AI Drafter 
TaxTMI 
TaxTMI 
2020 (4) TMI 520
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....he Assessment Order passed u/s 143(3) dated 30-07-2015 is erroneous and prejudicial to the interest of revenue within the meaning of section 263 as the terms and conditions and nature of projects undertaken by the assessee during the year under consideration including five new projects have not been analized and the Assessing Officer has failed to conduct necessary verification/call for documents required to ascertain the nature of the projects. 2. That The Pr. Commissioner of Income Tax-I has erred in assuming that the Assessing Officer has failed to study the allowability of deduction u/s 80IA in respect of proportionate profits earned on job work done by the sub-contractors. 3. That the order of the learned Pr. Commissioner of income tax is not justified in directing the Assessing Officer to call for the basis/justification of bifurcation of the expenses claimed by the assessee under various heads between the eligible income unit. 4. That the order of the Pr Commissioner of Income Tax-I lacks from judicial consistency as the orders for reopening of the previous two assessments u/s 263 of the Ld. Pr CIT for the Asstt. Years 2011-12 and 2012-13 on the sa....
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....te Government and thus falls in definition of Work Contracts, accordingly, the profits earned there from are not eligible for claiming deduction u/s 80IA of the said section...." (b) Further vide letter dated 14.02.2017, the assessee was asked to file its submission on the following issues as well: (i) It is seen that in the Trading Account, a payment of Rs. 12,37,15,841/- has been made for "Job work done by sub-contractors". Proportionate profits earned on the job work executed by a sub-contractors is not eligible for deduction u/s 80IA. This issue has not been examined by the AO during the course of assessment proceedings and has resulted in loss of Revenue. (ii) It further seen that the ratios of receipts from exempted and non exempted units is 5.58:1 whereas the freight & carriage, wages and repair &, maintenances in the ratio 3.53:1, 5.08:1, 0.91:1. The abnormally high expenses claimed for nonexempt income viz-a-viz the exempt income have not been inquired and investigated..." 5. The Ld. PCIT considering the reply and explanation of the assessee to the above show cause notice framed the following three issues for adjudication:- i) Non-exa....
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....the order u/s 143(3) on various grounds. The facts w.r.t the claim for deduction u/s 80IA, were different in A.Y. 201213, in that the assessee had claimed this deduction with respect to income of four contracts i.e. (i) IPH Thural, (ii) IPH Dehra, (iii) Uttarakhand Peyjal Nigam, Construction Division, Rudraprayag and (iv) Uttarakhand Peyjal Nigam, Construction Division, Pouri, Uttarakhand. The Ld. Pr.CIT in order no. Pr.CIT-l/Chd/Judl/263/2016-17/6453 dated 30.03.2017 followed the order of the Hon'ble, ITAT of A.Y. 2011-12 with regard to the Thural (HP) Project but as regards the other three contracts, he held it to be a case of inadequate enquiry on the part of the AO who had allowed the deduction on these three projects without any enquiry, discussion or application of mind and, therefore, the order was revised u/s 263 as being erroneous so far as it is prejudicial to the Interest of Revenue. The Hon'ble ITAT thereafter, vide its order no. 867/CHD/2017 for A.Y. 2012-13 dated 01.12.2017 decided against Revenue, by observing that though the requisite agreements were available before the AO and before the Pr.CIT, no effort was made to distinguish the contract entered into wi....
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....ntered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility; (c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995:...." She, therefore, observed that it was clear from the above provision that deduction u/s 80IA was allowable to an enterprise which was carrying on the business of: (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility She further observed that ITAT had decided the issue in the assessment year 2011-12 by considering the nature of 'Thural Project' only. She further observed that for the assessment year 2012-13, the then Ld. PCIT in his order passed u/s 263 of the Act had accepted the findings given by the ITAT in relation to the appeal of the assessee for assessment year 2011-12 with respect of 'Thural Project' only but had not done so with reference to other three new projects in that order and in h....
