TMI Blog2015 (12) TMI 1517X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above and in view of the detailed reasoning given by the CIT(A) deleting the addition made u/s.69B of the Act we find no infirmity in the same.- Decided in favour of assessee Depreciation on windmill and MEDA charges - Held that:- The AO has accepted the rate of depreciation as claimed by the assessee and MEDA charges was allowed as business expenditure. No incriminating material whatsoever was found during the course of search or 153A proceedings. The Hon’ble jurisdictional High Court in the case of All Cargo Global Logistics Ltd./ Continental Warehousing Corporation (2015 (5) TMI 656 - BOMBAY HIGH COURT ) has held that completed assessments cannot be disturbed by making additions which is not based on any incriminating material found during the course of search or during 153A proceedings - Decided in favour of assessee Addition on the basis of loose papers found during the course of search - Held that:- A perusal of the assessment order shows that the AO has not carried out any verification in support his contention that notings conclusively prove that the entries in the loose papers are infact speed money/bribe paid to various persons whose names are mentioned agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eletion made by the CIT(A) and justify such deletion. In view of the above we reverse the order of the CIT(A) on this issue and the ground raised by the revenue is allowed. - Decided against assessee Addition on account of undervaluation of WIP - Held that:- The assessment had not been completed for the A.Y. 2009-10 when the search took place and the same was pending. The Ld. Counsel for the assessee was unable to explain the non consideration of work-in-progress in the final accounts. In view of the above and in view of the detailed reasoning given by the Ld.CIT(A) while confirming the addition on account of undervaluation of work-in-progress we find no infirmity in the same.- Decided against assessee Levy of interest u/s.234A - Held that:- A non-obstante clause has been inserted and with a defined intent. In our opinion, once the search takes place on a person and the due date for filing of the return u/s.139(1) has not expired he can file the return only after the issue of notice u/s.153A. He is not required to file the return u/s.139(1). Therefore, the authorities below are not justified in levying interest u/s.234A of the I.T. Act for a period from 31-10-2009 to 20-07-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already completed prior to search for this year, there was no reason to disallow the deduction u/s.80IA(4) in the asst. framed u/s.153A. 2. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal. 5. The Ld. Counsel for the assessee referring to pages 15 to 97 of the paper book drew the attention of the Bench to the claim made u/s.80IA(4) amounting to ₹ 84,02,555/-. Referring to pages 15 to 26 of the paper book he drew the attention of the Bench to the original assessment order passed u/s.143(3) on 22-12-2006 where the AO at para 4.13 of the order has disallowed such claim of deduction u/s.80IA(4) of the I.T Act, 1961. Referring to the order of the Tribunal, for A.Y. 2004-05, copy of which is placed at pages 3 to 8 of the paper book he submitted that the Tribunal following the decision of the Tribunal in assessee s own case for the preceding assessment year, confirmed the order of the CIT(A). Referring to the copy of the order of the Hon ble High Court placed at pages 1 and 2 of the paper book he submitted that the Hon ble High Court vide ITA No.1458/PN/2011 order dated 11-02-2013 following the decision in assessee s own case for A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order relating to assessment year 2004-2005 and restore the matter to the file of the Tribunal, for a fresh decision in accordance with law. 4. All the contentions of parties are kept open to be urged before the Tribunal. 9. We find the Tribunal in assessee s own case in the preceding assessment order vide ITA No.433/PN/2007 order dated 06-02-2012 following the decision of Hon ble Bombay High Court in the case of CIT Vs. ABG Heavy Industries Ltd. and other reported in 322 ITR 323 and various other decisions allowed the claim of deduction u/s.80IA(4) of the Act. However, as pointed out by the Ld. Counsel for the assessee we find no disallowance has been made u/s.80IA(4) in the assessment order passed u/s.153A of the Act. Therefore, the ground raised by the assessee becomes academic in nature. Accordingly, the same are dismissed. 10. Grounds of appeal No.2 by the assessee being general in nature is dismissed. ITA No.50/PN/2013 (By Revenue) (A.Y. 2004-05) : 11. Ground of appeal No.1 by the Revenue reads as under : 1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition made u/s.69B on account of difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments as made before the AO. It was submitted that various documents in connection with the above property were furnished before the AO during original assessment proceedings u/s.143(3). These were verified and the profits returned by the assessee were accepted by the AO. It was further argued that in absence of any incriminating material found during the course of search no addition could have been made. The decision of Hon ble Delhi High Court in the case of CIT Vs. Puneet Sabharwal reported in 338 ITR 485 was also brought to the notice of the CIT(A). 