TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 1984
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.... of the case, the CIT(A) was not justified in holding that the assessee is eligible for deduction u/s 80IA(4) of the Act. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in holding that the assessee is a Developer and not a contractor, when a contract was awarded to the assessee by the Govt. of Maharashtra to undertake the projects for which assessee has claimed deduction u/s 80IA(4) of the I.T. Act. 3. On the facts and in the circumstances of the case, the CIT(A) has erred in relying on the decision in the case of CIT vs. ABG Heavy Industries Ltd. (2010) (322 ITR 323) (Bom.) when facts of the case are different. 4. On the facts and in the circumstances of the case, the CIT(A) has erred in facts in ignoring the instruction No.3 of 2008 giving clarification in respect of the provisions of the Finance Act, 2007 wherein clarification in respect of "Developer and Contractor" is also given. It is specifically stated that Contractor is not eligible for deduction u/s 80IA(4) of the Act. 5. The order of CIT(A) may be vacated and that of the Assessing Officer be restored. 4. The Revenue has raised additional ground of appeal No.I, which reads as under:- 1....
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....83,761/-, on which it claimed deduction under section 80IA of the Act. The assessee also furnished audit report under section 44AB of the Act and also Form No.10CCB, dated 25.10.2012. The assessee was engaged in development / construction of infrastructure projects such as earthen dams, hydro electricity projects, etc. During the course of search, statement of Shri Dilip Ramchandra Mohite was recorded under section 132(4) of the Act. On going through seized documents and evidences collected during the course of search and post-search enquiries, the Director of assessee company admitted unaccounted income in the case of assessee amounting to Rs. 34.50 crores for different assessment years respectively, which is summarized under para 7 at page 3 of assessment order. The assessee thus, declared Rs. 2 crores on account of unaccounted payment of wages in the return of income filed under section 153A of the Act as additional income due to result of search. The assessee had declared the said additional income on account of bogus self made vouchers for wages, fictitious payments to sub-contractor and by inflating expenses. The basis for disclosure of additional income was as per the source....
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....ract, whereas for developer the income arises from the asset after being brought into existence. The Assessing Officer was of the view that the assessee was only a works contractor and in view of Explanation which was inserted by the Finance Act, 2007 with retrospective effect from 01.04.2000, below sub-section 13 of section 80IA of the Act and subsequently, substituted by Finance (No.2) Act, 2009 with retrospective effect from 01.04.2000 clarified that the deduction under section 80IA(4) of the Act would not be available to works contractor. Reference was made to CBDT's Circular No.3/2008, dated 12.03.2008. The Assessing Officer also perused the TDS certificate in which the nature of work was contract. Moreover, the assessee had to pay VAT as contractor under the Sales Tax Act, whereas such was not the position for developer. Accordingly, the claim of deduction under section 80IA(4) of the Act of assessee amounting to Rs. 3.83 crores was dismissed. The Assessing Officer also referred to various judicial precedents on the issue and denied the deduction claimed by assessee and assessed the income in the hands of assessee i.e. on account of original income offered to tax and addition....
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....ed and need of beneficiaries, preparation of intricate designs involving hydraulic, civil, automation aspects, scrutinising the designs and obtaining approval from the concerned Government department, taking over lands either from the Government, local authority or to acquire lands from the landowners as per terms of the agreement, obtaining the statutory permissions, then undertaking the development of the project , construction and execution including procurement of material, construction, installation of mechanical, electrical and instrumentation components, co-ordination between all activities, so that the project is on smooth track, erection and commissioning of the entire project, undertaking of all the risks involved in the project, inverting its own funds and also borrowed funds for the development of the project and thereafter recording the same from the client in form of R.A. bills. 31. After completion of project the assessee undertakes maintenance of the project till defect liability period as prescribed in the tender, which is normally one year and finally after completion of the project in all respect, the project is handed over to Government/ local authority/statut....
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....e nearest section matching the nature of work in which assessee is engaged is sec 194C relating to contractors. Since there is not separate provision in respect of Developers, the TDS is made under this section. The use of word contractor will, in view of the observation made by various ITATs and the Bombay High Court, in no way alter the nature of work of the assessee." 9. The Revenue is in appeal against the order of CIT(A). 10. The learned Departmental Representative for the Revenue pointed out that the assessee had filed return of income in response to notice under section 153A of the Act and the issue which arises is whether in such return of income, the assessee can claim additional benefits? For the above said, reliance was placed on the following decisions:- i) Charchit Agarwal Vs. ACIT (2009) 34 SOT 348 (Del) ii) CIT Vs. Sun Engineering Works (P.) Ltd. (1992) 198 ITR 297 (SC) iii) Sarla Handicrafts (P.) Ltd. Vs. Addl.CIT (2008) 296 ITR 94 (P&H) iv) Suncity Alloys (P.) Ltd. Vs. ACIT (2009) 124 TTJ 674 (JD) v) Dhanush General Stores Vs. CIT (2011) 339 ITR 651 (Chhattisgarh) vi) Shri Gajendra D. Pawar Vs. DCIT in ITA Nos.1009 to 1012/PUN/2015, relating to asses....
