TMI Blog2013 (12) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... r of assessee. Interest received on provision of bank guarantee – Held that:- Following assessee's own cases for assessment years 1991-92 and Tuticorin Alkali Chemicals & Fertilisers Ltd.[1997 (7) TMI 4 - SUPREME Court] – Income attracts tax as soon as it accrues. The application/destination of the income has nothing to do with its accrual/taxability - Interest income is always of a revenue nature unless it is received by way of damages/compensation - Decided against assessee. Deduction u/s 80IA – Held that:- following assessee's own case for earlier years - The contractor and the developer cannot be viewed differently. Every contractor may not be a developer but every developer developing infrastructure facility on behalf of the Government is a contractor - The assessee has developed infrastructure facility as per the agreement - Merely because in the agreement for development of infrastructure facility the assessee is referred to as a contractor or because some basic specifications are laid down, it does not detract the assessee from the position of being a ‘developer’ nor will it debar the assessee from claiming deduction u/s 80IA(4) – Decided against Revenue. - ITA No.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the head 'other sources' of Rs.2,37,69,481 on account of interest on FDRs and other interest. On appeal, the CIT(A) upheld the estimation made by the Assessing Officer adopting a rate of 12.5% in respect of gross receipts from contract executed by the assessee and a rate of 7.5% in respect at gross receipts from sub-contracts. He also upheld the action of the Assessing Officer in treating the interest on FDRs and other interest of Rs.2,37,69,481 representing income from other sources, as against the plea of the assessee to treat the same as income from business. 4. But for the amounts involved, facts of the case for the assessment year 2009-10 are identical, and hence the same are not repeated for the sake of brevity. 5. Aggrieved by the impugned orders of the CIT(A) sustaining the additions on the aspects discussed above, assessee preferred the present appeals before us. 6. First grievance of the assessee in its appeal relates to estimation of profit by the Assessing Officer from the contract receipts of the assessee. The learned counsel for the assessee, reiterating the contentions urged before the lower authorities submitted that the assessee has no objection with rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year in which such recoveries have been released in favour of the assessee by the Government. However, this aspect of the matter needs to be examined. We accordingly set aside the impugned orders of the CIT(A) on this aspect, and restore the matter to the file of the Assessing Officer, with a direction to verify the contention of the assessee that the assessee has been disclosing the recoveries effected in the year under appeal in any subsequent assessment year, and decide the year in which income resulted by such recoveries is assessable. He shall accordingly redecide this issue in accordance with law and after giving reasonable opportunity to the assessee. 9. The next grievance of the assessee in this appeal relates to the addition made by estimating the income in respect of the works entrusted to the sub-contractors, at 7.5% of the gross receipts. 10. The learned counsel for the assessee reiterating the contentions urged before the lower authorities submitted taking us through the copies of relevant schedules forming part of its final accounts, furnished in the paper book that the assessee paid an amount of Rs.27,63,32,548 to its sub-contractors and the said amount is debite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts furnished in the paper- book, it is submitted that the interest is derived from the fixed deposits and the deposits represent the margin money. It is submitted that a note is also provided in the relevant schedules in the final accounts indicating that the deposits were made for providing margin money. He placed reliance on the decision of the Tribunal(TM) in assessee's own case for assessment years 1991-92 and 1992-93 in ITA Nos.380 381/Hyd/1994 of the assessee and ITA Nos.601 602/Hyd/1994 of the department, duly furnishing copies of the orders of the Division Bench and Third Member before us, and submitted that the Tribunal held that the interest on fixed deposits cannot be separately assessed as income from "other sources" when the net income is estimated applying a flat rate of profit. It is also submitted that the said decision has also been followed by the Tribunal in assessee's own case for assessment year 1995-96, vide order dated 21.11.2001 in ITA No.1417/Hyd/97. Learned counsel for the assessee also placed reliance on the decision of the jurisdictional High Court in the case of CIT V/s. Vidyut Steel Ltd. (219 ITR 30) wherein it was held that interest derived on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 18. Effective grounds of the Revenue, common in both these appeals, read as follows- "1 The CIT(A) erred in law in setting aside the assessment to the file of the A.O. for taking a decision on deduction allowable u/s. 80IA 2 The CIT(A) erred in law in granting deduction u/s. 80IA in the case of simple works contract in violation of explanation to section 80IA and also in violation of Circular No.4/2010. 3. The CIT(A) erred in law in laying down principles to define "developer" which are in violation of statute. 4. The CIT(A) granted 80IA deduction in a case where assessee did not get income as developer upon exploitation of a developed asset built by him. 5. ....." Thus, the only effective grievance of the Revenue in these appeals relates to allowance of deduction under S.80IA to the assessee. 19. Facts of the case in brief for the assessment year 2008-09 are that the Assessing Officer while completing the assessment vide order dated 16.12.2010 passed under S.143(3) of the Act, inter-alia disallowed the claim of the assessee, which is a company engaged in the business of execution of civil contract works, for deduction of Rs.25,07,70,047 under S.80IA of the Act. O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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