AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 1760
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....is based on whims and fancies of the revising authority as there is no material on record to suggest that the order is erroneous in so far as it is prejudicial to the interest of the revenue. 3. That the order of the Pr Commissioner of Income Tax-I lacks from judicial consistency as the said deduction u/s 80A has been allowed by the subsequent assessing officers for the A/Y 2013-14 after scrutinizing all the details, making enquiries, proper verification and consideration of the entire material on record had allowed the claim of the assessee after due application of mind. 4. That the final issues on which jurisdiction has been assumed u/s 263 does not find mention in the show cause notices which is bad in law. 2. The ld. AR inviting attention to the assessment order dated 20.12.2014 submitted that it has been passed by the AO with due application of mind and after carrying out a full inquiry on the issues which are a subject matter for consideration by the Pr. CIT-I Chandigarh exercising his Revisionary powers. 2.1 In the facts of the present case, it was submitted, that the order was not maintainable. Reliance was p....
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....rd by the Pr. Chief Commissioner of Income Tax to show that the order passed by the AO was either erroneous or prejudicial to the interests of the Revenue. It was submitted that the AO had considered the contract entered into by the assessee in 2011-12 Assessment Year and considering the facts, assessment order u/s 143(3) dated 20.12.2014 had been passed. Considering the new contracts entered into by the assessee, the AO after scrutinizing all details and after making necessary inquiries, accepted the assessee's submission that the new contracts were also identical and were Infrastructure development and maintenance contracts. Thus, after due enquiry, the view taken in 2011-12 assessment year had been followed. Nothing has been referred to in the impugned order that the view was incorrect. 2.4 It was submitted by the ld. AR that it is an admitted fact that in 2011-12 assessment year, the issue came up before the ITAT wherein considering the similar activity carried out by the assessee but only in respect of one project i.e. Thural Project, the ITAT struck down similar exercise of power by Pr. CIT vide its order dated 06.02.2017 in ITA 361/CHD/2016. Th....
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....similarly worded Contract as a "Works Contract" and had held that exemption has been granted by the AO on erroneous facts without due application of mind and on the basis of inadequate inquiry and without considering the Contract. Even in the said year, the AO was castigated for granting relief without making any enquiry. The ITAT in the order dated 06.02.2012 in ITA 361/CHD/2016 held that it was not a case of inadequate enquiry. Inviting attention to para 4 of the synopsis filed, it was submitted, that the queries raised and details made available to the AO which are also relied upon by the Pr. CIT would show that all aspects and facts have been considered. The replies of the assessee set out in para 4 were heavily relied upon. Reading therefrom, it was submitted, that apart from the other arguments, even otherwise the assumption of jurisdiction was not maintainable as the issue which finds mention in the order was not mentioned in the show cause notice. It was submitted had it been referred, the detailed replies to queries on record would have shown that even in this regard,, the powers u/s 263 have been wrongly invoked by the Pr CIT. Since heavy reliance ....
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.... water supply scheme there is mention of new contracts in HP and Uttrakhand From this, it is very clear that, whatever has been mentioned at Serial No.1 with regard to nature of contract of Thural since last year and the same type of contract were taken at other places at Paragpur in HP at Pauri in Uttrakhand and at Rudraparyag (Uttrakhand). Thus, the AO was fully appraised of the fact that there is new contracts were taken during the year as mentioned at Serial No.2, 3 and 4 and full details were given at Serial No.1. ix. Then at page 45, the provisions of 80 IA have been explained as to how the deduction is admissible. x. Then, at page 46, the nature of contract as taken during the year under consideration from H.P. Irrigation Department and Uttrakhand Peyjal Nigam department has been explained. xi. Then again vide our reply, dated 10.10.2014 more information was desired by the Assessing Officer and other clarification was given, which is at Serial No.1 at Page 48 to 50. xii. Then, again same has been reiterated a Page 51 Serial No.1 and at Page 52 Serial No.5. Thereafter, the order u/s 143(3) was passed by the Assessing Officer and....