15. Based on the arguments advanced by the assessee the Ld.CIT(A) deleted the addition by observing as under : 15. I have considered the submissions of the appellant with reference to the facts on record. As noticed above, an addition of ₹ 18,58,001/- has been made under section 69B. I find that while filing the returns of income for the assessment year 2004-05, the appellant had shown profit on sale of plots received in kind to the tune of ₹ 25,50,000/-. This income had also been shown in the profit and loss account under the head other income on which profit on sale of plot was included. The assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the various clauses of the agreement he submitted that the assessee was to receive consideration of ₹ 44 lakhs and 5 flats. In the original return filed by the assessee it has computed the income on sale of plot by considering the consideration received at ₹ 24 lakhs. Thereafter the assessee filed a revised return wherein the income on sale of plot was enhanced by ₹ 25,50,000/- being valuation of 5 flats to be received by the assessee as per the said agreement. Referring to pages 94 to 97 of the paper book the Ld. Counsel for the assessee drew the attention of the Bench to the original computation statement and the revised computation statement. He submitted that the original assessment was completed u/s.143(3) and during the original assessment proceedings the agreement entered into with Partha Developers was submitted to the AO. He submitted that the AO in the assessment proceedings u/s.153A had referred the matter to the DVO for valuing the cost of 5 flats to be received by the assessee. Since the DVO determined the cost of the 5 flats at ₹ 44,08,000/- the AO made addition of ₹ 18,58,001/- as unexplained investment u/s.69B. He submitted that the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/2009 she drew the attention of the Bench to the following observations of the Hon ble Court to the proposition that what would abate and what will not abate : 13) In the present case, there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which would show that the relief under Section 80 HHCC was erroneous. In such a case, the A.O. while passing the assessment order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalised on 29.12.2000 relating to Section 80 HHC deduction and consequently the CIT could not have invoked jurisdiction under Section 263 of the Act. 14) Moreover, since the A.O. had made addition on account of undisclosed income at ₹ 89,19,477/- in the assessment order passed under Section 153A, there was no question of computing book profits under Section 115 JA of the I.T Act. When the addition of undisclosed income was deleted by CIT (A) 'without any direction to compute the book profits, the A.0. was bound to modify the assessment order passed under Section 153A read with S. 143(3) of the Act as directed by CIT(A). Therefore, in the facts of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has taken the sale instance of the year 2005-06 instead of taking comparable sale instances of 2003-04. 24.1 We further find the Hon ble Bombay High Court in the case of Continental Warehousing Corporation (Supra) after considering the decision of Hon ble Karnatak High Court in the case of Canara Housing Development Company (Supra) and Hon ble Delhi High Court in the case of Anil Kumar Bhatia (Supra) has held that the AO while passing the independent assessment order u/s.153A r.w.s. 143(3) of the Act could not have disturbed the assessment/re-assessment order which has attained finality unless the materials gathered in the course of search or the proceedings u/s.153A of the I.T. Act establish that the reliefs granted in the finalized assessment/re-assessment were contrary to the facts unearthed during the course of 153A proceedings. Since in the instant case, there is nothing on record to suggest that any material was unearthed during the search or in 153A proceeding which would show that non-addition u/s.69B was erroneous, therefore, we do not find any infirmity in the order of the CIT(A) deleting the addition made by the AO. In view of the above and in view of the detailed rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. He therefore issued a show cause notice to the assessee. 30. It was explained by the assessee that the material purchased at site or material transferred from Head Office to site is expensed out and included in cost of construction of site. However, the AO was not satisfied with the explanation given by the assessee. He observed that the assessee has not maintained day to day consumption record of material at site. No RA bills are raised after date of receipt of said advance to the end of relevant year. Even if material is expensed out it goes to construction which is not claimed so as to go to contract receipt account. Therefore, the AO held that non disclosure of work-in-progress has resulted into short disclosure of income. In view of the above he made addition of ₹ 7,07,195/- to the total income of the assessee as undisclosed work-inprogress. 