) Ltd. [2012] 23 taxmann.com 23. In the above case it has been held that a fresh claim could be urged before the Appellate authorities even if the claim was not made in the return of income filed before the Assessing officer. 6. The facts relevant for the purpose of question (1) are brief....
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....id Act. The Tribunal relied upon the decision of the Madras High Court in the matter of Anbu Textiles v. Asstt. CIT [2003] 262 ITR 684. 7. Mr. Vimal Gupta, counsel for the appellant submits that the order of the Tribunal is unsustainable as benefit of the deduction under Chapter VIA of the Act cannot be extended to an assessee who has not originally disclosed his income but seeks its benefit while filing a block return under Chapter XIV B of the said Act subsequent to the search under the said Act. In support of the above reliance was placed upon the decision of the Gujrat High Court in the matter of Fakir Mohmed Haji Hasan v. CIT [2001] 247 ITR 290. In the above case unexplained gold valued at Rs. 48.72 lacs found in possession of the party was added to the party's income under Section 69, 69A, 69B and 69C of the Act. As the unexplained gold was confiscated the assessee sought a deduction on account of confiscation of gold as a loss. The Court held that such undisclosed /unexplained amounts did not fall under the head of profits and gains of business or profession and therefore, no deduction is available. On the basis of the above decision, it is the contention of Mr. Gup....
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....that the words "this Act" in parenthesis were substituted by the Finance Act of 2002 with retrospective effect from 1/7/1975. Prior to the above amendment the words were "Chapter IV". Further the proviso was also added to the explanation by the Finance Act 2002. 10. Chapter XIVB of the said Act provides for special procedure for assessment of search cases and is contained in Section 158B to Section 158BI of the said Act. Further, this chapter applies only in cases of search initiated before 31/5/2003.In this case, the search took place in 2002 and therefore, the present case is governed by Chapter XIVB of the said Act. Section 158BB of Chapter XIVB of the Act deals with computation of undisclosed income of the block period. The above explanation to sub section (1) of Section 158BB of the Act was amended by the Finance Act, 2002 with retrospective effect from 1/7/1995. Prior to the amendment, according to the explanation the total income or loss was to be computed in accordance with Chapter IV of the said Act. Consequent to the amendment by Finance Act, 2002 with retrospective effect from 1/7/1995 the total income or loss has to be computed in accordance with the provisions....
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....e and against the appellant-revenue. Question (2) is answered in the affirmative in favour of the respondent-assessee and against the appellant-revenue. 135. We find the Pune Bench of the Tribunal following the above 2 decisions in the case of Malpani Estates (Supra) has held as under : "17. In-fact, the Hon'ble Bombay High Court in the case of Sheth Developers (P) Ltd. (supra) was considering the claim of deduction u/s 80IB(10) of the Act in relation to the undisclosed income declared consequent to the search action. In the case before the Hon'ble High Court, it was factually emerging that undisclosed income was earned by the assessee in the course of carrying on his business activity of a 'builder' and the same was accepted by the Department, but the claim of the deduction u/s 80IB(10) was denied in relation to such income. However, the claim was upheld by the Hon'ble Bombay High Court. In the present case, factually, there is no material to negate the assertion of the assessee, which are borne out of the material on record, that the additional income in question has been received in the course of carrying on its business activity of developing the housing....
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....ssessee such as details of erection, civil work for it, labour charges for erection and installation etc. the AO noted that the assesee has claimed depreciation on entire expenditure on account of purchase and its installation. According to the AO higher rate of depreciation is allowable only on windmills whereas the assessee has claimed depreciation at higher rate on each and every rupee incurred towards windmill including civil construction and other expenses to erect windmill. He, therefore, asked the assessee to substantiate the claim of higher depreciation on such assets. The assessee submitted that there is no civil work for windmill and the civil work is for foundation upon which the windmill stands, therefore, such foundation cannot be separated from the windmill and depreciation is allowable in full. 139. However, the AO was not satisfied with the explanation given by the assessee. Relying on the decision of the Pune Bench of the Tribunal in the case of Poonawalla Finvest & Agro (P) Ltd. reported in 118 TTJ 68 disallowed cost of depreciation on Rs. 29,23,912/-. Similarly Rs. 15,92,976/- for A.Y. 2008-09, Rs. 3,51,621/- for A.Y. 2009-10 and Rs. 6,73,517/- for A.Y. 2010-1....
