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2017 (5) TMI 406 - AT - Income TaxRevision u/s 263 - AO had not examined the claim of the assessee to deduction under section 80-IA(4) vis-a-vis Explanation 13 to the said section which excludes profits earned from works contracts from deduction under section 80-IA(4) - Held that:- There is no dispute about the fact that in the preceding assessment year, i.e. the assessment year 2010-11, which was the first year of claim of deduction under section 80-IA, the assessee was allowed the same under section 143(3) of the Act. This means that for all purposes the claim of the assessee having been examined in the light of the parameters of eligibility laid down under section 80-IA, it could not be said that in the succeeding year those very same parameters had changed on the same set of facts. The Assessing Officer, after considering all the documents placed before it, had in the preceding year concluded that the assessee was carrying out an infrastructure related project which was not in the nature of works contract as defined under section 80-IA(13), read with Explanation and thus the assessee was eligible to claim deduction under section 80-IA of the Act. In the impugned case, which is the succeeding year, on the very same set of facts the findings of the preceding year on the fact that the assessee was carrying out eligible infrastructure project and not works contract, cannot now be disturbed, which is exactly what has been stated by the High Court in the order passed in the case of Micro Instruments Co. (2016 (9) TMI 210 - PUNJAB AND HARYANA HIGH COURT ). Following the same also we hold that the learned Principal Commissioner of Income-tax could not have exercised his revisionary powers since the claim of the assessee had been decided in the preceding year itself and without disturbing the same it could not have been dislodged in the impugned year. Thus we set aside the order of the learned Principal Commissioner of Income-tax on this count. The assessee's claim for deduction under section 80-IA was examined in all respects by the Assessing Officer during the course of assessment proceedings and duly allowed. Moreover the fact that the assessee had been allowed deduction on the same pattern in the preceding and succeeding years lends credence to the allowance of the claim by the Assessing Officer in the impugned year also. Further we find that the learned Principal Commissioner of Income-tax has no basis at all for stating that the profit earned on account of job work got done by sub-contractors was a separate contract which was not eligible for deduction under section 80-IA of the Act. What can be gathered from the findings of the learned Principal Commissioner of Income-tax is that the assessee is eligible for deduction under section 80-IA only on account of work/contract/project executed by it. We find that this understanding of the provisions of section 80-IA is incorrect and has no judicial precedents at all and on account of the same we hold that there is no error in the order of the Assessing Officer on this count also and set aside the same for this reason. The provisions of section 80-IA(8)/80-IA(10) are attracted only between transactions that take place between an eligible and non-eligible entity. The learned Principal Commissioner of Income-tax has not pointed out as to which among the two projects are eligible and which is not eligible. Having not pointed out the same we fail to understand how the learned Principal Commissioner of Income-tax came to the conclusion that an error had occurred in the order vis-a-vis the applicability of the provisions of section 80-IA(8)/80-IA (10) of the Act and so we find that the learned Principal Commissioner of Income-tax has failed to point any error in the order of the Assessing Officer in this regard. Further as stated above the issue had been examined during the assessment proceedings as held above by us and therefore there was no error in the order of the Assessing Officer. We therefore set aside the order of the learned Principal Commissioner of Income-tax on this count also. - Decided in favour of assessee.
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