TaxTMI 
TaxTMI 
2018 (7) TMI 213
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.... of the Act to the learned AQ, although the issues were duly considered by the learned AO pursuant to directions of Hon'ble Nagpur Tribunal vide order dated 28/08/2015 (ITA No.115/Nag/2013) in Assessee's own case for AY 2008-09 and after examining all the documents/submissions, the learned AO found the Assessee eligible for deduction u/s 80lA(4)oftheAct. 4. Without prejudice to aforesaid grounds, the learned Pr.CIT has erred in observing that the Assessee did not bear the cost of the project/contract, which is incorrect and contrary to the evidences placed on record. 3. In this case earlier an order was passed by the ITAT, wherein the ITAT had modified an order passed by the ld. Commissioner of Income Tax u/s. 263 for the same year in the case of the same assessee vide order dated 28.08.2015. In the adjudication the ITAT had held as under: 8. Learned Commissioner has perused the said assessment order but he was of the opinion that instead of considering the correctness of the computation of the deduction the Assessing Officer was expected to first examine whether the assessee was eligible for the deduction as prescribed under section 80IA(4) of I.T. Act....
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.... by the Assessing Officer as we have already mentioned herein above. The allegation of the learned Commissioner was that the contract between the assessee and MSEDCL was a "contract agreement". The assessee was submitting the monthly bills and receiving about 90% of the billing amount. Due to the said reason the learned Commissioner has applied the Explanation inserted by Finance Act, 2007 which was with effect from 01-04- 2000. As per the said Explanation, it is provided in the statute that for removal of doubt it was declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) of section 80IA which is in the nature of "works contract". According, to us the Revenue Department is expected to examine few things to ascertain whether the assessee is a developer or a contractor such as the utilization of funds, development of project, the nature of venture, the substance of the transaction etc. Moreover the provisions of section-80IA also require a finding to the effect that whether the assessee as an enterprise carried out the business of developing a project or the assessee has developed, maintain and also operating the project.....
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....order, the Assessing Officer referred to the directions of the ITAT to follow the guidelines in the case of ABG Heavy Industries Ltd. 322 ITR 323. Thereafter, he referred to the decision of the Hon'ble Bombay High Court and held as under: The facts of the case were tested against the parameters fixed by above judicial decisions. The assessee's submission is kept on record. On verification of records submitted by the assessee, following facts were emerged: 1. It is seen from the invitation to Bid, contract is a allocated on Turnkey basis including supply, erection, testing, transportation, construction and commissioning with bank gurantee for defect liability period for work done. Which is apparent from Tender notice bearing no "SE/O&M/WRD/TECH /07- 8/T-01 to T-07", dated 15-12-2007. 2. Complete payment will be relieved after completion of the gurantee test and commissioning of the complete work and issue of the taking over certificate; Balance payment will be released after successful completion of work. 3. The contracts are awarded to the assessee on Turnkey basis and assessee is solely responsible for completion of contract. 4.....
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.... the competent authority. Then we have to issue completion certificate duly sign by completion authority the copy of certificate were also enclosed herewith the document submitted to the income tax officer after the submission of the certificate the department take over the work and then they we raised the bill. After submitting the bill the departments after deduction 10% retention money Nearly bills where paid after 3 months after submission of the final bills and make the remaining payment to the assessee from his own funds." 6. However, the ld. Commissioner of Income Tax (Appeals) was not convinced. He observed that the period of three months was quite normal in Government sector contract payment to contractor. The ld. Commissioner of Income Tax proceeded to conclude as under: Therefore, in exercise of the powers vested in me under section 263 of the Act, I set aside the order on the above issue with a direction to examine the matter in the light of above discussion and to pass appropriate order. The Assessing Officer may also examine the case from the other perspectives arising out of the decision of the Hon. ITAT. The assessee should be given a fair chance of bein....