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....17/01/2008 c) Professional fees d) Registration fees e) Substation charges f) Franking charges g) MEDA or equivalent charges above table. The appellant is directed to provide the cost attributable to these items for the purpose of allocation. In case the appellant is unable to provide these details in respect of supply of windmill by Enercon, the assessing officer will apply the same ratio as these items bear to total cost of a Suzlon windmill. The appeal on this ground is partially allowed". 142. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 143. The Ld. Departmental Representative strongly supported the order of the AO. 144. The Ld. Counsel for the assessee on the other hand referring to the decision of the Tribunal in the case of DCIT Vs. J-Sons Foundry Pvt. Ltd. vide ITA No.2349/PN/2012 order dated 28-01-2014 submitted that under identical facts and circumstances the directions given by the CIT(A) for computing the depreciation on windmill has been upheld and the grounds raised by the Revenue have been dismissed. He accordingly submitted that the ....
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....atil and sons Rs. 1.50 crores and A.B. Rs. 2 crores which have been recorded against respective parties in the regular books of accounts has been inadvertently included in disclosure. If these amounts are excluded then the disclosure would be only Rs. 37.8364 crores. It was pointed out that it had paid an amount of Rs. 1.50 crores to Goofy Graphics on 28-07-2006 and further amount of Rs. 50 lakhs each on 16-07-2007 and 21-07-2007. These amounts are considered in the Bhat documents as pre tender amounts. Subsequently repayments were made by cheque on 30-01-2008 and 29-04-2008 by Goofy Graphics to the assessee on account of reversal of payments, Rs. 2 crores on 05-03-2008 and Rs. 1 crore on 29-04-2008. It was stated that these transactions are included in computation on pages 38 and 29 which is the basis for making the aforesaid declaration. It was pointed out that the payments made by B.T. Patil and Sons and an entity going by the name "AB" aggregating to Rs. 5 crores should be excluded from unexplained expenses. 149. Based on the arguments advanced by the assessee the Ld.CIT(A) deleted an amount of Rs. 75 lakhs by observing as under : "71. I have given a consideration t....
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....this is not the case. This implies that cheque payments made by the appellant to Goofy Graphics are not shown as expenses in the Bhat documents though they have been recorded as having been paid by the appellant. Therefore, there cannot be a dual addition of the same amount. 72. Similarly, the appellant has provided me with a copy of Shatmurti Reality Pvt. Ltd. with Goofy Graphics. This is a running account that Shatmurti Reality Pvt. Ltd. had with Goofy Graphics belonging to Shri Kale. On 28/07/2006 there are entries of Rs. 1.5 crores and Rs. 50 lakhs given as loan by Shatmurti Reality Pvt. Ltd. to Goofy Graphics. However, these amounts do not appear in the pretender amount on pages no. 38 and 18 which, as mentioned earlier, only shows an amount of Rs. 1.5 crores as pre-tender amounts paid to Shri Kale. Even the contra entry pertaining to reversal of Rs. 2 crores, allegedly paid by AB, is not evident from the seized paper. 73. Thus, how that amount paid by cheques has been reversed is not easily evident from contents of the Bhat documents. In this context, the following observation of the Hon 'ble Bombay High Court concerning Rule of Evidence in the case of J....
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....y B.T. Patil and the share of the assessee in the said amount is Rs. 75 lakhs for which the assessee is entitled to a relief of Rs. 75 lakhs on account of payable of expenses made by the cheque is not based on any cogent evidence and proper appreciation of facts. On a pointed query by the Bench during the course of hearing, the Ld. Counsel for the assessee was also unable to clarify as to how this deduction/relief was justified on the basis of notings only on the loose paper. In view of the above, the order of the Ld.CIT(A) on this issue is set aside and the ground raised by the Revenue is allowed. 152. Grounds of appeal No.5 and 6 by the Revenue being general in nature are dismissed. ITA No.2575/PN/2012 (By Assessee) (A.Y. 2008-09) : 153. Ground of appeal No.1 and 6 by the assessee being general in nature are dismissed. The Ld. Counsel for the assessee did not press ground of appeal No.5 for which the Ld. Departmental Representative has no objection. Accordingly, the same is dismissed as 'not pressed'. 154. Ground of appeal No. 2 to 2.6 by the assessee relate to addition of Rs. 14,55,04,497 on account of disallowable expenses as per seized papers in respect of Ghodzari....
