Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (4) TMI 520 - AT - Income TaxRevision u/s 263 - as per CIT contract allotted to the assessee was covered under the definition of Works Contract' and, therefore, the assessee was not entitled to deduction u/s 80IA(4) as was claimed and wrongly allowed - HELD THAT:- As decided in SIMPLEX SOM DATT BUILDERS J.V. VERSUS I.T.O WARD 33 (4) , KOLKATA [2013 (6) TMI 813 - ITAT KOLKATA] a perusal of the turnkey contract agreement entered into by the assessee with the irrigation department clearly showed that the construction of all the structure of whole of the canal system was to be as per the approved design, drawings of the Department etc. Survey is to be done as per the investigation and drawing criteria of the Irrigation Department. The assessee has to procure the material independently and those materials are to be conformed to the specifications provided. The assessee has also to make arrangement for storage of the materials. Tribunal held that such work carried out by the assessee would fall in the exclusion provided to the meaning of the ‘work’ given in the explanation to section 194C and it would also be out of the scope of ‘explanation to sub section (13) of section 80IA’. The Koltaka Bench of the Tribunal in the case of ‘Adhunik Infrasture (P) Ltd vs JCIT’KOLKATA [2018 (6) TMI 89 - ITAT KOLKATA] held that deduction u/s 80IA(4) cannot be denied to an assessee merely because the assessee has been paid by the Government for development work. Neither the Ld. PCIT could even point out how the fact and nature of the projects carried out during the year under consideration were different from the projects earlier taken by the assessee which have already been held to be eligible for deduction u/s 80IA(4) being Infrastructure Facility Development Project, nor the Ld. PCIT could point out from the clauses of the agreement that they would not fall within the definition of infrastructure development project as provided u/s 80IA(4) . PCIT has exercised her jurisdiction u/s 263 totaling bye- passing and in contradiction of the findings given by the Tribunal in the own cases of the assessee for earlier assessment years - all the material was put before the Assessing Officer including the copies of the contracts - AO has duly taken note of the nature of contract entered into by the assessee and held that the same were infrastructure facilities development contracts and eligible for deduction u/s 80IA of the Act. Hence, it cannot be said that the order passed by the Assessing Officer was erroneous or prejudicial to the interest of Revenue on this issue. Deduction u/s 80IA on profits derived from the project of water supply - HELD THAT:- Assessee’s claim for deduction under section 80IA was examined in all respects by the Assessing Officer during the course of assessment proceedings and duly allowed - 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 - CIT has no basis at all for stating that the profit earned on account of job work got done by subcontractors was a separate contract which was not eligible for deduction under section 80IA - What can be gathered from the findings of the learned Pr. CIT is that the assessee is eligible for deduction under section 80IA only on account of work/contract/project executed by it. We find that this understanding of the provisions of section 80IA 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. Receipts from the water supply project and Hamirpur bypass project in the ratio of 2.8:1, the expenses incurred on freight and carriage, fuel and wages and salary are comparatively higher in case of Hamirpur bypass project and the comparative details have not been examined by the Assessing Officer - HELD THAT:- The provisions of section 80IA(8)/80IA(10) are attracted only between transactions that take place between an eligible and non-eligible entity. learned Pr. CIT 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 Pr. CIT came to the conclusion that an error had occurred in the order vis-a-vis the applicability of the provisions of section 80IA(8)/80IA (10) of the Act and so we find that the learned Pr. CIT 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 assessment proceedings as held above by us and therefore there was no error in the order of the Assessing Officer. - Assessee appeal allowed.
|