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....s of the fact that about the allocation of expenses etc. for exempt unit and nonexempt unit. (emphasis supplied) 2.6 Relying upon para 5 of the synopsis, it was submitted, all copies of Contract agreements along with Award Letter and schedules accompanied by site plan of development activities of the respective Infrastructure Development Project were produced before the Assessing Officer during the original assessment proceedings. It was submitted that these are undisputed facts and accepted by the Pr. CIT who also while passing the order u/s 263 as per Page 2 and 3 of the order of Pr. CIT takes note that "Contracts" along with Maps and Photographs had been filed, copies of these are at Pages 86 to 110 of the Paper Book and, then from Pages 111 to 114. Copies of certificates issued u/s 197(1) of Income Tax Act by the ACIT, (TDS) Chandigarh directing 0.5% as TDS in respect of the payment to contractor etc. for these four different Contracts entered into by the assessee at Dehra, Thural, Rudraprayag and Pauri. The certificate had been issued after considering the submissions and the specific contracts. The AO in the facts of the present case had th....
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....t the directions could have been given only after going through the different Contracts and after considering the detailed submissions, the TDS Wing had been satisfied after going through all these contracts exempt U/s 80-Income Tax Act to direct a lower deduction of TDS. 2.8 It was submitted that argument that these were infrastructure development, maintenance and operation contacts was considered by the Pr. CIT, Chandigarh and he has noticed it in page 2 of his order but still he was proceeding on suspicions and ignored this patent fact. The relevant observation from the impugned order is reproduced hereunder: 'It was forcibly argued and submitted that that the assessee is primarily engaged in the infrastructure development, maintenance and operation of development of infrastructure facilities. It was submitted that the assessee was awarded contracts by Irrigation and Public Health Department (IPH), Thural Division and Dehra Division of HP Government one/Government of Uttrakhand Peyjal Nigam, Pauri and Rudraparyag." (emphasis supplied) 2.9 The fact that similar argument has been raised before the Pr. CIT and has been ignored by the said au....
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....g out the details of the contracts from pages 5 to 8 acknowledges the fact that the ITAT has considered the similar contract of Thural Project and has held that the nature of contract is of "Development of Infrastructure Facility" and was not in the nature of a "works contract". It was submitted that the reply of the assessee has been set out in para 9 wherein the Pr. CIT has referred to the questionnaire issued by the AO in para 10 and thereafter referring to the reply dated 21.11.2014 which has been referred to at pages 1 to 14 of his order, he has set aside the proceedings avoiding the correct and true facts. Reliance was placed on para 7 of the synopsis filed in which the assessee addresses the point for point critical observations of the order of the Pr. CIT by way of a Chart. Same is reproduced hereunder for ready reference : "7. The Pr. CIT has set aside the proceedings on the following facts:- S.NO. 1 Observation of Pr. CIT The Pr. CIT has stated in Para 13 th....
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....r 2011-12 and, same type of contracts were there of the "Uttrakhand" and of "Dehra" Division of H.P. as stated above, it is not a case of non-application of mind for allowing deduction u/s 80 IA by the Assessing Officer. The finding of the Pr. CIT in Para 19 and reliance on certain case laws in Para 17 and Para 17 of the Hon'ble ITAT, clearly | are applicable to the assessee, since j how can the Assessing Officer mention in the order in para 3.1 of the order with regard to the nature and type of contract going by the Show Cause Notice of Pr. CIT and this could have been mentioned only when, the AO had analyzed all the contracts and, therefore, the finding of the Pr. CIT in Para 20, while accepting the order of ITAT, is clearly out of context that nature and type of new contracts are not as per record. As regards the finding of the Pr. CIT about proportionate profit and bifurcation of expenses, it is submitted that the Assessing Officer had considered this issue, while passing the assessment order at Pages 62 to 67 of the "Paper Book" and disallowed the depreciation to the tune of Rs. 65,72,744/- and further, about the finding of the Pr. CIT that bifurcation is witho....