31. Before CIT(A) it was submitted that in respect of the A.Yrs. 2005-06 and 2006-07 original assessments were completed in its case. No incriminating documents were found during the search and therefore this issue could not be re-agitated in post search assessments. It was further submitted that the AO had passed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of search or during 153A proceedings. Therefore, this addition is not justified in assessment completed u/s.153A. For the above proposition, the Ld. Counsel for the assessee relied on the decision of Hon ble Bombay High Court in the case of All Cargo Global Logistics Ltd./Continental Warehousing Corporation (Supra) and submitted that no addition can be made in completed assessment in absence of any incriminating material found. He relied on his submissions made for A.Y. 2004-05 while arguing addition u/s.69B in the ground of appeal No.1 filed by the Revenue. 35. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). She submitted that addition can be made not only on the basis of incriminating material found during the course of search but even during assessment proceedings u/s.153A of the I.T .Act. The Ld. Departmental Representative relied on her arguments for A.Y. 2004-05 while arguing for deletion u/s.69B. 36. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed u/s.143(3) on 24-04-2007 the claim of deduction u/s.80IA(4) was disallowed. The matter travelled upto the Tribunal and the issue was decided against the assessee. The assessee filed an appeal before the Hon ble Bombay High Court. The Hon ble High Court vide order dated 11-02-2013 in ITA No.1459/2011 restored the issue to the file of the Tribunal for fresh adjudication. In the assessment completed u/s.153A the AO, while computing the total income, has started with the figure of income as per assessment order passed u/s.143(3). He has not made any disallowance u/s.80IA(4) in the assessment order completed u/s.153A. The Ld. Counsel for the assessee submitted that since the Hon ble High Court has restored the issue to the file of the Tribunal and since no disallowance has been made u/s.80IA(4) in the assessment order passed u/s.153A, therefore, this issue of allowing deduction u/s.80IA(4) becomes academic. The Ld. Departmental Representative fairly agreed for the above submission of the assessee. 40. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We find in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) : 43. The only ground raised by the Revenue reads as under : 1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction u/s.80IA(4) of ₹ 1,46,85,364/-. 44. After hearing both the sides we find the Ld.CIT(A) had not allowed any deduction u/s.80IA(4) amounting to ₹ 1,46,85,364/-. Therefore, this ground by the Revenue being infructuous is dismissed. ITA No.2573/PN/2012 (By Assessee) (A.Y. 2006-07) : 45. The Ld. Counsel for the assessee at the time of hearing did not press grounds of appeal No.3 and 3.1 for which the Ld. Departmental Representative has no objection. Accordingly, the above grounds are dismissed as not pressed . Ground of appeal No.5 being general in nature is dismissed. 46. Grounds of appeal No.1 to 2 by the assessee read as under : 1. The Ld.CIT(A) erred in confirming an addition of ₹ 61,14,953/- on account of undervaluation of WIP. 1.1 The learned CIT(A) failed to appreciate that as per the method of accounting followed by the assessee, the material purchased by the assessee was expensed out in the books by the assessee and hence, there was no reason to include the same in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us. 52. The Ld. Counsel for the assessee at the outset submitted that since no disallowance has been made u/s.80IA(4) in the assessment order passed u/s.153A, therefore, this issue of allowing deduction u/s.80IA(4) becomes academic. 53. The Ld. Departmental Representative on the other hand fairly conceded that since the AO has not made any disallowance in the order passed u/s.l53A, therefore, this issue becomes academic in nature. 54. After hearing both the sides we find the grounds raised by the assessee in the impugned appeal are identical to the grounds raised in ITA No.2571/PN/2012 for A.Y. 2004-05 and ITA No.2572/PN/2012 for A.Y. 2005-06. Since the AO has not made any disallowance u/s.153A, 21 therefore, the grounds become academic in nature. Accordingly, the grounds raised by the assessee on this issue are dismissed. ITA No.52/PN/2013 (By Revenue) (A.Y. 2006-07) : 55. Ground of appeal No.1 by the Revenue reads as under : 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the depreciation on windmill of ₹ 28,37,565/- and MEDA charges of ₹ 6,25,000/- holding that this issue is already been looked in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore added the amount of ₹ 6,25,000/- towards the total income of the assessee. 59. Before CIT(A) it was submitted that in the original assessment proceedings for A.Y. 2006-07 the AO allowed depreciation @80% on the entire cost of windmill which included expenses for civil work, foundation, erection and commissioning and testing. It was pointed out that during this year MEDA processing charges of ₹ 6,25,000/- was also allowed as revenue expenses as claimed. It was submitted that the addition should not have been made in the order passed u/s.143(3) r.w.s. 153A for the reason that the issue of depreciation on windmill for A.Y. 2006-07 was already concluded in the original assessment passed u/s.143(3) and no incriminating material/evidence in this respect was found during the course of search or during 153A proceedings. 