TaxTMI 
TaxTMI 
2022 (10) TMI 1037
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....on claimed u/s.80IA(4) of the Act of Rs.4,08,99,861/- (6,77,15,250 - 2,68,15,389). (2) That on facts, and in law, it ought to have been held that the entire deduction claimed, is allowable as such without set-off of losses of Rs.2,68,15,389/- of lossmaking infrastructure facilities. (3) That on facts, and in law, the learned CIT(A) has grievously erred in not deciding the ground regarding exclusion of only net interest income for the purpose of allowance of deduction u/s 80IA(4) of the Act. (4) That on facts and in law, the learned CIT (A) has grievously erred in confirming the disallowance of interest of Rs.2,40,000/-u/s 36(1) (iii) of the Act. (5) That the learned CIT (A) has grievously erred in law and on facts in confirming the levy of interest u/s 234A, 234B and 234C of the Act." 3. The first ground relates to the disallowance of deduction claimed under Section 80IA(4) of the Act has already been decided by the Co-ordinate Bench in ITA No.118/Ahd/2009 & 20 Others in assessee's own case by and under order dated 13.05.2022 as has been submitted at the very threshold of the hearing by the Ld. Counsel appearing for the assessee; a copy of the said order has also been subm....
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....ds as explained and already narrated hereinabove and therefore, there is hardly any basis for assuming that it is merely a contractor executing a works contract. The difference between a "developer" and a "contractor" has to be properly analyzed and understood. This issue has come up before the Hon'ble ITAT, Amritsar Bench in the case of M/s. TRG Industries P. Ltd. in ITA Nos. 433 etc./Asr/2009. The Tribunal after relying various case laws has laid down the following parameters when to treat an assessee as a developer or contractor. (i) The assessee does not have to develop the entire infrastructure facility to qualify for deduction u/s.80-IA(4) and if only a part of the infrastructure facility is developed, the assessee would be eligible for deduction. (ii) The three requirements of section 80-IA(4) viz. development, operation and maintenance are not cumulative. Thus, an enterprise which only develops facility would also be entitled to the benefit of section 80-IA(4). (iii) Merely because the assessee is referred to as a contractor in the agreement, it would not debar it from claiming deduction. (iv) Direct agreement between the transferee-assessee and the specified au....
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....ruction passed by the Hon'ble jurisdictional High Court wherein the constitutional validity of insertion of explanation below sub Section 13 of Section 80 IA of the Act was challenged. The Ld. Representative appearing for the Revenue vehemently argued on this point that the jurisdictional High Court in the said matter already decided the issue against the assessee. Fact remains that the jurisdictional High Court in that particular matter dealt with the constitutional validity of the insertion of explanation as mentioned hereinabove and decided the same in favour of the revenue to this effect that such explanation brought with retrospective effect from 01.04.2000 by the Finance Act No. 2 of 2009 was very well within the competence of Parliament. As such there was no issue whether the assessee is acting as a developer or contractor was raised before the Hon'ble Jurisdictional High Court neither the said has been decided in the said judgement. 43. In the light of the above discussion and perusal of various clauses of Tender documents and case laws relied upon by both the parties, it reveals that the tender work under consideration are not for a specific work, rather they are for dev....
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.... other infrastructure facilities despite having legal provisions that deduction should be allowed on standalone basis. This common issue is raised for the Asst.Year 2007-08 to 2013-14 and 2015-16 & 2016-17. 51. In Assessment Year 2007-08 the Ld AO disallowed the entire claim of deduction under 80 IA of the Act to the tune of Rs. 67, 23, 899 due to the reason that the appellant has not considered and setting off loss from 8 projects while calculating deduction under chapter VIA of the Act. 52. We have heard the respective submissions made by the parties; we have also perused the relevant materials available on record. It appears that while rejecting the claim of the assessee the Ld. AO observed as follows: "3.1 On perusal of above chart, it is seen that the assessee has earned profit in 16 sites aggregating to Rs.3,47,48,215/- which has been claimed as deduction u/s.80IA. however, this claim has been made without considering and setting off loss from 8 sites aggregating Rs.67,23,899/-. As per the provisions of Section 80A(2) r.w. section 80B(5) as well as the ratio of decision laid down by Hon'ble Supreme Court in the case of Synco Industries Ltd. Vs. Assessing Officer (IT....