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.... year of functioning and, hence, the same were at the development stage, therefore, the question which the Assessing Officer was required to examine is as to whether the said contract in relation to the 8th project were 'Infrastructure Development contract' or 'work contract. The Ld. PCIT, as mentioned above, held that the order of the ITAT passed on similar issue in relation to the appeal against the order of the PCIT passed u/s 263 of the Act were not applicable in the assessment year under consideration. She, thereafter proceeded to discuss as to whether the contracts awarded to the assessee were 'Development project' or 'works contract'. 8. During the course of proceedings before the learned PCIT the assessee filed detailed replies, stating that the issue of eligibility of the assessee to claim deduction of its profits under section 80IA had been duly examined by the Assessing Officer during assessment proceedings and after due verification had allowed the same to the assessee and, therefore, the present proceeding under section 263 only tantamounted to review due to change of opinion. Further, the assessee submitted that even on merits, the assessee was entitled to deductio....
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....under the definition of development contract eligible for deduction u/s 80IA(4) of the Act or the same would be 'works contracts' and, therefore, would be hit by the exclusion provisions of the above exclusion to sub section (13) of section 80IA of the Act is concerned, the Ld. PCIT has given his finding in para 7 onwards in the impugned order, relevant part of which, for the sake of convenience and ready reference, is reproduced as under:- "7. Evaluation of Records and Replies I have gone through the records and replies to questionnaires which are Annexed to this order for convenience of reference. After considering these, the main contentions of the assessee are discussed below: (i) One of the main contentions of the assessee was that the AO had examined in detail its claim and the deduction was allowed after verification. Therefore, it could not be now reviewed as it would be amount to a change of opinion. In this regard, it is stated that the assessment records as well as the assessment order do not bear out the contention of the assessee that all records were examined. There is only an order sheet entry calling for copy of all agreements. Th....
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.... under section 119; or d) The order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person...." The above provision is clearly attracted to the facts of this case as the A.O did not carry out the inquiry w.r.t the nature of the contract which he was bound to do so in terms of the exclusionary nature of Explanation to s.s 13 of 80IA. (ii) Further, the reliance of the assessee on the Pr.CITs order u/s 263 for A.Y. 2012-13 also does not help of the case of the assessee. In those proceedings the Ld. Pr.CIT had accepted the finding given by the Hon'ble ITAT in A.Y. 2011-12 w.r.t the Thural project but had not done so with reference to other three new projects as in his opinion the nature of those contracts needed to be verified. Thereafter, the Hon'ble ITAT decided the issue in favour of the assessee in its order dated 01.12.2018 by holding that the Pr.CIT could not have done so without bringing on record any differentiation between the project at Thural and the other three projects. However, the assesse....
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....he analysis made above shows that the facts of the Thural project are different in this year from the others, as it is only doing the activity of operating and maintaining a facility unlike the others. (iii) As regards, the reliance of the assessee on the order of the Hon Tale ITA T in the case of its sister concern M/s Kaveri Infrastructure Pvt. Ltd. Chandigarh for the A.Y. 2012-13 ITA No. 14/CHD/2017 dated 22.03.2017, the same is also misplaced. On going through this order in para 9, Pg. 36/37 it has been stated clearly as under: "...The assessee explained that entire income of the assessee is only from operation and maintenance of infrastructure facilities. It was also explained that during the year the assessee has not carried out any activity of development of infrastructure facility but has carried out only operation and maintenance of infrastructure project as defined u/s 80IA of the Act...." Thus, even in that case the sister concern, was eligible by virtue of performing the function of operation and maintenance of an infrastructure facility and there was no real requirement to go into the question of whether or not the assessee was a developer or....
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....ra cost subject to final approval of the department. Technical parameters specified in the data sheets are based on sample designs evolved by the department as such tenderer/firm shall submit structural and architectural design and drawings based on the site conditions keeping in view the functionality and good aesthetic appearance without any extra cost subject to final approval of the department...." From the above, it is clear that even the final structural as well as architectural drawings, (not just the sample and preliminary ones) are subject to final approvals and were based on drawings evolved by the Government agency. Further, even letters filed with reference to the newer contracts indicate this. Two samples of extracts confronted to assessee are reproduced below: "....(i)Letter dated 03.10.2012 of the Executive Engineer, IPH Division, Sarkaghat, pertaining to the project of Providing LWSS Baira Bhadrota Suranga and Hatli area in Tehsil Sarkaghat Distt. Mandi: "The Technical specification given in the original tender document subsequent common parameters minutes of negotiation held in the office of Engineer in Chief, IPH Depart....
