AI Drafter 
TaxTMI 
TaxTMI 
2024 (9) TMI 1562
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....stances of the case, the Ld. CIT(A) has erred in law as well as on facts in recording the finding that the assessee was entitled to claim the deduction U/s 80IA(4)(i) by filing the return in compliance of notice U/s 143(3) ignoring the judicial pronouncements of Hon'ble Supreme Court, various High Courts and ITATs in following cases: i. Commissioner of Income-tax Versus Sun Engineering Works P. Ltd. [1992] 198R 297 (SC). ii. Vishwanath Products, Prop. Shri vs The Dy. CIT on 29 June, 2007. [Equivalent citations: (2008) 117 TTJ Luck 549. iii. The Hon'ble High Court Jodhpur in the case of Suncity Alloys (P) Ltd Vs. АСIT [2009] 124 TTJ 674(JD). iv. Charchit Agarwal. Versus Assistant Commissioner of Income-Tax.2009 (8) TMI 127-ITAT DELHI-B. 3. On the facts and in the circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 1,21,000/- by ignoring the facts that the assessee could not produce any evidence for credit balance appearing in the ledger account of M/s Mallard Holidays and failed to furnish the cogent material in this regard and could not explain when confronted. 4. On the fa....
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.... 3,30,126/- towards prior period expenses without appreciating the ratio of the Judgment of the Hon'ble Apex Court in the case of E D Sasoon. 5. Because on the facts and in the circumstances of the case the Ld. Commissioner of Income Tax(Appeals) -3, Lucknow has grossly erred in sustaining the addition of Rs. 22,355/- towards foreign travel expenses, without properly appreciating the True and Correct facts involved in the case. 6. Because on the facts and in the circumstances of the case the Ld. Commissioner of Income Tax(Appeals) -3, Lucknow has grossly erred in sustaining the addition of Rs. 74,451/-, without properly appreciating the true and correct facts, involved in the case and the addition is wholly illegal and liable to be quashed. 7. Because on the facts and in the circumstances of the case the order passed by the Ld. Commissioner of Income Tax(Appeals) -3, Lucknow in relation to the aforementioned Grounds of Cross-Objection is unsustainable in law and is liable to be quashed and set-aside. 8. The humble appellant craves for leave to add/amend any or all of the aforementioned Grounds of Cross Objection with the leave of the Hon'....
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.... The facts relating to the claim of deduction under section 80IA of the Act are that the assessee filed its revised return of income on 19.3.2016 declaring total income of Rs. 61,24,23,603/- and claimed deduction of Rs. 4,68,60,927/- under Chapter VI-A of the Act. The assessee thereafter again revised its return of income on 21.3.2016 wherein the assessee claimed deduction of Rs. 4,66,10,927/- under section 80IA of the Act. The Assessing Officer was of the view that deduction under section 80IA of the Act is allowable only if return is filed claiming such deduction before the due date specified in section 139 of the Act, which was 30.11.2014. The Assessing Officer was also of the view that the assessee should have submitted the audit report for all the four of its projects in Form No.10CCB along with original return before 30.11.2014. Moreover, according to the Assessing Officer, the assessee failed to maintain separate books of account for each of the four projects under Rule 18BB of the Act and failed to furnish the audit report in Form No.10CCB for each project separately. Accordingly, he disallowed the claim of deduction of Rs. 4,66,10,927/- under section 80IA of the Act. 7.....
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.... (a) It is owned by a company registered in India or by a consortium of such companies [or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act]. (b) It has entered 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. [Explanation For the purposes of this clause, "infrastructure facility means- (a) A road including toll road, a bridge or a rail system. (b) A highway project including housing or other activities being an integral part of the highway project. (c) A water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system. (d) A port, airport, inland waterway [inland port or navigational channel in the sea]]. The Central Board of Direct taxes vide circular ....
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....Ltd. where it has been categorically held "that where time was available for revising the return of income to revise the return originally filed u/s 139 (1) as in A. Y. 2009- 10 or to file the return u/s 139 (1) as in A. Y. 2010-11, the return filed u/s 153A should be considered as a return filed u/s 139 (1) and hence all claim raised in these returns should be decided on merit but where the time available to file revised return has elapsed before search as in A.Y. 2007- 08 and 2008-09, the new claim raised in the return filed u/s 153A is not acceptable." That Assessing officer has also objected that assessee has not furnished Audit report in form no. 10CCB for each project separately. In this regard it is relevant to mention that during the course of assessment proceeding assessee has submitted separate Audited financial statement for each projects namely- 1. KACHWA-Widening & Strengthening of Varanasi, Adalpur, Chunor, Kochwa (S.H.-74) Road km. 11.00-45.500 2. JEEVNATHNPUR-Widening & Strengthening of Jeevnathpur-Kanchanpur-Sikandarpur-Chakiya-Naugarh- Madhupur (SH-97) 3. BABATPUR-Widening & Strengthening of Existing Two Lane to four lane of Bha....
