TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 1414
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....ed on incorrect facts and findings and without considering and appreciating the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds. 1(b) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in treating the global income of Rs.812,37,75,113/- taxable in India is beyond jurisdiction, illegal, bad in law and against the facts and circumstances of the case. 2.(a) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making disallowance of Rs.8,49,00,000/- on account of Corporate Social responsibility expenses and that too without observing the principles of natural justice. 2(b) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making disallowance of Rs.8,49,00,000/- on account of Corporate Social responsibility expenses is bad in law and against the facts and circumstances of the case. 3.(a) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in sustaining the action of Ld. AO in ....
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....opment of Bridges NHAI 1,25,903 5 RCF, Raibareli Project Rail Coach Factory RCF, Rai Bareli Administration 45,37,54,901 6 ROB Jaipur (New) Road over Bridge Govt. of Rajasthan 8,17,36,901 7 ROB Patna PhaseII(New) Road over bridge Govt. of Bihar 11,61,91,269 8 PMGSY Jharkhand Construction of roads and bridges Govt. of Jharkhand and India 43,62,828 9 RE Sri Nagar Rail electrification Northern Railway 8,39,522 Total 125,84,03,631 6. After going through the provisions of different agreements as mentioned above, the AO held that they clearly indicate that the assessee company was awarded contract by different agencies for executing certain work and the assessee company is required to execute these works in specified period and to the satisfaction of the work awarding agencies. Further, in most of the cases, the remuneration/ assessee company's fee is a specified percentage of total cost of the work. The payment is to be released by the work awarding agencies on the basis of progress of the project/ cost incurred by IRCON. All these characteristics of contract agreements clearly indicate that these are "wo....
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....facility ready for operations. Ld. Assessing Officer has not pointed out any specific clauses of any agreement, which shows that all attributes of development were not present. Making a bald assertion that assessee was a contractor does not serve any purpose. Merely using the terms contractor in the agreement would not make any difference as what has to be seen is the substance. Anybody who enters into a contract is closely called a contractor but that does not mean that such person entering into the contract cannot be developer. The other agreement with MSRDC shown to us as one as instance clearly shows mat appellant was engaged in investigation, planning, organizing and construction of road over bridge within the stipulated time. If the activities undertaken by the appellant cannot be termed as development, we are afraid then what can be called development? Therefore, we do not have any hesitation in holding in view of the arguments advanced from the sides of both parties and decisions relied upon that appellant was developing infrastructure facility and claimed deduction u/s 80IA in respect of income derived from the development of infrastructure facilities. Explanation inserted....
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.... is an allowable expenditure. 10. It was submitted that the provision for maintenance expenditure is provided to cover the company's expenditure to liability towards defect rectification and/or maintenance incurred by the company after completion of the contract. Such provision is made taking into account contractual provisions, operating turnover for the year, type of project, period of maintenance, contractual obligations of the subcontractors and other relevant factors, if any. As per the agreement with the client, the company is liable to maintain the works executed by it even after the projects are completed and handed over to the clients, for a period of 12 or 24 months from the date of completion. During this period, all the defects are to be rectified free of cost even though the Company has already handed over completed project to the client. The total project cost i.e. contract receipts, have already been received from the client in respect of the said projects before handing over the same to the client and no separate consideration is receivable. During the year an amount of Rs.2,27,42,328/- has been provided for non-DTAA project and Rs.7,18,000/- for DTAA projects.....
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....TA No. 1400/Del/2018 (Assessee Appeal) Ground No. 4 in ITA No. 2062/Del/2018 (Revenue Appeal) 15. The issue has been extensively discussed at para no. 10 to 14 in the order of the ITAT ITA No.2401/Del/2013 A.Y. 2006-07 vide order dated 23.01.2022. 16. This issue has been adjudicated by the Tribunal in ITA No.2596/Del/2004 for the A.Y. 2000-01 and also in ITA No.1825/Del/2005 dated 31.10.2019 and allowed in favour of the assessee. The relevant part of the order of the Tribunal is as under: "22.2 The Assessing Officer held that adjustment can be made only as provided in Explanation to section 115J as decided by the Hon'ble Supreme Court in the case of Apollo tyres Vs CIT (2002) 255 ITR 273 (SC). According to him, exclusion of DTAA is not provided in that explanation. The Ld. CIT(A) confirmed the action of the Assessing Officer. 22.3 Before us the Ld. Counsel of the assessee submitted that issue in dispute is covered in the favour of the assessee by the decision of the Tribunal in the case of the assessee for assessment year 200001, wherein it is held that when such income is not to be taxed as per DTAA, it cannot be brought to tax indirectly under the deeming fiction under s....
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....non-allowable business expenditure. The ld. CIT(A) held that the deduction u/s 37 of the Income Tax Act, 1961, the primary condition is that the expenditure should be incurred wholly and exclusively for the purpose of business and profession. It is clear that these expenses do not have direct nexus with the assessee's business and therefore it cannot be said that the same has been incurred for the purpose of the assessee's business. The ld. CIT(A) held that the objective of CSR expenditure is to share the burden of Government in providing social services and therefore if such expenses are allowed as deduction from income, it would amount to subsidizing part of expenditure by the Government. 22. The issue of deduction of CSR expenses read with Explanation 2 to Section 37(1) w.e.f. 1st April 2015 has been examined by the Co-ordinate bench of this Tribunal in the case of ACIT vs. Jindal Power Ltd. (2016) 70 taxmann.com 389 (Raipur Tribunal) wherein it was held as under:- "18. We have also take note of the fact that in view of insertion of Explanation 2 to Section 37(1), with effect from 1st April 2015, which provides that "for the removal of doubts, it is hereby declared that for .....
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.... and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit: law looks forward not backward. As was observed in Phillips v. Eyre [, a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing 'taw." It may appear to be some kind of a dichotomy in the tax legislation but the well settled legal position is that when a legislation confers a benefit on the taxpayer by relaxing the rigour of pre-amendment law, and when such a benefit appears to have been the objective pursued by the legislature, it would be a purposive interpretation giving it a retrospective effect but when a tax legislation imposes a liability or a burden, the effect of such a legislative provision can only be prospective. We have also noted that the amendment in the scheme of Section 37(1) is not specifically stated to be retrospective and the said Explanation is inserted only with effect from 1st April 2015. In t....