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....urther, the claim of the assessee that the contract was a BOT i.e. Build, Operate and Transfer and therefore, was a development contract is also not borne out from the award letters. In a BOT, the total cost of building and operating the reject is to be borne by the assessee and it is intended for the project as a whole d not merely for construction activity. But in this case the capital investment at the assessee has made is like that of any other civil contractor. The purpose of 80IA was to encourage the private investment. However, it appears that the assesssee is merely a contractor who receives payment as and when the bills are raised, even before the complete construction is over. Even the guarantees given in the award letters are 'performance gurantees' not extending to the entire project but to the performance of work approved and assigned by the Government agency. Therefore, the risk of the assessee is limited to the work allotted and not to the entire contract. (viii) The Build, Operate and Transfer (BOT) which the assessee is referring to is different from the BOT which is eligible under the section. The CBDT, vide its circular no 10/2005, has clarified ....
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.... contract and he is not eligible for deduction under section 80L\(4) of the Act. Whether the assessee is a developer or works contractor is purely depends on the nature of the work undertaken by the assessee. Each of the work undertaken has to be analyzed and a conclusion has to be drawn about the nature of the work undertaken by the assessee. The agreement entered into with the Government or the Government body may be a mere works contract or for development of infrastructure. It is to be seen the agreements entered into by the assessee with the Government." 8.1 Similarly in the case of Koya & co. Construction Pvt. Ltd vs. ACIT reported in 21 taxman.com 35(Hyd.) in para 23, the ITAT has again held in this regard as under:- "The next question is to be answered is whether the assessee is a developer or mere works contractor. The Revenue relied on the amendments brought in by the Finance Act 2007 and 2009 to mention that the activity undertaken by the assessee is akin to works contract and he is not eligible for deduction under section 80IA(4) of the Act. Whether the assessee is a developer or works contractor is purely depends on the nature of the work undertaken b....
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....vity of only operation and maintenance of the said project and therefore, was eligible for deduction u/s 80IA (4) of the Act in respect of the said project for the said year. That, since the other projects were not completed in the year consideration and hence the assessee was not carrying on the activity of operation and maintenance of the said other projects, hence was not eligible for deduction u/s 80IA(4). 13. Before proceeding further it is pertinent to mention here that as per provisions of section 80IA(4), deduction has been allowed to an assessee who has entered into an agreement either with the Central or a State Government or a Local Body or any statutory body for - (i) Developing or (ii) Operating and maintaining or (iii) Developing, Operating and maintaining a new Infrastructure facility. The assessee, admittedly, had entered into nine agreements up to the year under consideration for developing / providing Lift Irrigation schemes/ Lift Water Supply Scheme with various State Authorities such as Irrigation and Public Health Deptt, of Himachal Pradesh Govt. and that of Govt. of Uttrakhand. The contracts were composite contracts requiring t....
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....ts, however, the PCIT has not pointed out or discussed as to how the nature of theese five new development projects undertaken during the year was different from the nature / facts of the 'Thural Project' as carried out by the assessee in the assessment year 2011-12 when it was in its development stage. She had not discussed as to why findings of this Tribunal for assessment year 2011-12, which was in relation to the nature of the 'Thural Project' when it was in development stage, would not be applicable to the new projects undertaken. However, she has taken an entirely inappropriate and illogical plea that this year 'Thural Project' is entered into the fourth year and, thus, the activity carried out by the assessee for the year under consideration in respect of the 'Thural Project' is only operation and maintenance, therefore, the facts of the 'Thural Project' for the year under consideration are different from other projects. It is pertinent to mention here that the nature of the 'Thural Project' and the activity carried out by the assessee for the assessment year under consideration, when the 'Thural Project' is reached in its fourth year was not under consideration or adjudicat....