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.... also referred to several judicial pronouncements as per which it was held that there is no requirement that the assessee should have been the owner of the infrastructure facility. The facts in the case of Koya & Co. (Supra) are identical. In that case, the relevant paras of the Tribunal Order are Para No. 21 to 28 and the same are reproduced below for ready reference: "We find that the decision relied on by the learned counsel for the assessee in the case of CIT vs. Laxmi civil Engineering works (supra) squarely applicable to the issue under dispute which is in favour of the assessee wherein it was held that mere development of a infrastructure facility is an eligible activity for claiming deduction under section 80IA of the Act after considering the Judgment of the Mumbai High Court in the case of ABG Heavy Engineering [supra). The case of ABG is not the pure developer whereas, in the present case, the assessee is the pure developer. We also find that Section 80IA of the Act, intended to cover the entities carrying out developing, operating and maintaining the infrastructure facility keeping in mind the present business models and intend to grant the incentives to such e....
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.... correction and liability period, then such contracts cannot be called as simple works contract to deny the deduction u/s 80IA of Act. In our opinion the contracts which contain above features to be segregated on this deduction u/s. 80-IA has to be granted and the other agreements which are pure works contracts hit by the explanation section 80IA(13), those work are not entitle for deduction u/s 80IA of the Act. The profit from the contracts which involves design, development, operating & maintenance, financial involvement, and defect correction and liability period is to be computed by assessing officer on pro-rata basis of turnover. The assessing officer is directed to examine the records accordingly and grant deduction on eligible turnover as directed above. It is needless to say that similar view has been taken by the Chennai Bench of the Tribunal and deduction u/s. 80IA was granted in the case of M/s. Chettinad Lignite Transport Services (P) Ltd., in ITA No. 2287/Mds/06 order dated 27th July, 2007 for the assessment year 2004-05. Later in ITA No. 1179/Mds/08 vide order dated 26th February, 2010 the Tribunal has taken the same view by inter-alia holding as follows: Mor....
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....s squarely applicable because the facts are similar. In the order of CIT (A), he has followed this tribunal order and various other judicial pronouncements as noted by him in his order, as reproduced above. Considering this factual and legal position, we find no infirmity that the order of CIT (A) on this aspect that in the facts of the present case, it cannot be said that the assessee company was mere a contractor and not a developer. Therefore, on issue No. 3, we find no infirmity in the order of CIT(A). This issue is decided in favour of the assessee." 8. The ld. CIT(A), considering the detailed submissions made by the assessee, allowed deduction claimed by the assessee under section 80IA(4) of the Act, vide para 8.2(c) of his impugned order holding as under: "8.2(c) The undersigned has gone through the assessment order, written submissions and judgements relied upon by appellant. The findings are as under:- The appellant carried out 4 projects related to infrastructure development. Deduction of Rs. 4,66,10,927/- has been claimed u/s 80IA(4)(1) of the Act in the revised return of income filed on 21.03.2016 with total income of Rs. 56,70,62,680/-. In....
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....he same in Form No. 10CCB. The appellant contended that separate records of each of the four projects were filed before the AO and no defect was pointed out by the AO in respect of these accounts submitted. In view of the above facts and discussion and judgement of Hon'ble Jurisdictional ITAT in the case of M/s Vijay Infrastructure Ltd the deduction claimed u/s 80IA(4) of the Act is allowed. Ground of appeal No, 7 is allowed." 9. Before us, the ld. D.R., with regard to the issue relating to claim of deduction under section 80IA of the Act, supporting the order of the Assessing Officer, vehemently argued that since the assessee has filed the return for the year under consideration belatedly, the claim of deduction under section 80IA of the Act is not allowable. He further submitted that the assessee has not submitted the audit report for all the four of its projects in Form No.10CCB along with the original return of income before 30.11.2014 and assessee failed to maintain separate books of account for each of the four projects under Rule 18BB of the Act and also failed to furnish audit report in Form No.10CCB for each project separately. Therefore, the claim of deduc....