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....finding about the other three contracts that the same were required to be looked into, without mentioning in any show cause notice that such details were not available and, thus, the finding of the Pr. CIT on this issue is clearly out of context since nothing having been mentioned in the show notice. Reliance is being placed on the following judgments for the proposition that when nothing has been mentioned in the show cause notice about an issue, the Pr. CIT cannot set-aside the assessment: 7. The reliance by the Pr. CIT on various judgments at page 18, 19 & 20 are only on the issue, that where the Assessing Officer had not applied his mind to the issue, then, it could be case of making "no enquiry" and then it could he held that the assessment is erroneous and prejudicial to the interest of revenue. But whereas, the facts as given by the assessee, clearly demonstrates that the Assessing Officer has fully applied his mind and considered each and every aspect and, thus, the order of Pr. CIT deserves to be quashed. Reliance is being placed on the following Judgments: 1 Narain Singia V/s Pr. Commissioner of income Tax ITA N0.427/CHD/2015, ITAT, Chandigarh Bench, Chandi....
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....at the assessee has been maintaining separate heads project-wise for exempted and non exempt income and expenses on the basis of cost centers maintained in the accounting software since its inception and the assessee has been producing all the books of accounts to the assessing officer for verification on different dates for such verification. iii) As per normal practice bifurcated trading and profit and loss account for the exempted and non exempted projects are prepared and produced before the assessing officer at the time of assessment proceedings and these was duly verified by the assessing officer. iv) The non exempt projects are in continuation from the contracts awarded in assessment year 2011-12 i.e. last year and the issue regarding comparatively higher expenses in case of non-exempted units as compared to the exempted projects has been decided in favour of the assessee by the Hon'ble ITAT Bench while passing orders against reopening of assessment u/s 263 for the Asstt. Year 2011-12. The concerned issue has been dealt at page 158-159 of the paper book and at pages 32-33 of the order of the Hon'ble ITAT against reopening of assessment u....
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....hand Peyjal Nigam, Pauri( UK) Name of Work:- Pauri Nanghat Water Supply 'Scheme in Pauri Uttrakhand. 4. Executive Engineer, Construction Division, Uttarakhand Peyjal Nigam, Rudarpryag ( UK) -Name of Work: -Construction, maintenance & handing over to maintenance body of TALLANAGPUR GROUP OF VILLAGES PUMPING V/ATER SUPPLY SCHEME Rudarparyag. 2.16 Reliance was placed on the following paras of Paper Book page 45 and 46 of the Book. The specific provision of the Act was addressed for the benefit of the AO highlighted several relevant facts, a portion of the relevant para is reproduced hereunder : "The assessee was awarded contract for development and maintenance of the infrastructure scheme for lift water supply on BOT basis by the Himachal Pradesh Irrigation and Public Health Department and Uttrakhand Peyjal Nigam departments of State Government. The contract involves successful development of the -composite project for developing infrastructure for water supply and its successful commissioning and successfully operating the project for a period of five years with all sorts of entrepreneurial risks as the failure of any-component will affec....
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....highlighted that complete records were already available on record of the AO and the contracts had been seen by the Pr. CIT who considering these, had come to an incorrect conclusion that it was only a case of sale of goods for the purpose of construction/erection and thus was a case of Works Contract for which purposes profits were held to be ineligible for deduction u/s 80IA. The conclusion on facts was incorrect in view thereof was passed on a different reasoning. 2.20 Referring to page 64 which is infact the copy of the assessment order which has been set aside by the Pr. CIT, it has been argued that in para 6.2 of the same would show that the AO carried out a detailed re-calculation for the purpose of depreciation taking due note of the fact that there were exempt projects and also non-exempted projects. This fact is also again noted at page 12 of his order. Thus, after carrying out a detailed exercise working of the assets put to use at the different projects was carried out by the AO only after looking through the details made available as per contracts and thus it was submitted it cannot be the case of the Department that the claim of the assessee....