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....No. 867/Chd/2017)for assessment year 2012-13, the relevant findings of the Tribunal given in order dated 6.2.2017 for assessment year 2011-12 (supra) in this respect, are reproduced as under:- "8. We have heard the rival contentions, perused the order of the learned Pr. CIT and the documents placed before us. 9. On perusal of the order of the learned Pr.CIT we find that the first reason for invoking revisionary powers under section 263 was that the Assessing Officer had not examined the claim of the assessee of deduction under section 80IA of the Act vis-a-vis the applicability of the Explanation to sub-section(13) of section 80IA of the Act. The learned Pr. CIT has held that as per the aforesaid explanation to the section work contracts are not eligible for deduction under section 80IA(4) and apparently the project undertaken by the assessee is covered under the definition of "works contract". Moreover the Assessing Officer has not examined this aspect during the course of assessment and no verifications were made by the Assessing Officer, therefore, as per the learned Pr. CIT, the assessee has been wrongly allowed deduction of its profits under section 80IA(4) o....
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....tence. As per Form No. 10CCB annexed with audit report at Para 8 the auditor has mentioned commencement of operation/activity as 13.04.2010. And at para 9 the initial assessment year from when deduction u/s 80 -1A is for the A.Y. 2011-12. On the other hand, under the detail of fixed assert as on 31.03.2011, you have shown WDV of the fixed asset as on 01.04.2010 at Rs. 1,81,58,128/-. Please furnish details of how WDV comes to exist on 01.04.2010 when your date of commencement of operation started on 13.04.2010 and show cause why depreciation claimed by you should not be disallowed as it seems that you are furnishing inaccurate particulars. Please also furnish whether you have claimed such exemption u/s 80-lA in the previous year also or not? 12. Further at para 12 of Form No.10CCB, you have shown sales tax registration No. in which it has ascertained that you were got registered with sales tax on 09.07.2009. Please state whether you have got sale tax No. before the company came into existence." c) The reply filed by the assessee in response to the query raised dated 13.08.13 placed at paper book page No. 36 to 40. The relevant reply of the assessee in the same poin....
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.... with all its assets and liabilities with the same sales tax registration number. The deduction u/s 8Q1A was first claimed in the A/Y 2010-11. The-year under reference is the second year for claiming deduction u/s 801A. e) The order passed by the Assessing Officer dealing with the issue of 80IA at paras 3 to 4.2 of the order as follows placed at paper book page Nos. 44 to 52 : "3. The case of the assessee selected under CASS with the reasons that "AO to examine the reasons & genuineness for high claim of refund out of TDS". When confronted, the assessee vide its reply dated 13.08.2013, has submitted that in the year 2011-12 a refund of Rs. 10,47,850/- was claimed as a part of the income of the company amounting to Rs. 12,11,810/- was exempt u/s 80IA and TDS was deducted on the total receipt of the company, the excess amount of TDS deducted was claimed as refund. 4. The assessee-Commissioner came into existence w.e.f. 13.04.2010 after conversion from partnership firm, namely M/s Unipro Techno Infrastructure to M/s Unipro Techno Infrastructure Private Ltd. with all its assets and liabilities with Sale Tax Registration number and also carried forwarded the s....
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....ct since it was adequately proved before him that the contract awarded to the assessee was a composite contract awarded on build, operate and transfer basis for the execution of which the machinery installed including its components, engineers and labour employed, designing, execution, financing in the form of capital investment, enterprise risk, performance guarantee etc was the responsibility of the assessee. The Ld. counsel for the assessee pointed out that the contract in any case could not be said to be a "works contract" for the purpose of Explanation to sub-section (13) to section 80IA(4) and the Assessing Officer on the basis of documents produced before it had rightly arrived at the conclusion that the assessee was eligible to claim deduction under section 80IA of the Act. In support of its contention that the view taken by the Ld. counsel for the assessee was a correct and plausible view Ld. counsel for the assessee drew our attention to the fact that on an application filed by the assessee to the CIT (TDS) for issuing a certificate for deduction of tax at lower rate on account of the deduction claimed by the assessee under section 80IA of the Act, the assessee was awarde....
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....ng applicable to projects/ structures built under BOT basis. Perusal of clarification received from i H.P. Govt. Deptt. and the language of the contract agreement shows that the activity of the assessee is not in the nature of works contract for the purposes of 80IA. It appears that the assessee has implemented an Infrastructure Project for the Govt. on a turnkey basis and has also been engaged in its operation and mgt. Such arrangement is typical to Infrastructure Development Project of the Govt. and cannot be seen as mere works contract. Case adjourned to 17.08.2015. Insp. to place copy of file notings on all files of connected relevant assessment years in the case." 11. The Ld. counsel of the assessee also drew our attention to the fact that in the preceding year i.e. assessment year 2010-11 as also in the succeeding year i.e A.Y 2012-13 & 2013-14, the assessee had been allowed its claim of deduction under section 80IA in the order passed under section 143 (3) of the Act. The Ld. counsel for the assessee, therefore, stated that the claim of the assessee for deduction under section 80IA having been duly examined in the course of regular assessment proceedings and the Ass....