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....e returns were filed belatedly, that is to say, beyond the period stipulated under subsection 1 or 4 of section 139; and, there are also returns filed after the period with reference to sections 142(1) and 148 of the I.T Act. 19. Section 80A(5) provides that where the assessee fails to make a claim in his return of income for any deduction, inter alia, under any provision of Chapter VIA under the heading "C.-Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder. Therefore, in cases where no returns have been filed for a particular assessment year, no deductions shall be allowed. This embargo in section 80A(5) would apply, though section 80P is not included in section 80AC. This is so because, the inhibition against allowing deduction is worded in quite similar terms in sections 80A(5) and 80AC, of which section 80A(5) is a provision inserted through the Finance Act 33/2009 with effect from 1.4.2013 after the insertion of section 80AC as per the Finance Act of 2006 with effect from 1.4.2006. This clearly evidences the legislative intendiment that the inhibition contained in subsection 5 of section 80A would operate by itself. In cases wh....
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....bove judgment, denial of exemption claimed by the assessee under section 80IA of the Act for the reason that the assessee has not claimed the deduction in the original return filed but in the revised return, is not justified. We find that the ld. CIT(A) has passed a well-reasoned order allowing the claim of the assessee for deduction under section 80IA of the Act and therefore, no interference is called for in the order of the ld. CIT(A). 14. We find that the books of account of the eligible projects were separately maintained by the assessee and separate audited financial statements for each project namely, (i) KACHWAWidening & Strengthening of Varanasi, Adalpur, Chunor, Kochwa (S.H.-74) Road km. 11.00-45.500, (ii) JEEVNATHNPURWidening & Strengthening of Jeevnathpur-Kanchanpur- Sikandarpur-Chakiya-Naugarh-Madhupur (SH-97), (iii) BABATPUR-Widening & Strengthening of Existing Two Lane to four lane of Bhadohi-Kapsethi-Babatpur state highway in District of Bhadohi & Varanasi, and (iv) DUMARIYAGANJ-Construction and Strengthening of Dumariyaganj Dhebrua state highways no. 76 from km 0.000-42.000 in the district of Siddarthnagar. All the four projects were awarded to the assessee by U....
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....gard to grounds No.4 and 5 of the appeal of the Revenue, relating to deletion of additions of Rs. 2,50,000/- and Rs. 7,50,000/-, the ld. CIT(A) vide para 13.3 of his order held as under: "13.3 The AO has made adhoc disallowances of Rs. 2,50,000/- out of various expenses and adhoc disallowance of Rs. 7,50,000/- out of wages/labour charges. The appellant has submitted that books of accounts are properly maintained and all bills/vouchers for expenses debited are fully maintained. I have examined the facts and circumstances of the case. The NP rate for the year under consideration is higher than NP rate of immediately preceding year. The AO has not specified as to which expenses could not be verified out of these expenses. The AO has not specified as to which are those expenses for which there were no supporting bills/vouchers. Not even a single bill/voucher has been identified by the AO in this regard. In the present case proper books of accounts are maintained and audited. The auditor has not pointed out any adverse inference in respect of non-maintenance of bills/vouchers in the Audit report. Nor has the AO identified the specific bills/vouchers which coul....
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....hat the ld. CIT(A) has deleted the ad hoc disallowances made by the Assessing Officer, relying on various decision of the Lucknow Bench of the Tribunal and after considering the facts and circumstances of the case. The ld. D.R. could not point out any error in the order of the ld. CIT(A), who has rightly deleted the ad hoc disallowances made by the Assessing Officer. Accordingly, we confirm the order of the ld. CIT(A) on these issues and reject grounds No.4 & 5 of the appeal of the Revenue. 19. Ground No.6 of the appeal of the Revenue relates to the deletion of addition of Rs. 6,75,950/- made by the Assessing Officer under section 40(a)(ia) of the Act. The ld. CIT(A) deleted the said disallowance vide paras 14.1 to 14.3 of his order, observing as under: "14.1 Ground of appeal No. 6 (Disallowance of Rs. 675950/- u/s 40(a)(ia)) AO noted that appellant had paid a sum of Rs. 6,75,950/- under the head commission but TDS was not deducted u/s 194H of the Act. The AO disallowed this amount u/s 40(a)(ia) of the Act and added it to total income of the appellant. 14.2 The written submissions of the appellant on this issue are outlined in para 7 of this order. 14.....