TaxTMI 
TaxTMI 
2021 (5) TMI 724
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....tantive grounds : " 1) Whether on the facts and circumstances of the case, and in law, the ld. CIT(A) erred in a holding that the provision of deduction u/ s 80IA(4) is applicable to constituent of the JVI Consortia without appreciating that the assessee has not entered into an agreement with the Central Government or a State Government or a Local Authority or any other Statutory Body. 2) Whether on the facts and circumstances of the case, and in law, the ld. CIT(A) erred in not appreciating that the assessee herein is not a developer but merely a contractor in respect of the project not directly awarded to it? 3) Whether on the facts and circumstances of the case, and in law, the ld. CIT(A) erred in not appreciating that the facts of the case are not in conformity with clarificatory amendment to section 80IA of IT Act (Explanation 2 to Section 80 LA vide Finance Act 2007) which was introduced to unambiguously explain that only those enterprises that have entered development agreement with Central or State or Local authorities and invest their own funds to develop such facilities will only be eligible for benefit of deduction. 4) The appellant cr....
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....intenance of the said infrastructure for a period of 12 to 24 months. j. The assessee is free to raise loans from outsiders or execution of project as there are no provisions in the Sec 8OIA restricting the same. 5.1.1 Based on the examination of the applicability of the said conditions, the number of such eligible projects for the year under reference were identified to be 9 projects, the net profits of which were worked out at Rs. 22,29,91,198/-, which was tallying with the amounts claimed as deduction u/s.80IA(4) by the assessee. However, it was noticed and observed by the AO, that out of the above, in a few of the projects, the works were awarded to Joint Ventures/consortia, wherein the assessee company is one of the constituent members, whereby the works are carried out by assessee-company, in proportion to its share in the JV/Consortium agreement. Based on the said facts, the AO observed that deduction u/s.80IA(4) is available only to the enterprise which enters into an agreement with Government/Statutory Body. In the cases of Joint Ventures, the agreements have been entered by Joint Ventures/Consortia, as such the JVs are eligible to claim deduction, wherea....
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....9 of the assessment order and disallowed the deduction of Rs. 1,60,09,903/- relating to 2 projects as shown in the second table in the same page, by observing that, this deduction of Rs. 1,60,09,903/pertains to profit relating to the share of the assessee's turnover of the work of the Joint Venture (JV), in which the assessee is a constituent member and as per provisions of Section 80-IA, only the enterprise which enters into an agreement with the Govt. or Statutory Body is eligible for deduction U/s. 80-IA and in the instant case the agreement was entered into by the Joint Venture whereas the deduction U/s. 80-IA was claimed by its constituent member which is in contravention of the provision of the Section 80-IA. 2.0 INVALID ADDITION The above addition of Rs. 1,60,09,903/- to the returned income on account of disallowance of claim U/s. 80-IA is invalid for the following reasons. 2.1 It is an admitted fact which is evident from the assessment order itself that, the assessee has furnished all the information required to substantiate the claim of the assessee for deduction U/ s. 80-IA(4) for an amount of Rs. 22,29,91,198/-. This information filed by th....
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....tion of appellant's submission with reference to books of account, scope of work as reflected in the contract documents vis-a-vis the conditions laid down in the Act and above factors, accepted the claim of eligibility of the appellant. However/ while accepting the eligibility as per the statutory norms/ the Assessing officer denied the claim in respect of some works, which had been executed by the appellant as a JV constituent but not directly. In other words, AO was of the view that only direct contract work undertaken by on entity from specified authorities is eligible for deduction subject to fulfillment of the conditions, but not the work executed as the constituent of JV/Consortium. This resulted in refusal of the claim to the tune of Rs.l,60,09,903/-. 5.2.2 As regards the assessability of JV/AOP, it was submitted that plethora of decisions were furnished before the AO to substantiate that IV is only a pass through entity and is nominal in existence. The assessee relied on the decision of Vizag Bench of ITAT on similar facts in the case of M/s. Transtroy India v ITO (ITA No.s. 40 of 2009) to the effect that a constituent is eligible for deduction under section 80....
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.... claimed by the assessee, and the issue on assessability of incomes of JV or its constituents, has already been settled by Judicial decisions. The further objection of the appellant to the decision of the AD for not allowing deduction u/s.80IA(4), on the ground of decision of ITAT not having been accepted by department, is that this is not on any legal basis. It is also contended by the appellant that AO did not distinguish or dispute the facts as upheld by ITAT Visakhapatnam, which has been further supported by the decision of ITAT, Lucknow, in the case of PNC Constructions Co Pvt Ltd Vs DClT (37 Taxmann.com 361), and further upheld by Allahabad High Court (55 Taxmann.com 21). It was also rightly contended by the assessee/appellant that AO preferred not to allow deduction merely because the order of ITAT, Vishakhapatnam Bench, was not accepted by the department, and a further appeal was preferred before High Court. As regard to the binding nature of decision of ITAT, the appellant filed comprehensive explanations before the AD. Appellant also filed its submission drawing attention of the AD that the decision of ITAT is binding on lower authorities as per judicial precedents laid d....
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....urt in the case of Bhopal Sugar Industries Ltd Vs ITO (AIR 1961 SC 182). (iii) Aggarwal Warehousing & Leasing Ltd Vs CIT (257 ITR 235 (MP): Where in the Hon'ble High Court has held that "needless to say, that the orders passed by the Tribunal are binding on all the revenue Authorities functioning under the jurisdiction of the Tribunal. All the above decisions unanimously hold the view that orders of ITAT are binding on the Revenue Authorities under its jurisdiction and in this case, the decision of the ITAT, Vishakapatnam, is held to be binding on the AO under reference, unless the said order is stayed or suspended by a Superior Court or a different view is taken by the another Tribunal in the said jurisdiction. In this case, it was not the case of the AO to show that the decision of I TAT, Vishakapatnam, in the case of Transtroy India Ltd (supra), as relied by the assessee, is not binding on him. Apart from relying on the order of ITAT, Visakhapatnam in case of Transtroy (India) Ltd, (supra), whose decision is very much binding on the AO, the assessee made citation of the decision of ITAT, Agra, in the case of PNC Constructions Co. Ltd Vs OC....