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....nder section 80IA of the same amount was also filed giving all details of he undertaking claiming the said deduction. Further, during the assessment proceedings, the assessee was specifically asked to provide complete details of the contract undertaken for providing lift water site scheme from Executive Engineer, IPH, the income from which was claimed exempt under section 80IA of the Act. The assessee was also specifically asked to prove his eligibility for such claim when the activities were being undertaken under contract. Thus specific and pointed queries vis-a-vis eligibility of claim of deduction u/s 80IA were raised and the assessee was specifically asked to justify its claim in the light of undertaking the work under contract meaning thereby that it was a "works contract". 17. In reply to the same, the assessee furnished complete detail of the work undertaken stating that it had undertaken contract for providing lift water supply scheme from the Executive Engineer, Irrigation & Public Health Division, Thural, Distt. Kangra on account of providing rehabilitation and Source Level Agumentation of various schemes in different Tehsils of District Kangra. The assessee, we....
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....s inadequate and what further investigation was required in the matter or why on the basis of explanation and evidences filed by the assessee the correct nature of the contract could not be deduced. In such circumstances, we hold, it cannot be said that there was any error in the order of the Assessing Officer so as to cause prejudice to the Revenue. 20. Moreover, we find that after going through the replies filed by the assessee the Assessing Officer discussed the same in his assessment order and recorded his satisfaction regarding the assessee's claim for such deduction stating that the activity undertaken by the assessee clarifies for deduction under section 80IA of the Act. The Assessing Officer further added that this was the second year of claim of deduction since the assessee company had been awarded the same project by the same Government. Thus, we find that the Assessing Officer after having applied his mind to the explanations and evidences filed by the assessee arrived at a logical and reasonable conclusion that the assessee was eligible to claim deduction under section 80IA of the Act as its activity qualified for the said claim. We find that the view taken by ....
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....sessee and the Assessing Officer after having applied his mind to the explanations and evidences filed by the assessee had arrived at a plausible conclusion that the assessee was unable to deduction under section 80IA of the Act. We are, therefore, in complete agreement with the Ld. counsel of the assessee that the issue was examined and verified during assessment proceedings and the Assessing Officer had arrived at a plausible conclusion that on the basis of the verification carried out by it that the assessee was eligible to claim deduction under section 80IA of the Act and therefore there was no error in the order of the Assessing Officer so as to cause prejudice to the Revenue. The action of the learned Pr. CIT in exercising his revisionary powers on this ground is set aside. 22. Besides the above argument Ld. Counsel for the assessee also argued before us that the issue of eligibility of claim of deduction under section 80IA of the Act having been examined in the 1 s t year of claim of the assessee i.e. AY 2010-11, the same could not have been disturbed in the succeeding years. In support of its contention the Ld. Counsel relied upon the decision of the Punjab and Har....
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....he assessee was eligible to claim deduction under section 80IA of the Act. In the impugned case, which is the succeeding year, on the very same set of facts the findings of the preceding year on the fact that the assessee was carrying out eligible infrastructure project and not works contract, cannot now be disturbed, which is exactly what has been stated by the High Court in the order passed in the case of Micro Instrument Company (supra). Following the same also we hold that the learned Pr. CIT could not have exercised his revisionary powers since the claim of the assessee had been decided in the preceding year itself and without disturbing the same it could not have been dislodged in the impugned year. 25. In view of the above we set aside the order of the learned Pr. CIT on this count." 15. Further, the aforesaid issue was again and considered by the Tribunal for assessment year 2012-13 also. The Tribunal vide order dated 1.12.2017 has again decided the issue in favour of the assessee. The relevant findings of the Tribunal are reproduced as under:- "4.18 Accordingly we find that infact there is nothing on record except the suspicion of the Department that t....