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....On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition of Rs. 817500/ - on account of unaccounted expenditure incurred by the assessee on the basis of paper seized from the residence of Shri. D A Bhat." 163. Facts of the case, in brief, are that the AO during the course of assessment proceedings noticed that the assessee had failed to consider various expenses incurred as appearing at pages 1 to 5 and 7 of the seized papers aggregating Rs. 94,17,652/-. After considering the explanation of the assessee that the Jeur Tunnel Project was jointly executed by the assessee and M/s. B.T. Patil and sons, the AO added 50% of such expenses being the assessee's share amounting to Rs. 21,24,250/- u/s.69C in A.Yrs. 2008-09 and 2009-10. In respect of the balance amount of Rs. 49,89,652/- the AO was not satisfied with the explanation of the assessee that these papers did not bear dates and hence did not pertain to the period under consideration. He therefore held 50% of the above sum, i.e. Rs. 24,94,826/- to be incurred in A.Y. 2010-11 and accordingly taxed the same. 164. Before CIT(A) the assessee submitted that page 7 of the seized paper ....
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..../01/2009. Page no. 7 contains working of interest payment on purchase of tender documents, bank guarantees for EMDs, FDs to be kept for EMDs and EMDs required for procuring mobilization advances. It appears that this is a working or estimate of money required by Mahalaxmi Construction Corporation Ltd. and B T Patil and Sons for giving various bank guarantees and meeting EMD requirements. In fact, the word 'official' is also mentioned against these workings. In my opinion, the contents of page 7 do not reflect the unaccounted expenses of the appellant and the assessing officer is directed to reduce this sum from the total for assessment year 2010-11 and thereafter work out the expenses incurred on the basis of these papers. The contention of the appellant regarding allowing a set off of these expenses from amounts declared on account of omissions and mistakes shown as contingency is accepted and the assessing officer is directed to account for these expenses in source and application for the relevant assessment year and tax the amount only if no source is available." 166. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 167. The Ld. CIT DR st....
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.... the addition. We do not find any merit in the above logic of the Ld.CIT(A). Admittedly, the papers containing certain expenditure with dates mentioned therein are not considered by the assessee while working out the unaccounted income. During the hearing before us, the Ld. Counsel for the assessee was also not in a position to clarify the basis of deletion made by the CIT(A) and justify such deletion. In view of the above we reverse the order of the CIT(A) on this issue and the ground raised by the revenue is allowed. 170. Ground of appeal No.3a and 3b by the Revenue read as under : "3. a) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction under sec. 80IA(4) of Rs. 24,03,21,259/- which was earlier confirmed by the Ld. CIT(A) as well as the Hon'ble ITAT for A.Y. 2004-05 and 2005-06 as the assessee is only a work contractor and not a developer as per the explanation below 80IA(13). b) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction under sec. 80IA(4) of Rs. 67,33,791/- which is the additional income declared during the course of search proceedings, o....
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....ts. In view of the above and in view of the detailed reasoning given by the Ld.CIT(A) while confirming the addition of Rs. 58,45,436/- on account of undervaluation of work-in-progress we find no infirmity in the same. Ground raised by the assessee on this issue is accordingly dismissed. 175. Grounds of appeal No.4 and 5 by the assessee read as under : "4] The learned CIT(A) erred in holding that 60% of the cost of Power Evacuation facility and infrastructure cost would be entitled to depreciation at the rate applicable to building and not at the rate applicable to windmill. 4.1] The Ld.CIT(A) failed to appreciate that the expenditure on Power Evacuation facility and infrastructure cost was part and parcel of windmill and hence, the entire expenditure was entitled to depreciation at a higher rate which was available to windmill. 5] The Ld.CIT(A) erred in directing to apportion the other misc. expenses between windmill cost and infrastructure cost without appreciating that all the expenses incurred by the assessee were relating to windmill and therefore, all such misc. expenses should have been allowed depreciation at the rate applicable to windmill." ....
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....hould have filed the return of income on or before 31-10-2009. Since this was not done the assessee was liable to pay interest u/s.234A. He accordingly dismissed the grounds raised by the assessee. 180. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 181. The Ld. Counsel for the assessee submitted that when the search took place on 23-09-2009 the due date for filing of the return u/s.139(1) had not expired. The assessee in response to notice u/s.153A filed his return of income on 21-07-2010. He submitted that after the search the assessee is required to file return u/s.153A only. Hence, there is no question of filing any return u/s.139(1). Therefore, there is no delay in filing the return and therefore levy of interest u/s.234A is not justified at all. He submitted that as per the provisions of sub-section (3) of section 234A the interest can be levied for the default in not filing the return u/s.153A within the time limit prescribed in the section. Therefore, when the notice u/s.153A was served on the assessee on 06-07-2010 asking the assessee to furnish the return of income within 30 days from the receipt of notice and when the assessee has file....