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....other industry owned by the assessee. Each industry must be considered on its own working, while adjudging its claim to the deduction under section 80E. 6. In this context, Allahabad High Court in the case of Commissioner of Income- Tax and another vs. Modi Xerox Ltd. (supra) found that the assessee was a multi unit company carrying on three different activities and had three separate units for such activities. Two of these units were profit making units and the third was a loss making unit. Qua the profit making unit, the assessee had claimed deduction under section 80HH and 80I of the Act. With this background, it was held and observed as under: "37. We have considered the facts and circumstances of the present case and the law laid down by the apex court and the decision of the Delhi High Court referred hereinabove. It is not the case of the assessing authority that the gross income of the company was nil. From a perusal of the income disclosed to all the three units it appears that the gross income was not nil and therefore, the assessee was eligible to claim the deduction under sections 80HH and 80-I of the Act. After becoming eligible to claim the deduction, the question ....
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....supra). In such case, it was found that the assessee had two industrial units namely, one in oil and another in chemicals. The assessee was making profits in chemical unit but incurring losses in oil unit. In this background, it was held that while computing gross total income, income should include both profit in chemical unit and loss in oil unit. If the result thereafter is nil, the assessee cannot get benefit of special deductions under section 80HH and 80I etc. In the context of computation of deduction under section 80I, the Supreme Court observed that while computing quantum of deduction under section 80I(6), the Assessing Officer, no doubt, has to treat the profits derived from an industrial unit as the only source of income in order to arrive at a deductions under chapter VI. It was further observed that section 80I(6)deals with actual computation of deduction whereas section 80I deals with treatment to be given to such deductions in order to arrive at total income of the assessee and therefore, while interpreting section 80I(1) as also the gross total income, one has to read expression "gross total income" as defined under section 80B(5). It was therefore,concluded that t....
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.... decided that in terms of provisions of sub Section 5 of Section 80 IA, deduction has to be given unit wise without considering profit or loss of other eligible units. In that view of the matter respectfully relying upon the same we allow this ground of appeal preferred by the assessee with the direction upon the AO to grant relief to the assessee only on the profitmaking unit without setting off loss suffered by other eligible units. Thus, this ground of appeal preferred by the assessee is allowed." 8. In the absence of any different fact, we do not find any reason to deviate from finding made by the Co-ordinate bench and therefore respectfully relying upon the same, we allow this ground of appeal preferred by the assessee. 9. The Ld. Counsel appearing for the assessee submitted before us that Ground No.3 has also been decided in favour of the assessee by the Co-ordinate Bench in ITA No.118/Ahd/2009 & 20. On the contrary, the Ld.DR relied upon the orders passed by the authorities below. 10. We have heard the parties and perused the materials available on record. Upon careful perusal of the Co-ordinate Bench order, it appears that the issue has already been examined thoroughly a....
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....efore the Tribunal. 46. Before us, the counsel for the assessee reiterated submissions as were made before the lower authorities. The counsel further submitted that the interest income is earned only on fixed deposits for obtaining bank guarantee and security deposit to be placed mandatorily as per the tender when work was awarded. Hence, such interest income is business income and eligible for deduction under section 80IA(4) of the Act. In support of his contentions, the counsel relied upon the following decisions: i) AVM Cine Products Vs. DCIT, (2021) 123 taxamnn.com 41 (Mad); ii) CIT Vs. Alloys Ltd. (2017) 84 taxmann.com 256 (Guj) iii) Empire Pumps P. Ltd. Vs. ACIT, (2015) 54 taxmann.com 317 (Guj) 47. For countering the above submissions of the assessee, the DR supported orders of the Revenue authorities, which was based on the decision of Hon'ble Supreme Court in the case of Pandian Chemicals Ltd. 48. We have considered submissions of both the parties; perused relevant orders and case laws cited by the parties. We have already hold the assessee a developer and eligible for deduction under section 80IA(4) of the Act. We further note that the amount of Rs 8,61,827 has....
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....is ground of appeal preferred by the assessee. 12. The Ld. Counsel appearing for the assessee submitted before us that Ground No.4 has also been decided in favour of the assessee by the Co-ordinate Bench in ITA No.118/Ahd/2009 & 20. On the contrary, the Ld.DR relied upon the orders passed by the authorities below. 13. We have heard the parties and perused the materials available on record. Upon careful perusal of the Co-ordinate Bench order, it appears that the issue has already been examined thoroughly and decided in favour of the assessee. The observation made by the Co-ordinate Bench in this regard is as follows: "57. Fourth common ground is with regard to disallowance of interest under section 36(1)(iii) of the Act. This was raised in assessee's appeals in the following assessment years: Asstt. Year Amount of disallowance of interest under section 36(1)(iii) of the Act. 2007-08 Rs.1,82,250/- 2010-11 Rs.3,60,000/- 2011-12 Rs.11,82,868/- 2012-13 Rs.3,60,000/- 2013-14 Rs.8,52,822/- 58. For adjudication this issue, we take facts stated in ITA No.442/Ahd/2011 for the Asst.Year 2007-08 where confirmation of disallowance of interest of Rs.1,82,250/- is under ch....