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....owed 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 the decision of the Gauhati High Court in the case of Bongaigaon Refinery and Petrochemical 287 ITR 120 (Gau) where the Court at page 131 para 17 and 18 held as under: "17. Entertainment of a view different from the one adopted by the Assessing Officer, if plausible would not clothe the Commissioner with the power to interfere therewith under the said provision of the Act. Differently put, an error within the jurisdiction of the Assessing Officer on an evaluation of the materials available would not be exposed to interference in exercise of suomotu revisional powers under section 263 of the Act. The provision though permit....
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....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 assessing officer as the assessee would still be at liberty to reargue the entire case cannot be countenanced. Unless and until the Revenue demonstrates that the order has been passed without due and adequate enquiry or an error which is prejudicial to the interests of the Revenue is pointed out only then the order passed can be upheld. Merely because the assessee would have an opportunity available before the Assessing Officer once again cannot be said to be a justifiable reason for setting aside an assessment order. If the said argument is accepted, then each and every assessment order can be set aside as opportunity to the assessee is any way granted by the Rule of Law. ....
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....esigns approved by the Government, hence, it would fall within the definition of 'works contract' and not 'Infrastructure Development contract'. 17. We have gone through the discussion made by the Ld. PCIT on this issue and also considered the arguments of the Ld. DR on this point. The observation of the Ld. PCIT that only if the project is to be developed by the assessee as per the specifications and designs approved by the Government that would fall in a definition of simple works contract and not a 'Infrastructure Development Contract' as provided u/s 80IA(4) of the Act, in our view, would disentitle each and every assessee who would carry out infrastructure development project in a contracts with a Union Government or State Government or Local Authority. Such / stated projects are to be carried out as per the term of the Government. However, what distinguishes and work contract from Infrastructure Development Contract' as per section 11A of the Act is that whether the contract has been granted for a specific work or it is a development of a facility as a whole and whether day to day control on the project and its manner of development is of the Government authorities or of t....
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....pendently and those materials are to be conformed to the specifications provided. The assessee has also to make arrangement for storage of the materials. The Tribunal held that such work carried out by the assessee would fall in the exclusion provided to the meaning of the 'work' given in the explanation to section 194C of the Act and it would also be out of the scope of 'explanation to sub section (13) of section 80IA'. The Koltaka Bench of the Tribunal in the case of 'Adhunik Infrasture (P) Ltd vs JCIT' has also held that deduction u/s 80IA(4) cannot be denied to an assessee merely because the assessee has been paid by the Government for development work. 18. After considering the observations and objections made by the Ld. PCIT and in the light of the proposition laid down in the case laws, as discussed above, , we find that neither the Ld. PCIT could even point out how the fact and nature of the projects carried out during the year under consideration were different from the projects earlier taken by the assessee which have already been held to be eligible for deduction u/s 80IA(4) of the Act being Infrastructure Facility Development Project, nor the Ld. PCIT could point out....
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....essee further stated that the job work done by subcontractors was not a separate contract but sub contract of the main project awarded to it and the assessee as per the provisions of section 80IA was entitled to claim deduction of the entire profits earned by it on the project executed on infrastructure development. The fact that it had sub-contracted a part of the work did not affect its claim of deduction of the entire profits and the sub contract work could not be treated as separate for the purpose of claiming deduction under section 80IA of the Act. 28. Ld.DR, on the other hand, relied upon the order of the learned Pr. CIT and stated that the profits earned on the sub contract work were not eligible for deduction under section 80IA of the Act and the same having not been examined by the Assessing Officer an error had crept in the order of the Assessing Officer causing prejudice to the revenue by allowing the assessee claim of deduction of profits under section 80IA on the same. 29. Having heard 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 ....
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....hile the receipts from the water supply project and Hamirpur bypass project in the ratio of 2.8:1, the expenses incurred on freight and carriage, fuel and wages and salary are comparatively higher in case of Hamirpur bypass project and the comparative details have not been examined by the Assessing Officer vis-avis the provisions of section 80IA(8)/80IA(10) of the Income Tax Act, 1961 causing error in the order of the Assessing Officer and prejudice to that extent. 31. The Ld. counsel of the assessee reiterated his arguments made on account of point No.1 raised by the learned Pr. CIT while Ld. DR relied upon the order 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....