60. In its alternate contention it was submitted that the windmill requires specific type of civil foundation and in the nature of general civil constructions. Relying on various decisions it was submitted that the foundation expenses of plant and machinery/windmill is part of cost of plant and machinery and windmill. It was accordingly argued that d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee on the other hand relying on the decision of Hon ble Bombay High Court in the case of All Cargo Global Logistics Ltd./Continental Warehousing Corporation (Supra) submitted that since no incriminating material was found either during the course of search or unearthed during the course of 153A proceedings and since the disallowance made by the AO was on the basis of material already available on record and since in the original assessment proceedings the AO has already allowed depreciation @80%, therefore, the order of the CIT(A) being in accordance with law should be upheld. 65. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We find the AO in the order passed u/s.143(3) on 25-04- 2007, a copy of which is placed at pages 42 to 45 of the paper book, has not made any disallowance on account of depreciation on windmill. The AO has accepted the rate of depreciation as claimed by the assessee and MEDA charges was allowed as business expenditure. No incriminating material whatsoever was found during the course of search or 153A proceedings. The Hon ble jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected the contention of the assessee on the ground that the assessee has shown the value at ₹ 15 lakhs in books of account which includes the cost of ₹ 13,29,100/- being paid to Sajjan Realties Ltd. for easy access and keeping the area vacant of surrounding land and ₹ 50,900/- was spent on stamp duty. He accordingly held that the contention of the assessee is not correct and hence not acceptable. Rejecting the various explanations given by the assessee the AO made addition of ₹ 2,64,000/- during A.Y. 2006-07 and ₹ 4,91,000/- during A.Y. 2007-08, the details of which are as under : Asst. Year Valuation done by DVO (excluding cost incurred for land work) Value disclosed by the appellant Difference added total income 2006-07 3,84,000/- 1,20,000/- 2,64,000/- 2007-08 6,71,000/- 1,80,000/- 4,91,000/- 69. Before CIT(A) the assessee submitted that the issue of land cost, windmill investments etc., was dealt with by the AO in the origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. Admittedly, in the instant case the AO has made addition u/s.69B on the basis of the valuation report obtained from the DVO. No incriminating material whatsoever was found during the course of search or 153A proceedings. The Hon ble Delhi High Court in the case of Puneet Sabharwal (Supra) has held that addition to income based solely on the report of the DVO is not valid in absence of any evidence of understatement of consideration. In this view of the matter and in view of the detailed reasoning given by the CIT(A) we find no infirmity in his order on this issue. Accordingly, the same is upheld and the ground raised by the Revenue is dismissed. 73. Grounds of appeal No.3 by the Revenue reads as under : 3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction u/s.80IA of ₹ 1,55,18,839/-. 74. After hearing both sides, we find the Ld.CIT(A) has not allowed any deduction u/s.80IA(4) amounting to ₹ 1,55,18,839/-. Therefore, this ground by the Revenue being infructuous is dismissed. 75. Grounds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any and its J.V. Partner have declared additional income for A.Yrs. 2009-10 and 2010-11 when the actual unexplained expenses relate to A.Yrs. 2007-08, 2008-09 and 2009-10. 79. The AO noted that it is the claim of the assessee company and its J.V. Partner that the unexplained payments mentioned in the documents seized from Shri D.A. Bhat, technical director of the assessee company are only projected payments and not payments actually been made. Therefore, according to the AO, the only dispute in respect of unexplained payments related to Ghodzhari project is the year of taxation and nature of payments. The AO analysed the year wise break up of speed money paid by the assessee company and its J.V. Partner, B.T. Patil and sons in respect of Ghodzhari project as per the documents seized from Shri D.A. Bhat which is given at pages 4 to 17 of the assessment order. He also referred to the statement recorded u/s.132(4) of the I.T. Act from Shri D.A. Bhat on 24-09-2009 and noted the following conclusions as per para 7.7 of the assessment order : (i) Shri D.A. Bhat is a trusted and loyal employee of assessee company working for nearly 2 decades. (ii) He is involved in the project ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 72,34,350/- as additional income for the A.Y. 2007-08. Assessee disclosed additional income of ₹ 25 lakhs towards unexplained expenses related to projects other than Ghodzhari project. 