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....the assessee was not eligible for deduction under section 80IA on the proportionate profits earned on job work executed by sub-contract. The learned Pr. CIT also noticed that in respect of two projects relating to water supply and Hamirpur bye pass, the expenses incurred on freight and carriage, fuel and wages and salary were not in proportion to the receipts from the same and the same had not been examined by the Assessing Officer w.r.t the provisions of section 80IA(8)/80IA (10) of the Act. The learned Pr. CIT found that the Assessing Officer had not examined the above issue during the assessment proceedings. Accordingly, proceedings under section 263 of the Act were initiated and show cause notice issued to the assessee which mentioned the discrepancies noted in the assessment order passed as follows: i) The assessee company was awarded contract by Himachal Pradesh Government, Irrigation and Public Health Department Division Thural, Distt. Kangra. It is seen that the assessee company has claimed deduction u/s 80IA of I.T Act, 1961 on the profits of the said contract. The project is apparently covered under the definition of "Work Contract". Accor....
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....IA of the Act. The assessee further argued that the proceedings had been initiated on receipt of audit objection. The gist of the submissions made by the assessee before the learned Pr. CIT are reproduced in para 3.1 of his order, after considering which learned Pr. CIT held that all the above three issues highlighted by him had not been examined by the Assessing Officer during assessment proceedings and therefore the order had been passed without making enquiries or verification which were necessary for the grant of deduction under section 80IA(4) of the Act. He therefore held that the order passed by the Assessing Officer was erroneous insofar as prejudicial to the interest of the revenue and accordingly set aside the same with a direction to the Assessing Officer pass an order afresh in accordance with law. The relevant findings of the learned Pr. CIT at para 3.1 to 4 of his order are as under: "3.1 In reply to the issue at Sr. No. 1 of the show cause, the assessee has filed a detailed reply wherein it has been stated that: i) The composite project entrusted/awarded to the assessee was on built, operate and transfer basis. ii) For the....
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.... which is in the nature of works contract awarded by any person (including the central or state Government). Thus to be eligible for deduction u/s 80IA(4), the business should not be of the nature of works contract. It is seen from the records of the assessment proceedings that this aspect has never been examined during the course of assessment and no verifications were made by the AO. 3.1.2 As per the provision of section 263 of the I.T. Act, the Pr. Commissioner may call for and examine the record of any proceedings under this Act and if considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of Revenue, he may, after giving the assessee an opportunity of being heard and after making or cause to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. In this context, it is worthwhile to mention that section 263 does not prescribe any procedural condition for invoking the said provision. The records may be examined for different reasons including any objection raised by the Audit for invoking the provisi....
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....ing or developing, operating and maintaining any infrastructural facility. The deductions are thus clearly not applicable for the contract which is not carried out by the assessee. This aspect has not been subjected to verification during the assessment proceedings. No such details were called for by the AO or submitted by the assessee. Accordingly, even on this issue the order passed by the AO is erroneous so far as it is prejudicial to the interest of Revenue. 3.3 Regarding the issue mentioned at Sr. No. 3 of the show cause the assessee has claimed that the same was duly examined by the Assessing Officer. It has further been claimed that the provisions of section 801A(8) are not applicable. There is nothing on record either in the questionnaire or in the noting sheet entries to suggest that verification was made by the AO during the assessment proceedings with relation of applicability of provision of section 801A(8)/80IA(10) of the Act. Hence, the order passed by the AO is erroneous so far as it is prejudicial to the interest of Revenue on this issue also. 3.4 Further, reference is also made here to the newly inserted explanation 2 of Secti....
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....sessment year by another AO and considering the replies of the assessee as set out in para 9 to 11 and the arguments advanced on behalf of the Revenue as per para 12, the ITAT considered and held vide paras 13 to 25 that 263 was not maintainable. The case of the Revenue that the AO had not examined the claim u/s 80IA(4) vis-à-vis Explanation-3 it was submitted, was found to be not maintainable in view of specific queries and considering the Agreement, entered into it had been accepted that it was not merely a Works Contract as held by Pr. CIT but a contract awarded on a turn key basis which includes post operation consideration and maintenance of the same for a specified period. It was submitted by the ld. AR that the ITAT had also not accepted the arguments of the Revenue that it was a case of inadequate inquiry. The contract was held to be on a "Build Operate Transfer Basis" i.e. 'BOT'. The ITAT, it was submitted, had taken note of the fact that not a single document, clause or otherwise had been cited by the Pr. CIT to lend credence to a contrary view. 2.24 The second issue, it was submitted, has also been examined by the ITAT vide paras 26 to 2....