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....ble Bombay High Court (supra) where the return of income has been filed under section 139(1) of the Act or in response to notice under section 153A of the Act, fresh claim could be made with regard to completed assessments i.e. assessment years 2006-07 to 2009-10. The issue was whether the assessee would make a fresh claim of deduction. In this regard, he placed reliance on the ratio laid down by Hon'ble Bombay High Court in CIT Vs. (1) Continental Warehousing Corporation (Nhava Sheva) Ltd. (2) All Cargo Global Logistics Ltd., (2015) 374 ITR 645 (Bom). The learned Authorized Representative for the assessee stressed that in principle the assessee was entitled to claim the deduction. He also admitted that in original return of income, no such claim was made. However, if it was 148 proceedings, then the assessee could offer additional income and also to make fresh claim in this regard. He placed reliance on the ratio laid down by Hon'ble Bombay High Court in CIT Vs. Caixa Economica De Goa (1994) 210 ITR 719 (Bom). He further placed reliance on the decision of Pune Bench of Tribunal in DCIT Vs. Tapi Prestressed Products Ltd. in ITA No.2139/PN/2013, relating to assessment year 2009-10, ....
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.... 1,83,83,760.00 2,00,00,000.00 3,83,83,761.00 2 2006-07 2007-08 31/10/2007 59,92,806.00 2,00,00,000.00 2,59,92,806.00 3 2007-08 2008-09 01/10/2008 41,46,520.75 1,25,00,000.00 1,66,46,520.75 4 2008-09 2009-10 26/09/2009 7,15,65,861.64 1,25,00,000.00 8,40,65,861.64 5 2009-10 2010-11 30/09/2010 10,01,50,501.00 1,25,00,000.00 11,26,50,501.00 6 2010-11 2011-12 29/09/2011 2,97,17,651.00 1,50,00,000.00 4,47,17,651.00 7 2011-12 2012-13 28/09/2012 Loss - - 14. Though the Assessing Officer denied the deduction under section 80IA(4) of the Act on several counts including the amendment to provisions of the Act but the CIT(A) held the assessee to be eligible to claim the aforesaid deduction not only on the original income offered to tax, on which originally no deduction was claimed and also on additional income offered pursuant to search on the assessee. The Revenue is in appeal against the order of CIT(A), wherein the first issue raised vide original ground of appeal is that where the assessee had furnished Form No.10CEB during the proceedings under section 153A of the Act i.e. beyond the date of filing the return of income u....
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....turn of income filed on the respective dates. Thereafter, for the first The second aspect of the issue time, the said claim was made in assessment years 2010-11, 2011-12 and 2012-13. The Assessing Officer denied the assessee aforesaid deduction under section 80IA(4) of the Act on the ground that the work was awarded by the Government of Maharashtra, so the assessee was a contractor and not entitled to the said claim. In this regard, the learned Authorized Representative for the assessee has placed reliance on the ratio laid down by Hon'ble Bombay High Court in CIT Vs. ABG Heavy Industries Ltd. (supra). The assessee claims that it was engaged in executing Infra projects, hence was entitled to claim the aforesaid deduction under section 80IA(4) of the Act. The CIT(A) has elaborately discussed the issue and allowed the claim of deduction under section 80IA(4) of the Act holding the assessee to be eligible to claim the aforesaid deduction. The Revenue has not been able to controvert the findings of CIT(A) in this regard. Further, we also find that the Tribunal in ACIT Vs. Mahalaxmi Infraprojects Ltd. in ITA Nos.142 to 145/PUN/2016, relating to assessment years 2007-08 to 2010-11 and in....
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.... 18. The case of Revenue is that the assessee is not entitled to the said claim of deduction under section 80IA(4) of the Act, which was claimed in the return of income filed pursuant to issue of notice under section 153A of the Act. The assessee in original return of income filed for assessment years 2006-07 to 2010-11 had not claimed the aforesaid deduction under section 80IA(4) of the Act. The return of income for assessment year 2011-12 was not filed till date of search. We take up each of the years separately as the facts of each year are different. The aspect which has to be kept in mind is whether the proceedings are abated or non abated assessment. The issue which is raised in the present appeal is whether the assessee can claim the deduction under section 80IA(4) of the Act in the return of income filed in response to notice issued under section 153A of the Act. The assessments for assessment years 2006-07 to 2009-10 had not abated. In all these years, incriminating material was found and on the basis of incriminating material, the assessee declared certain additional income on account of wages in the respective years and offered the same in the return of income filed in ....
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....eal, where the assessment has not abated, then no deduction is to be allowed in respect of fresh claim made in the return of income filed in response to notice under section 153A of the Act. Consequently, the first issue raised by way of ground of appeal No.1 in assessment year 2005-06, grounds of appeal No.1 and 3 in assessment year 2006-07, ground of appeal No.1 in assessment years 2007-08 and 2008-09 are dismissed." 20. Applying the ratio laid down by the Hon'ble Bombay High Court in CIT Vs. (1) Continental Warehousing Corporation (Nhava Sheva) Ltd. (2) All Cargo Global Logistics Ltd. (supra) and the ratio laid down in Shri Gajendra D. Pawar Vs. DCIT (supra), we hold that the assessee is not entitled to the claim of deduction under section 80IA(4) of the Act both on original income and on additional income offered, even if the assessee in principle is entitled to claim the aforesaid deduction. For the sake of repetition, it may be pointed out that the years under consideration i.e. assessment years 2006-07 to 2009-10 are non abated assessment years and in the original return of income, no such claim was made. Here, the learned Authorized Representative for the assessee has trie....