82. The AO further noted that on the date of search statement u/s.132(4) was recorded from Shri R.D. Shinde, at his residence and evidences of payment of speed money were confronted to him. He admitted categorically that speed money payments were made. He also referred to the statement u/s.132(4) recorded from Shri Ajit R. Gurjar, Project Manager of the asssessee company and Mr. B.T. Patil, Accountant of the assessee at the office premises of the assessee. When the evidences related to speed money found at office premises were placed before them both of them admitted that speed money payments were made. 83. The AO held from the evidences found at the residence of Managing Director Shri R.D. Shinde, office of the assessee company and residence of Shri D.A. Bhat, Technical Director of the assessee that these evidences prove that speed money payments for getting the contract awarded and to get the payments released is part of standard operating system. The AO further noted that Bundl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is statement u/s.132(4) of the I.T. Act by filing a letter dated 11-10-2009. Shri D.A. Bhat is only a technical man and is not acquainted with financial matters. The unexplained expenses seized from residence of Shri D.A. Bhat related only to projected expenses and not actually paid. Further, Shri R.D. Shinde in his statement recorded on 12-10-2009 in reply to Question No.23 had stated that as on the date of search the joint venture has received ₹ 98 crorees only in respect of Ghodzhari project and therefore payment of ₹ 43 crores is highly unreasonable. 87. However, the AO was not satisfied with the explanation given by the assessee. He observed that the Mahalaxmi-B.T. Patil, J.V. is formed for the purpose of Ghodzhari project and Koyna projects. During the course of search loose papers 1 to 40 (Bundle No.1) was found at the residence of Shri D.A. Bhat who is technical director of the company. The loose papers depicted date wise details of various unexplained business expenditure of Ghodzhari project of ₹ 43.8364 crores. Since assessee s share in such expenses is 50%, managing director of the assessee company Shri R.D. Shinde admitted the additional income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would distort the whole purpose of the provisions. According to the AO in order to allow a withdrawal or a retraction of the same conclusively, there must be mitigating circumstances making out a case for such retraction, a fact which is completely absent in the facts and circumstances of the present case. To allow retraction without any cogent material would amount to making a mockery and travesty of the search and seizure operations. The assessee having estopped the Revenue by the admission cannot be allowed to go back on its promise held out by him. Relying on various decisions and holding that statement u/s.132(4) carries strong evidentiary value and observing that the statement of Shri D.A. Bhat is corroborated by independent evidences the AO made addition of ₹ 275.175/- to the total income of the assessee. While doing so, the AO made the following observation which is reproduced hereunder : 11.19. Moreover, statement of Shri D.A.Bhat is corroborated by independent evidences. Comprehensive evidences depicting amount of payment, date of payment of speed money, details of payer and recipient are available in the seized documents. Shri D.A.Bhat was maintaining the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y return of money taken from government. Therefore, this contention of the assessee is not acceptable. In any case, there are clear evidences proving the fact that ₹ 4383.64 Lakhs of speed money has been actually paid by assessee as on 4/2/2009. In the light of the aforesaid facts, the contention of the assessee is hereby rejected. 11.22. To conclude, there are irrefutable evidences to prove that the speed money payments have actually been made on the respective dates and by no stretch of imagination they are projected expenses. The evidentiary value of documents which are in the handwriting of Shri D. A. Bhat, correctness of which was acknowledged by him u/s-132(4) cannot be underscored. 11.23. In the light of the foregoing discussion, unexplained expenses related to AY 2008-09 amounting to ₹ 1490.675 Lakhs is hereby brought to tax. It may be noted that assessee instead of disclosing ₹ 1490.675 Lakhs has disclosed Rs. Nil as additional income for AY 2008-09. Therefore, ₹ 1490.675 Lakhs is added for AY 2008-09. 90. Before CIT(A) the assessee reiterated the same submissions as made during assessment proceedings. The assessee stated that out of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so not satisfied with the explanation given by the assessee and upheld the addition made by the AO by observing as under : 56. I have given careful consideration to the contentions of the appellant with reference to the facts of the case. This is a case where Shri D.A. Bhat, Director in appellant company, has retracted from the statement given earlier on 24-09-2009 and Shri Ravindra D. Shinde, Managing Director/Promoter of the appellant firm has brushed aside the revelations made by Shri D.A. Bhat as also the documents pertaining to Ghodzhari project, executed by the appellant firm in joint venture with B.T. Patil Sons (Belgaum) Construction Co. Ltd. retrieved from Shri D A Bhat's residence. As per the joint venture agreement dated 03/08/2007, Shri Navin B Patil (son of Shri B T Patil) and Shri D A Bhat were nominated to be the authorized representative of Joint Venture. Shri D A Bhat representing Mahalaxmi Construction Corporation Ltd. and Shri Navin Bhat was on board on behalf of B T Patil and Sons were witnesses to the joint venture agreement. These facts lead to an irrefutable conclusion that Shri D A Bhat was a close confidante of Shri Ravindra D Shinde and not merel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, what is of relevance is the fact that it is not the case of Shri D. A. Bhat that the statements were untrue, or involuntary; or were made under undue influence, pressure or coercion. 