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.... (3) read as under : "(3) Where the return of income for any assessment year, required by a notice under section 148 [or section 153A] issued [after the determination of income under sub-section (1) of section 143 or] after the completion of an assessment under sub- section (3) of section 143 or section 144 or section 147, is furnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of [one] per cent, for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time allowed as aforesaid, and,- (a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or (b) where no return has been furnished, ending on the date of completion of the re-assessment or re- computation under section 147[ or reassessment under section 153A], on the amount by which the tax on the total income determined on the basis of such re-assessment or re-computation exceeds the tax on the total income determined [under sub- section (1) of section 143 or] on the basis of the earli....
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....other documents for that might be useful and or any assets representing withholding or part income or property which has not been or would not have been disclosed for the purpose of the Indian Income Tax Act, 1922 or the Income Tax Act of 1961 by any person from whose possession or control they have been taken into custody. This is when the authorities have reason to believe that such powers need to be exercised. Therefore, the fetters and which are to be found in other provisions are removed and a notice of assessment in such cases is then issued. That is mandated by sub-section (1) of section 153A. It is not only the issuance of the notice but assessment or reassessment of total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition has to be made." 187. A combined reading of the above provisions as well as the decision cited (Supra) indicates that a non-obstante clause has been inserted and with a defined intent. In our opinion, once the search takes place on a person and the due date for filing of the return u/s.139(1) has not expired he can file the return only after the issue o....
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....discharged of such liability to the extent of money so applied. In the instant case, the money so seized was kept in the PD account of the CIT. The assessee vide letter dated 30-03-2010, addressed to the AO, a copy of which is placed at page 261 of the paper book has requested the department for appropriation of the seized cash towards advance tax for A.Y. 2010-11. Under these circumstances, we are of the considered opinion that such cash so seized can only be appropriated towards advance tax for A.Y. 2010-11. The AO is directed to give credit of the seized cash towards advance tax for A.Y. 2010-11 only and not for A.Y. 2008-09 as requested by the assessee. The decision of the Pune Bench of the Tribunal in the case of Pushpendra Subhas Chandra reported in 37 CCH 127 and relied on by Ld. Counsel for the assessee also speaks of the same, i.e. from the date of request made by the assessee to the AO for treatment of the cash seized. The ground raised by the assessee on this issue is accordingly dismissed. ITA No.55/PN/2013 (By Revenue) (A.Y. 2009-10) : 193. Ground of appeal No.1 by the Revenue reads as under ; "1. On the facts and in the circumstances of the case and in ....
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..... Grounds of appeal No.4 and 5 being general in nature are dismissed. ITA No.2577/PN/2012 (By Assessee) (A.Y. 2010-11) : 200. Grounds of appeal No.1 and 7 by the assessee being general in nature are dismissed. The Ld. Counsel for the assessee at the time of hearing did not press grounds of appeal No.2 and 6 for which the Ld. Departmental Representative has no objection. Accordingly, the above 2 grounds by the assessee are dismissed as 'not pressed'. 201. In grounds of appeal No.3 to 3.2 the assessee has challenged the order of the CIT(A) in confirming the addition of Rs. 70,57,702/- made by the AO on account of cessation of liability u/s.41(1) in respect of creditors outstanding for a period of more than 3 years. 202. After hearing both the sides we find the above grounds by the assessee are identical to ground of appeal No.3 in ITA No.2574/PN/2012 for A.Y. 2007-08. The facts and submissions are already mentioned therein. We have already decided the issue and the ground raised by the assessee on this issue has been allowed. Following the same reasonings the above grounds by the assessee are allowed. 203. Grounds of appeal No.4 to 5 by the assessee read as under : ....
