TMI Blog2012 (12) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. Addition being the amount of shortfall in the contract receipts - Held that:- As the assessee was not able to controvert the findings of the AO and CIT(A) that the assessee was unable to explain or reconcile the difference of Rs.40,582 in the contract receipts declared by the assessee and the contract receipts reflected in the TDS Certificates of Indian Oil Corporation, Mangalore Chemicals & Fertilisers and The Indian Navy. As this fact was acknowledged by the assessee before the AO in the course of assessment proceedings no hesitation in confirming the addition made by the AO in respect of undeclared contract receipts - against assessee. - ITA Nos.30 & 31/Bang/2010 - - - Dated:- 25-7-2012 - N V Vasudevan, Jason P Boaz, JJ. For Appellant: Smt Sheetal Borkar For Respondent: Smt Susan Thomas Jose ORDER Per: Jason P Boaz: These two appeals are directed by the assessee against the consolidated order of the Commissioner of Income Tax (Appeals), Mangalore dt.10.11.2009 for Assessment Years 2005-06 and 2006-07. As common issues are involved, these appeals are being disposed off by way of a common order. 2. The facts of the case, in brief, are as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellant was operating and maintaining the infrastructure facility and therefore the disallowance as made by the assessing authority ought not to have been upheld by him. 3. The Commissioner (A) ought to have appreciated that there being no works contract involved the disallowance of deductin under section 80IA by the Assessing Officer was not justified. 4. Without prejudice, the Commissioner (A) ought to have appreciated that the decision of the Special Bench of the Hon'ble ITAT of Mumbai in the case of M/s. B.T. Patil Sons Belgaum Construction Pvt Ltd Vs.ACIT (ITA Nos.1408 1409/PN/2003 dt.26.10.2009) was distinguishable on facts and not applicable to the facts of the case on hand. 5. Without prejudice, the Commissioner (A) ought to have appreciated that the Explanation to section 80IA was inserted only in 2007 though was made effective retrospectively from 1.4.2000 which the appellant could not have foreseen and ought to have allowed the deduction as claimed for. 6. The Commissioner (A) erred in confirming the interest levied under section 234B 234D of the Act. 7. For those and other grounds that may be urged at the time of hearing of the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in the case of ACIT Vs. JSR Construction P. Ltd in ITA No.898/Bang/2009 dt.29.3.2011. 4.3 The learned Departmental Representative, on the other hand, supported the orders of the authorities below. It was submitted that the provisions of the Explanation to section 80IA(3) clarifies the position in as much as, vis- -vis the facts of the present case, it clearly establishes that the assessee has only carried out a works contract and was in no way involved in the development of any infrastructure facility. The learned Departmental Representative drew our attention to pages 1,2,5 and 6 of the paper book filed by the assessee on 8.6.2010 wherein the developer of the Champakara and Udyogmandal canals in Kerala, viz. The Inland Waterways Authority of India (IWAI) had awarded works contract to the assessee for rip-rap masonery for protection of the walls of these canals. The learned Departmental Representative submitted that it is common knowledge that these canals have been developed and constructed decades ago and the assessee was in no way involved in that process of development or construction or creating the infrastructure thereof. What the assessee has been engaged to do, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otection work for the Tapi Riverbank under the authority of the Surat Municipal Corporation, Gujarat. The assessee claimed a deduction under section 80IA of the Act thereon, on the ground that it had undertaken the construction and maintenance of an infrastructure facility. 5.1 Section 80IA(i) reads as under : Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. It is the claim of the assessee that it is eligible for deduction under section 80IA on the ground that its business activity as per sub-section (4) thereof is the developing, operating and maintaining of infrastructure facility namely, the repair and maintenance of protection walls for the two canals in Kerala and the riverbank in Gujarat. We have peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and maintenance of container handling cranes at the container terminal of Jawaharlal Nehru Port Trust (JNPT) in openable condition on BOLT basis. This work was certified by JNPT to be an integral part of setting up of the port which by definition was included in the purview of the expression infrastructure facility. The Mumbai Tribunal and the Hon'ble High Court of Bombay held that the assessee s had developed the infrastructure facility on BOLT basis and was therefore entitled to deduction under section 80IA. In the instant case of the assessee, the facts are clearly different. No infrastructure was developed by the assessee. Rather, it only carried out the works contract of refurbishing/repairs and protection of the permanent walls of the existing canals and riverbanks under works contract from the IWAI and Govt. of Gujarat. Therefore, we are of the view that the facts of the cited case are different and the finding thereon would not come to the assessee s rescue. 5.3.2 In the case of JSR Constructions P. Ltd. (supra), the facts were that the assessee was a Member of a two entity consortium which was awarded a contract by NHAI. The entire work was executed by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case on hand and therefore it is clear that the assessee is not eligible to be allowed deduction under section 80IA of the Act. In the course of arguments, the learned Departmental Representative had cited and placed reliance on the decision of the Chennai Tribunal in the case of ACIT Vs. Indwel Linings P. Ltd. (2009) 313 ITR (AT) 118 . We have perused the cited decision and find that the assessee in that case we engaged in undertaking works for in situ lining for water supply project and anti-corrosive lining and had claimed deduction under section 80IA of the Act. The Tribunal after examining the facts of the case held that the benefit of deduction under section 80IA was available only to a developer as it was a condition precedent for grant of the benefit of this section that the undertaking or enterprise must drive income from carrying on the business of developing an infrastructure facility. The Tribunal held that the assessee had entered into a contract for executing works contract and therefore the benefit of deduction under section 80IA would not be available to it. We find that the facts of the cited case are identical to that of the present case and are therefore of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard both parties and carefully perused and considered the submissions made and the material on record. We find that before us except for reiterating the ground raised, the learned counsel for the assessee was not able to controvert the findings of the Assessing Officer and learned CIT(A) that the assessee was unable to explain or reconcile the difference of Rs.40,582 in the contract receipts declared by the assessee and the contract receipts reflected in the TDS Certificates of Indian Oil Corporation, Mangalore Chemicals Fertilisers and The Indian Navy. This fact was acknowledged by the learned counsel for the assessee before the Assessing Officer when confronted with the same by the Assessing Officer in the course of assessment proceedings. These facts are also recorded at page 4 of the order of assessment and in paras 21 and 22 of the order of the learned CIT(A). In this view of the matter, we have no hesitation in confirming the addition of Rs.40,582 made by the Assessing Officer in respect of undeclared contract receipts. This ground of appeal is therefore dismissed. 7. The assessee has challenged the charging of interest under sections 234B and 234D of the Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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