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2012 (4) TMI 149 - AT - Income TaxNotice under section 153 - There was a search operation conducted at the business premises and there was seizure of some incriminating documents and the cases were notified with the DCIT - Thereafter, notice under section 153A has been issued consequent to the search action - Held that:- no merit in the ground this ground of the assessee is dismissed. - Notice issued u/s 153 upheld. Deduction under section 80IA - the assessee contended that he is not a contractor but a developer of infrastructure facility – revenue denied it as the assessee not developed any new infrastructure facility as required under section 80IA(4)(i)(b) had only taken up the renovation and modernization of the existing net work/infrastructure facilities - Held that:- in view of retrospective amendment, the most important question for examination on facts is whether the business agreement in question can be termed a works contract or not. If the answer is in affirmative, nothing else matters because the Explanation takes over. If not, the other nuances such a development/operation etc., and other specified conditions become relevant. - where an assessee incurred expenditure for purchase of materials himself and executes the development work i.e., carries out the civil construction work, he will be eligible for tax benefit under section 80 IA of the Act. In contrast to this, a assessee, who enters into a contract with another person including Government or an undertaking or enterprise referred to in Section 80 IA of the Act, for executing works contract, will not be eligible for the tax benefit under section 80 IA of the Act. Ownership of project - held that:- according to sub-clause (a), clause (i) of sub section (4) of Section 80-IA the word “it” denotes the enterprise carrying on the business. The word “it” cannot be related to the infrastructure facility, particularly in view of the fact that infrastructure facility includes Rail system, Highway project, Water treatment system, Irrigation project, a Port, an Airport or an Inland port which cannot be owned by any one. Even otherwise, the word “it” is used to denote an enterprise. Therefore, there is no requirement that the assessee should have been the owner of the infrastructure facility. The assessee should not be denied the deduction under section 80IA of the Act if the contracts involves design, development, operating & maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract to deny the deduction u/s 80IA of Act. - Matter remanded back to AO. Sustaining/deleting of the expenses in the absence of bills and vouchers – Held that:- disallowance of expenses in these years also at 5% confirmed. Self made vouchers and bills in respect of purchase of sand – disallowed expenses by AO - there are chances of inflating the expenditure - Held that: - direct the assessing officer to disallow Rs.50 lakhs of the expenditure incurred by the assessee as it is not substantiated. Ground in assessee appeal partly allowed. Addition is made towards the difference between projected/provisional balance-sheet and the final balance-sheet. - The provisional balancesheet cannot be considered for determining the undisclosed income. However, as per disposition an amount of Rs.80 lakhs was agreed to be admitted as income, the same be considered as income on this count and no set off could be given towards workin- progress in any subsequent assessment year. This ground of assessee partly allowed. Seizure of cash - held that:- Either the assessee’s explanation is to be accepted as a whole or rejected as a whole. They cannot pick and chose according to their convenience and make addition. In our o opinion, the addition made towards cash found at the premises of Sri K. Venkata Kutumba Rao, cannot be made either in the hands of the assessee’s company i.e. M/s GVPR Engineers Limited or in the hands of Sri Siva Shanker Reddy. Accordingly, this ground of assessee is allowed.
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