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..../s 263 as the AO without even caring to call for the Contracts/Agreements carelessly accepted the claim that agreements/contracts are identical. Since the order has been set aside, it was submitted by the ld. DR, there is no prejudice caused to the assessee as the assessee is free to raise all the arguments it deems fit. It was his submission that the exercise of power by the Pr. CIT is very much within the powers of the said authority. The AO in the facts of the present without even caring to call for the new agreements/contracts entered into by the assessee goes on to accept that the remaining contracts are also identical. It was his prayer that let the documents for the remaining three projects be considered by the AO as by relying upon stereo type queries, it cannot be said that the issue qua 80IA deduction for the remaining three projects has also been fully considered by the AO. The order, passed by the AO, it was submitted, clearly shows non-application of mind by the AO. Arguments of the assessee that all replies have been given, it was submitted, is merely a case of application of mind by the assessee and not a case of application of mind by the AO.....
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.... infact are identical Infrastructure Development contracts as have been considered by the AO in the immediately preceding assessment year. The identical composite Infrastructure Contract on a BOT basis has been considered by the Pr. CIT in the case of the assessee itself in the immediately preceding assessment year i.e. 2011-12 assessment year wherein the ITAT vide its order dated 06.02.2017 in ITA 361/CHD/2016 considering the specific contract which had been entered into by the assessee in the said year pertaining to the Thural Project found that the contract was an infrastructure contract on Build Operate Transfer mode and it was a turnkey project on which the assessee was also required to provide maintenance etc. for a specific period as is the condition in the three new Contracts which are subject matter for consideration in the present proceedings. These speaking observations of the ITAT and detailed order passed by the ITAT has been relied upon. Attention has also been invited to near similar arguments advanced on behalf of the assessee in response to identical allegations made by the Pr. CIT in that year also wherein the allegations of inadequate enqu....
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....ntrary to his own two Show Cause notices issued by him. 4.8 It has also been canvassed that nothing has been brought on record to show that the present agreements in respect of the other three new Composite Infrastructure Development Contracts with the Himachal Pradesh Government for Water Lifting etc. in Dehra; with Uttrakhand Government the Peyjal Schemes of Pauri and Rudraprayag were different from the Thural Project as opposed to the consistent claim of the assessee that they were also composite Infrastructure BOT Contracts identically worded. The said conclusion of the AO, it has been urged, has been arrived at on consideration of the Contracts and after due enquiries by the Assessing Officer. On behalf of the assessee the specific queries raised by the AO and replies thereto made by the assessee before the AO, the discussion in the assessment order by the Assessing Officer qua the exempt and non-exempt projects for the purposes of working out the depreciation to be allowed, it has been submitted evidently demonstrates that all the new agreements were also looked into minutely by the AO and the claim of depreciation as put forth by the assessee is considered and varie....
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....tion of Work Contracts. Accordingly, the profits earned therefrom are not eligible for claiming deduction u/s 80IA of the said section. 4. In view of the above, order framed in your case on 24.02.2015 is erroneous and prejudicial to the interest of Revenue. You are therefore requested to show cause as to why the aforesaid order of assessment may not be revised under the provisions of Section 263 of Income Tax Act, 1961. 5. Your case stands fixed for hearing on 30.09.2016 at 03:30 PM. In case of failure on your part to comply with this notice, it would be presumed that you have nothing to say in this regard and order u/s 263 would be passed on merits on the basis of the facts as are presently available on record. Yours faithfully, Sd/- (Sunita Puri) Pr. Commissioner of Income Tax-1, Chandigarh." 4.11 A perusal of paragraph 2 of the above shows that all facts admittedly were available before the Pr. CIT Chandigarh and the arguments of the Ld. CIT-DR that the Assessing Officer did not even care to call for the new contracts let alone examine them, is not borne out from the record. The show cause notice issued itself addresses the i....
