TaxTMI 
TaxTMI 
2017 (2) TMI 1098
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.... • Government of Andhra Pradesh, Irrigation and C.A.D. Department Indira Sagar Pkg-60 (Development of Irrigation Canals) 5. By the impugned order CIT(A) allowed assessee's claim after observing as under:- The A.O relied on the decision of ITAT, Mumbai in the case of M/s.B.T.Patil & Sons Belgaum Construction Private Ltd vide ITA No. 140B & 1409/PN/2003 dated 26.10.2009. However, the said decision was overruled by the same tribunal vide its later decision in the same case vide ITA No. 1408 & 1409/PN/2003 dated 28.2.2013. The sequence of events that lead to the later decision is mentioned in paragraph No. 6.1 above. The Tribunal allowed the deduction u/s.80IA(4) of the Act on the ground that the assessee executed the work by shouldering investment and technical risk by employing team of technically and administratively qualified persons and it is also liable for liquidated damages. The relevant paragraphs No. 8 and 9 of the order is reproduced as under: "8. In the case of ABG Heavy Industries, the assessee therein had not developed the entire port but was only the supplier of cranes at the loading and unloading terminal at the said JNPT port. Thus assessee was not req....
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.... termed as developer for the purpose of section 80IA has been followed by various Tribunals." 7.2 During the course of appeal proceedings, the appellant filed copies of the agreements substantiating the following: i) Involvement in making investment ii) Shouldering technical risk iii) Liquidated damages iv) Employment of technically and administratively qualified team 7.3 The appellant cited relevant clauses in the tender documents to substantiate that the above conditions as laid down in the case of M/s.B.T.Patil & Sons Belgaum Construction Private Ltd. is fulfilled. Payment of security deposit, earnest money deposit, interest bearing advances in the form of mobilization advance as well as the advances against machinery and plant by the Northern Frontier Railway to the appellant at 18% per annum, liability to reimburse compensation of workmen, discretion of the appellant to source men and material as per appellants expertise and experience are shown as examples for investment risk. Liability of the contractor to maintain safety precautions, responsibility to undertake study reports to assess the reliability and accuracy of the information,....
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....the subsequent year, i.e. AY. 2009-10. In that assessment year also the deduction was initially rejected by the Assessing Officer but ultimately allowed by the Hon'ble Tribunal. 8. We had carefully gone through the orders of the authorities below as well as order of the Tribunal placed in the Paper Book. The Hon'ble Tribunal have dealt with the provisions of S.80IA(4) of the Act, the facts of the projects undertaken by the assessee and after detailed analysis have held that the assessee is eligible for deduction u/s. 80IA(4) of the Act. Respectfully following the above referred two orders of the Tribunal which pertain to earlier years, i.e. AY. 2005-06 to 2007 -08 as well as for later year i.e. A.Y. 2009-10 wherein the same projects have been held to be eligible for deduction and the assessee has been held to be developer, the assessee's claim have been rightly allowed by the CIT (A). Respectfully following the order of the Tribunal in assessee's own case, we do not find any infirmity in the order of CIT(A) for allowing assessee's claim for deduction u/s.80IA(4) during the year under consideration. 9. The assessee has raised two grounds in its appeal, the same are....
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....ar There is no dispute on this. 7 1 crore On account of other contingency and discrepancies found in the group concern for current year No further details or break-up given. This amount is in dispute 12. However, while filing return of income the assessee retracted from the above statement qua the following two items: (a) The adhoc disclosure of income of Rs. 3 crores In the hands of assessee for A.Y. 2008-09. (b) Adhoc disclosure of the income of Rs. 1 crore in the hands of group concerns. 13. During the course of assessment proceedings, the assessee was asked to give break-up of Rs. 3 crores for which the declaration was made. As there was no such income earned by the assessee, the assessee's representative gave the break-up of Rs. 3 crores which primarily includes statutory disallowances and part disallowance of its claim u/s. 80IA(4) of the Act as well as certain expenditure outside the books of account as per various seized annexures. The break-up given during the course of assessment proceedings have been reproduced by the Assessing Officer on page No. 5 of his order, the same is as under: Particulars A.Y. Amount On account....
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....enied by the Assessing Officer. 17. Against the above order of CIT(A), assessee is in further appeal before us. 18. It was contended by learned AR that all the figures appearing in the table in Annexure-A to the assessment order have been explained. It has been already explained that the first two figures pertain to earlier assessment years. It has been reiterated that the addition cannot be sustained on this basis. In any case, there are no evidence to support the adhoc declaration of Rs. 3 crore and Rs. 1 crore. 19.The AR read the grounds of appeal and gave a brief background of the case. The AR gave reference of that letter dated 12.12.2007 which was sought from the A.D. The AR referred to page 3 of the paperbook (Assessee Appeal) filed on 09.11.2015 wherein the oath of Mr. Abhijit Avarsekar, MD of Unity Group is reproduced. The reason for which the letter dated 12.12.2007 was sought in earlier hearings leading to adjournments, was misconceived by the DR. It was brought to the Hon'ble Members attention that the letter dated 12.12.2007 did not provide the break-up of additional income of Rs. 9.5 cr offered. Attention was invited to Page 6 of the paper book (assessee ....
