TMI Blog2014 (1) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... e Finance Act, 2009 w.e.f. 01.04.2000 being an hindrance to the statutory deduction available to the assessee under the provisions of section 80IA(4) - Decided in favour of Assessee. - ITA Nos. 142 & 143/CTK/2010 & ITA Nos. 483 & 484/CTK/2010 - - - Dated:- 13-6-2013 - Shri K. K. Gupta, AM And Shri George Mathan, JM,JJ. For the Petitioner : Shri P. S. Panda K. Agarwalla, ARs For the Respondent : Shri P. K. Dash, CIT, DR ORDER Per Bench: ITA Nos. 142 143/CTK/2010 filed by the assessee against the separate orders of CIT, Bhubaneswar passed u/s. 263 of the Income-tax Act, 1961 (hereinafter referred to as the Act) in Memo Nos. CIT/BBSR/Tech./263/13/2009-10/9089-91 and CIT/BBSR/Tech./263/13/2009-10/9086-77 both dated 18/23.03.2010 respectively. ITA Nos., 483 484/CTK/2011 filed by the assessee against the separate orders of CIT(A)-II, Bhubaneswar passed in Appeal No.0019/10-11 and 0155/09-10 both dated 14.09.2011 respectively. 2. S/Shri P. S. Panda and K. Agarwalla, ARs appeared for the assessee and Shri P. K. Dash, CIT, DR appeared for the revenue. 3. In both the appeals i.e. ITA Nos. 142 143/CTK/2010, the only issue is against the action of the Ld. CIT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that a show cause notice is to issue by the Ld. CIT u/s. 263 of the Act. It was the submission that the assessee should be informed of the proposal and the issue on which the Ld. CIT proposed to invoke his powers u/s. 263 of the Act. He also relied on the decision of the Hon'ble Delhi High Court in the case of Asish Rajpal reported in 320 ITR 674 (Del.). 5. It was further submitted by the Ld. AR that the Ld. CIT had passed his order u/s. 263 of the Act wherein in para 4 of his order the Ld. CIT had held that the assessee was doing a work contract and was consequently not eligible for the deduction u/s. 80IA(4) of the Act. It was further submission that the Ld. CIT had invoked the provisions of explanation to section 80IA which had been substituted by the Finance Act 2009 with retrospective effect from 01.04.2000. It was the submission that when the AO had passed his assessment order for AY 2007-08 the explanation was available in the statute still the AO had drawn a conclusion that the work done by the assessee was development of an infrastructure facility and was entitled to the deduction u/s. 80IA(4) of the Act. It was the submission that the AO had formed an opinion on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court in the case of S. Sundaram Pillai Ors reported in AIR (1985) SC 582. It was the submission that the development work done by the assessee is works contract liable for deduction of TDS and that was why the TDS has also been deducted. Before us, it was the submission that the assessee was rightly held to be eligible for deduction u/s. 80IA(4) of the Act by the AO and consequently, order of the Ld. CIT passed u/s. 263 of the Act was liable to be quashed. 7. In reply, the Ld. CIT, DR submitted that the Act had been amended and the explanation has been introduced whereby works contract was held to be not eligible for deduction u/s. 80IA(4) of the Act. It was the submission that works contract for the said explanation meant any work taken on contract. It was the submission that the legislative intent was to give benefit only to Build, Operate and Transfer contracts (BOT). It was the submission that in view of the explanation to section 80IA of the Act, the AO had no option but to follow the provisions of section as controlled by the explanation to sec. 80IA. It was the submission that as this was not done by the AO, the order was erroneous and prejudicial to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has chosen one of the two views in respect of the claim of deduction u/s. 80IA(4) of the Act and in view of the decision of the Hon'ble Karnataka High Court in the case of Gokuldas Exports Ors., referred to supra, we are of the considered view that the order passed u/s. 263 of the Act is not sustainable in law and consequently, the same stands annulled. This view of ours also find support from the decision of the Hon'ble Bombay High Court in the case of Ranka Jewellers Vs. Addl. CIT (2010) 328 ITR 148. 10. Now coming to the merits of the deduction u/s. 80IA(4) of the Act. A perusal of the provisions of section 80IA(4) of the Act shows that in the explanation 'infrastructure facility' has been specified to mean a road including a toll road, a bridge or a rail system. Admittedly, the assessee is doing the business of development of railway tracks and bridges thereof as also roads. If, we are to accept the contention of the Ld. CIT that the provisions of section 80IA(4) of the Act after the substitution of the explanation to section 80IA of the Act was introduced was only for the purpose of giving the benefit to BOT contracts then, the explanation to section 80IA(4) of the Act be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trospective effect of 01.04.2000 is attempting to take away the statutory benefit granted to the assessee u/s. 80IA(4) of the Act without making any amendment to the explanation to section 80IA(4) of the Act, the said explanation substituted by the Finance Act, 2009 w.e.f. 01.04.2000 being an hindrance to the statutory deduction available to the assessee under the provisions of section 80IA(4), the said explanation would have to stand down in view of the decision of the Hon'ble Supreme Court in the case of S. Sundaram Pillai, referred to supra. Consequently, on this ground also the order passed u/s. 263 of the Act by the Ld. CIT for AY 2006-07 and 2007-08 stands quashed. Appeals of the assessee are allowed. 11. As we have allowed the assessee's appeal in ITA Nos. 142 and 143/CTK/2010 the appeals filed by the assessee in ITA Nos. 483 484/CTK/2011 which has its foundation on the order giving effect to the order passed u/s. 263 of the Act by the Ld. CIT, which have been quashed in the appeals of the assessee in ITA No. 142 143/CTK/2010, the same stand allowed. The ITA No. 483 484/CTK/2011 is consequential in nature and stand allowed. 8. In the result, appeals of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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