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....he Agreement with the State of Himachal Pradesh in respect of Thural Project had held it to be a case of "Works Project" involving sale of goods to the Government for construction/erection of the Project and the ITAT in very categoric terms had held that it could not be said to be a case of Works Contract and on considering the order passed by the AO held it to be neither erroneous nor prejudicial to the interests of the Revenue. The relevant finding of the Co-ordinate Bench is reproduced hereunder : "19. We may add that it cannot also be a case of inadequate enquiry. All explanations and evidences were placed before the Assessing Officer to explain the nature of the contract and demonstrate that it was not merely a "Works Contract". We fail to understand what further inquiry was required to be made in the case to settle the issue of the nature of contract or for that matter how the present inquiry was not adequate to arrive at the correct conclusion. Moreover we find that even the learned Pr. CIT has not spelt out the same in his order. Even before us the Ld. DR has failed to show how the inquiry made was inadequate and what further invest....
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....n the nature of works contract and that the project was on turnkey basis in which the assessee was involved in operation and management also. The AO in that case also noted that such arrangements were typical for infrastructure development projects of the Government and cannot be seen as mere works contract. All these facts have not been rebutted by the Ld. DR before us. Therefore, without any doubt it can be said the view taken by the Assessing Officer with regard to the claim of the assessee under section 80IA of the Act was a plausible view. 21. Interestingly, we find ,that all the explanations and evidences which were filed before the AO by the assessee to support its claim of deduction u/s 80IA was also filed before the learned Pr. CIT and despite so there is not a whisper in the entire order as to how the view of the AO that it was an infrastructure project and not works contract, is incorrect. The learned Pr. CIT has not referred to a single document, clause or otherwise of the agreement to lend credence to his view. The entire thrust of the learned Pr. CIT in exercising revisionary powers is that adequate enquiry vis-à-vis claim of de....
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....would amount to an Assessing Officer reopening an assessment in respect of another assessment year without following the provisions of the Act." 23. Ld.DR, on the other, hand relying upon para 11 of the order stated that certain issues could have been disturbed in the succeeding years also. Ld.DR stated that merely because the assessee had been allowed claim in the 1 s t year did not mean that the same for all purposes could not be disturbed in the succeeding years at all. 24. We have gone through the order of the jurisdictional High Court relied upon by both the parties and find merit in the contention of the Ld. counsel for the assessee. There is no dispute about the fact that in the preceding assessment year i.e. AY 201011, which was the 1 s t year of claim of deduction under section 80IA, the assessee was allowed the same under section 143 (3) of the Act. This means that for all purposes the claim of the assessee having been examined in the light of the parameters of eligibility laid down under section 80IA, it could not be said that in the succeeding year those very same parameters had changed on the same set of facts. The Assessing Officer, after....
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....rriage, fuel, wages and repair 85 maintenances in the ratio 4.63:1, 1.17:1 7.38:1, 1.62:1. Similarly salary expenses and EPF expenses are in the ratio 1.61. The abnormally high expenses claimed for non exempt income viz-a-viz the exempt income have not been inquired and investigated. 2. In view of the above, order framed in your case on 24.02.2015 is erroneous and prejudicial to the interest of Revenue. You are, therefore, requested to show cause as to why the aforesaid order of assessment may not be revised under the provisions of Section 263 of Income Tax Act, 1961. 3. Your case stands fixed for hearing on 28,02.2017 at 03.00 PM. In case of failure on your part to comply with this notice, it would be presumed that you have nothing to say in this regard and order u/s 263 would be passed on merits on the basis of the facts as are presently available on record. Yours faithfully, Sd/- (Pritam Singh) Pr. Commissioner of Income Tax-1, Chandigarh." 4.15 A perusal of the issue addressed in para-(i) of the same reproduced above shows that the said allegation has also been addressed by the coordinate bench in the aforesaid order in the imme....