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....the learned AO is enclosed at Page 18 to 20 of Factual Paper Book. The Assessee had filed an index of documents submitted vis-a-vis each parameters of the issue to be examined before the learned AO [Refer Page 22 to 23 of Factual Paper Book]. * The Assessee had provided its remarks in the index as to relevance of various documents submitted. The Assessee was awarded the contract by Maharashtra State Electricity Distribution Company Ltd (MSEDCL) on "Turnkey basis" for energisation of Agricultural Pumps on a single point responsibility of the Assessee. The Assesseehad executed a full 'Turnkey contract" including suppl. erection, testing, transport, construction and commissioning with 2-5 years bank guarantee for defect liability period for work done. * That no advance was given to the Assessee for execution of the project. As per payment schedule, 90% of the payment was to be released after successful completion of the guarantee test and commissioning of the work and issuance of taking over certificate by MSEDCL. The remaining 10% of the payment was released after successful completion of the entire contact and post defect liability period. It was submitted befo....
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....the Act and revising the order passed by the learned AO under section 143(3}r.w.s254 of the Act. The Assessee had filed submissions before the learned CIT[Refer Page 14 to 17 of Factual Paper Book].The Assessee had submitted that the order passed by the learned AO was neither erroneous not prejudicial to the interests of the Revenue and hence invoking provisions of section 263 was bad in law. The Assessee had submitted before the learned CIT that the learned AO had made complete enquiries and examined the issues as per directions of Hon'ble Nagpur Tribunal and following binding judicial precedents. The learned AO found the Assesses eligible for the claim of section 80IA(4) after proper application of mind. 1.6 The learned CIT did not point out any defect in the enquiry made by the AO based on examination of the documents submitted by the Assessee. The only objection of the learned CIT was that the Assessee had raised RA Bills on MSEDCL for work completed and duly certified. The learned CIT erred in observing that the Assessee had not completed the contract from his own funds. The Assessee had submitted before the learned CIT that it had employed his own funds to purcha....
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....387 ITR 691) (Bom) 4. CIT vs. Sunbeam Auto Ltd. (332 ITR 167) (Del) 5. DIT vs. Jyoti Foundation (357 ITR 388) (Del) 6. Narayan Tatu Rane vs. ITO (70 Taxmann.com 227) (Mum-ITAT) 7. Amira Pure Foods Pvt. Ltd. vs. PCIT (51 CCH 473) (Del-ITAT) 10. Per contra, the ld. Departmental Representative relied upon the orders of the ld. Commissioner of Income Tax. 11. Upon careful consideration, we note that earlier the ITAT had modified the direction of the ld. Commissioner of Income Tax u/s. 263 in the case of the same assessee, for the same year. The ITAT has discussed the issue and after the discussion, it held that the issue in the said case needs to be re-examined by the Assessing Officer. The ITAT inter alia discussed the Hon'ble Bombay High Court decision in the case of ABG Heavy Industries Ltd. (supra). It noted that the Hon'ble Bombay High Court has mentioned that the assessee is expected to shouldering out the investment and also subjected to technical risk in respect of work executed. It has further mentioned that to keep brevity in mind it is not advisable to discuss all the parameters in this regard but to leave it to the Revenue a....
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....n this regard is totally unsustainable. Furthermore, we find that in his concluding remark the ld. Commissioner of Income Tax has further stated that the Assessing Officer is directed to examine the matter in the light of the above discussion. He further stated that the Assessing Officer may also examine the case from the other perspective arising out of the decision of the ITAT. We find that this clearly shows that the ld. Commissioner of Income Tax is sitting in appellate forum over the ITAT decision in this case, which is totally unsustainable. Furthermore, it also shows that the ld. Commissioner of Income Tax has not appreciated the ITAT order and the Assessing Officer's order pursuant thereto and he is ordering a rowing and fishing enquiry, not sustainable in law. This view draws support from the Hon'ble Bombay High Court decision in the case of CIT vs. Gabriel India Ltd. [1993] 203 ITR 108 (Bom). 13. Furthermore, we find that the Assessing Officer in this case has duly examined the issue in light of the directions of the ITAT in this case which inter alia made reference to the ABG Heavy Industries Ltd. (supra). The Assessing Officer has duly opined that the assessee's ....