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....raised by the Revenue on this issue has been allowed. Following similar reasonings this ground by the Revenue is allowed. 209. Ground of appeal No.3a and 3b by the Revenue read as under : "3. a) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction under sec. 801A(4) of Rs. 244532117/- which was earlier confirmed by the Ld. CIT(A) as well as the Hon'ble ITAT for A.Y. 2004-05 and 2005-06 as the assessee is only a work contractor and not a developer as per the explanation below 801A(13). b) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction under sec. 801A(4) of Rs. 152787220/- which is the additional income declared during the course of search proceedings, on account of expenses from unexplained sources which attract provision of S. 69C of the Income Tax Act which is not an income from the business of undertaking referred to in sec. 801A(4)." 210. After hearing both the sides we find this ground by the Revenue is identical to ground of appeal No.2a and 2b in ITA No.53/PN/2013 filed by the Revenue for A.Y. 2007-08. We have already decided the issue and ....
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....tion statement while working out undisclosed income of Rs. 24.71 crores in its hands. It was pointed out that the AO had already taxed the entire Ghodzari project expenses and taxing the cash found had resulted in double addition of the said amount. 216. Based on the arguments advanced by the assessee the Ld.CIT(A) directed the AO to verify the source and application statement on the basis of which undisclosed income has been offered and in case there is no surplus available then the entire amount will be taxed as unexplained cash found. The relevant observation of the CIT(A) at para 79 and 80 of the order reads as under : "79. I have considered the submission of the appellant. The assessing officer has made this addition on the ground that since the speed money payments were already made and the assessee has not made any declaration of an amount over and above the money already expensed out, the source of Rs. 2.05 crores found in the course of search and seizure was unexplained. In appellate proceedings, the assessee has given a chart showing the source and application of money while working out the disclosure of undisclosed income of' 24.17 crores. The assessee ha....
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.... of the case, in brief, are that the AO during the course of assessment proceedings observed that while making the claim of deduction under section 80IA(4)(iv), the assessee had ignored the provisions of 80IA(5) which provided that the profit and gain of eligible business should be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year upto and including the assessment year for which the determination is to be made. It is mentioned in the order that the assessee is in the business of civil construction and in the year of installation of wind mill the unabsorbed depreciation of windmill was claimed and allowed against profit of such other business. Further the assessee had shown profit from windmill for subsequent years. The Assessing Officer reworked the manufacturing and profit and loss account in respect of windmill as per provisions of section 80IA(5). He observed that as per this working that even at the end of the assessment year under consideration, there was unabsorbed depreciation of Rs. 15,15,28,827/-. Based on the above observation, the cl....
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....sue is decided in favour of the assessee. The assessee is entitled to claim for deduction u/s.80IA(4)(iv)(a) of the Act. 85. Thus, in view of the identical facts and circumstances, decision of the Hon'ble ITAT reproduced above is applicable to the instant case also. The disallowances made for the assessment years under appeal are therefore, deleted. This ground of appeal is allowed." 223. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 224. After hearing both the sides, we find an identical issue had come up before the Tribunal in case of the sister concern of the assessee namely ACIT Central Circle, Kolhapur Vs. R.D.S. Construction Pvt. Ltd. and vice versa in ITA Nos. 377 to 383/PN/2013 and ITA Nos. 2578 to 2581/PN/2012 for A.Yrs. 2007-08 to 2010-11 order dated 06-11-2015. We find the Tribunal at para 135 and 136 of the order has discussed the issue and the ground raised by the Revenue on this issue was dismissed. The relevant observation of the Tribunal reads as under : "135. After hearing both the sides, we find the issue as to whether initial assessment year u/s.80IA(5) means year of installation of windmill or year in which t....
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..... From the above provisions of sub-s. (2) of s. 80-IA of the Act, it is evident that the assessee is granted the option to select 'initial assessment year' i.e., first assessment year of the 'any ten consecutive assessment years out of fifteen years'. Starting assessment year for counting the duration of fifteen years is also provided in the said sub-section. As per these provisions, the assessee is not allowed to jump the assessment year once an initial assessment year is opted. Therefore, we find no fault with the assessee in selecting the asst. yr. 2004-05 as the 'initial assessment year'. In this regard i.e., on the issue of assessee's option to select the 'initial assessment year', we have perused the citations relied upon by the assessee's counsel. The conclusion by the Tribunal Mumbai Bench decision in ITA No. 4620/Mum/2007 (asst. yr. 2004-05) in the case of Dy. CIT vs. Ushdev International Ltd., is straight on this issue of initial assessment year and the option to the assessee and the held portion of the decision reads as under : "In view of the above learned CIT(A)'s order to the extent of holding that initial assessment year and subsequent succeeding assessment ....