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....ard the rival contentions, we find merit in the contentions made by the Ld. counsel for the assessee. It is not disputed that the assessee had been awarded a contract for infrastructure development. The assessee has stated that a part of the work was subcontracted for ease in execution in the entire project. This fact has not been rebutted by the learned Pr. CIT. Therefore, it remains that the profit earned by the assessee as a whole was on account of the project of development of infrastructure and the assessee was entitled to claim deduction under section 80IA of the same. Even otherwise we find that the assessee's claim for deduction under section 80IA was duly examined by the Assessing Officer during assessment proceedings and allowed by him also. As stated above the assessee's claim had been allowed both in the preceding year and in the succeeding year also. On a query raised by the Bench whether the assessee had been subcontracting work in the preceding and succeeding years also, the Ld. counsel of the assessee stated at the bar that the assessee had been subcontracting work in all years also. From the aforesaid it is evident that the assessee's claim ....
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....der of the learned Pr. CIT in this regard. 32. Having heard the arguments of both the parties as also the issue raised by the learned Pr. CIT we find from a bare perusal of the same that it is not evident as to what is the error that has occurred in the order. In fact the learned Pr. CIT is merely presuming that an error may have occurred in the order. While the learned Pr. CIT has pointed out that the receipts from the two projects is in the ratio of 2.8:1, it is not specified the ratio in which the expenses have been bifurcated between the two projects to highlight the error which has occurred in the order. Further it is also not clear from the order of the learned Pr. CIT as to how the provisions of section 80IA(8)/80IA(10) of the Income Tax Act, 1961 are attracted in the impugned issue. The provisions of section 80IA(8)/80IA(10) are attracted only between transactions that take place between an eligible and non-eligible entity. learned Pr. CIT has not pointed out as to which among the two projects are eligible and which is not eligible. Having not pointed out the same we fail to understand how the learned Pr. CIT came to the conclusion that an error h....
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....xempt units and thus the suspicion of the Pr. CIT, Chandigarh that the facts for considering the bifurcation of expenses between the exempted income and non-exempt income have not been looked into is without any justification and in the peculiar facts of the present case based entirely on suspicions. 4.20 Accordingly in view of the detailed reasons given herein above, we find that there was no basis for the principal CIT-A to conclude that it is a case of inadequate enquiries. We find from the record that the assessing officer has inquired into the issues the assessee has demonstrated the correctness of the claim having been allowed the revenue having failed to point out as to what is the error in the specific contracts considered by the Pr. CIT, Chandigarh namely the contract entered into with the Himachal Pradesh government in regard to the Dehra Project and the two specific contracts entered into with the Uttrakhand Government of Pauri and Rudraprayag Project. Accordingly we have no hesitation in quashing the order passed by the Pr.CIT, Chandigarh on all these counts and allow the appeal of the assessee. 5. At this stage, it would not be out of context to quote from ....
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....e available with the Pr. CIT and the stated claim of the assessee if it was found to have been incorrect, should have been demonstrated in the order itself. Even in the course of the arguments, ld. CIT-DR could not bring any fact to our notice in support of the order passed. The power vested by the Statute comes with onerous responsibilities which cannot be allowed to be shirked. The assessee in the facts of the present case is able to demonstrate that full facts were available on record on which enquiries have been made and the assessment order itself shows that the calculations carried out even though for the purposes of depreciation by the AO qua the exempted units and non-exempt units demonstrate that facts have been seen. In the face of these facts and arguments, the Pr. CIT should have referred to some error in the order passed after considering the new three contracts and the earlier continuing contract of Thural Project which is not so in the facts of the present case. Nor has the ld. CIT-DR pointed out to any such error. Accordingly, the arguments of the Ld. CIT-DR that no prejudice is caused to the assessee if the matter is restored to the assessin....