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....Annexure 4 has been offered to tax in earlier years which amounts to approx. 1.43 cr. As such additional income of Rs. 1.5 crores is offered to tax in earlier years and there is no dispute for that amount. The AR then showed the breakup of 3 crores pertaining to the assessment year under consideration as restated in the assessment order. The appellant was asked to provide a break up of 3 crores. The AR referred to the table on page 5 of the assessment order wherein the breakup of the disclosure of Rs. 3 crores was given by the assessee. The break up provided by the appellant stated that Rs. 3 crores included disallowances under section 14A , 36(l)(va) and disallowance of claim under section 80lA. The balance amount remaining of Rs. 3 crores was disclosed on account of A-OS, A-ll, A-12 and A- 22 being seized material. The AR said that the claim u/s.80IA is a legal ground and it is to be considered separately. As such it cannot be part of the disclosure of Rs. 3 crores. The AR argued that there is no evident break up of Rs. 3 crores but since the appellant was hard pressed to provide a break-up of the Rs. 3 crores, he submitted the table as reflecting on page 5 of the assessment orde....
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....p were found at his premises. The DR said that Mr. Ujjwal Gupte was the person who used to make the necessary arrangements on behalf of the Unity Group being a confidante of Unity Group. Due to the material found at his premises the MD of Unity Group had to disclose the amount. The DR further added that the unaccounted amount which is disclosed during search will go untaxed and that is why the amount is added in the assessment order even though the same is not offered by UIL in its Return of Income. The DR referred to Annexure-A on page 13 of the assessment order which gives details of the seized material. An amount of Rs. 1,21,23,601/- and Rs. 51,16,757 is on account of A-2 and A-3 respectively of the seized material. Annexure-A further reflects amounts of Rs. 1,99,850/-, Rs. 5,17,000/-, Rs. 23,42,900/- and Rs. 3,88,377/- on account of Annexure A-8, A-11, A-12 and A-22 being part of sized material. The DR further states that the aggregate of Annexures amount to Rs. 2,06,88,485/-. The DR also states that thus the appellant has disclosed an income of Rs. 3 crores to cover up all the discrepancies. 25. We have considered rival contentions and carefully gone through the orders of t....
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....dition made by him. 29. Now, coming to other four figures mentioned in Annexure-A to the assessment order, we found that these figures pertain to Annexure A-8, A-11, A-12 and A-22 which falls in A.Y. 2008-09. As per our considered view, the same is required to be added in the year under consideration. Therefore, to this extent i.e. Rs. 1,99,850/-, Rs. 5,17,000/-, Rs. 23,42,900/- and Rs. 3,88,377/- the addition has to be confirmed in the year under consideration. We direct accordingly. 30. Now coming to the break-up of Rs. 3,00,00,000/- given by the assessee during the course of assessment proceedings which has been reproduced by the Assessing Officer on page No.5 of the assessment order, we found that the first two items of the table i.e. Rs. 25,98,406/- and Rs. 17,476/- have been added by the Assessing Officer to the total income of the assessee separately and, hence, no such addition could be made as a part of additional income declared. Further, the Assessing Officer himself has stated that the statutory disallowance cannot form part of the declaration and, hence, he has rejected such break-up. Here, we are in agreement with the view of the Assessing Officer that statutory....
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....sion was voluntary and was not under a mistaken belief of fact or law and that the assistance had enough time to go through the facts of their case, law applicable in their case and take advice from their counsels and advisors before filing the letter of surrender of undisclosed/unaccounted income and that the admission by them was final and binding on them,' The co-ordinate Jaipur Bench of the Tribunal, after overall appreciation of the fact and evidences before it observed that the assessee's surrender was not based on any incriminating material and that the discloser being not voluntary and extracted by the department in creating a coercive situation cannot be relied solely to be basis of addition as undisclosed income. The co-ordinate bench of the Tribunal while relying upon various case laws of the higher authorities observed that it is well settled legal position that merely on the basis of a statement which is not supported by the department with cogent corroborative material cannot be a valid basis for sustaining such ad-hoc addition. The co-ordinate Jaipur Bench of the Tribunal (supra) further observed that the issue of existence of pressure, threat coercion during....