60. Logically the burden to prove the admission as ineffective is on the maker. Thus, on the failure of the maker to prove that earlier stated facts were wrong, his earlier statements are sufficient to conclude a matter. At this juncture, it must be noted that the statement to bind the maker must be voluntary and only if it appears to have been obtained by coercion, inducement or threat it must be rejected. On retraction, earlier stated facts or admissions, lose their effect as a binding evidence and it may not be permissible for the income-tax authority to conclude a matter on the basis of earlier statement alone. At the same time, bald retractions of earlier admissions will not be enough and even after retraction such statements cannot automatically become nullities. Merely because a statement is retracted, it cannot become as involuntary or unlawfully obtained. For any retraction to be successful in the eyes of law the maker has to show as to how earlier recorded statements do not state the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier and giving substituted facts in support of retraction. Total denial of what has been stated in the previous statement cannot be said to be effective and it shall at best be deemed merely as a plea of denial which may not be of much help. 62. The important aspect of the matter is that during the course of search Shri D. R. Bhat came with an explanation that amounts written in the papers and documents discovered from him were in the nature of speed money or gratuitous payments made for the purpose of acquiring the contract for Ghodzhari project by the Joint venture between the appellant and B. T. Patil and Sons (Belgaum) Ltd. The explanation proffered had two limbs viz. one pertaining to the nature of expense recorded and the other pertaining to the period in which the expense was incurred. In respect of the nature of entries, Shri Ravindra D. Shinde, Managing Director of the assessee company, did not accept that the recordings made by Shri Bhat indicated instances of payment of speed money. What he admitted in the statement made under section 132(4) on 12/10/2009 was that the amounts in question reflected the income of the appellant generated by inflating the expenses of Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in the project since inception in more ways than just being responsible for technical matter. The fact that he used to maintain the account of unaccounted payments and was the appellant company's main interface with the joint venture partner B T Patil and Sons is apparent from the fact that B T Patil and Sons used to send the financial reconciliation statement to Shri Bhat on regular basis. The assessing officer has elaborately discussed the issue between pages no. 3 to 43 of the assessment order for the assessment year 2007-08. This aspect of assessment is repeated in assessment years 2008-09, 2009-10 and 2010-11. The assessing officer has also made the seized documents a part of the assessment order in these pages. The evidences indicate that certain amounts were paid to various persons on specific dates. In all the papers, the word 'paid' is very conspicuous. The seized material also refers to the persons who have made the payment i.e. either B T Patil and Sons or Mahalaxmi Construction Corporation Ltd. as the appellant company was known its earlier avatar. Page no. 39 mentions various dates on which payments were made and the amounts paid on these dates. Page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed expenses in the assessment years 2007-08, 2008-09 and 2009-10. 64. Consequently, the protective additions made of ₹ 3.20 crores in assessment years 2009-10 and ₹ 10.55 crores in 2010-11 stands deleted. 94. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 95. The Ld. Counsel for the assessee strongly challenged the order of the CIT(A). He submitted that the notings on the loose papers are not about the payments actually made but these are projected expenses yet to be incurred before the search. He referred to the papers found with B.T. Patil and sons during the search at their place placed at pages 238 to 246 of the paper book and submitted that these papers do not indicate the dates as noted on the papers found with the assessee. He accordingly submitted that these papers indicate the projected expenses and not the expenses actually incurred. The Ld. Counsel for the assessee submitted that these papers nowhere state that the payments were made as speed money. He submitted that even u/s.132(4A) the notings cannot be presumed to be reflecting in the speed money paid for awarding of contracts for passing the bills. Therefore, to cat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of ₹ 2,00,17,500/- made by the AO in A.Y. 2007-08 on the basis of the loose papers is not justified and therefore the same should be deleted. 96. The Ld. Departmental Representative on the other hand heavily relied on the order of the AO and CIT(A). She submitted that evidences regarding the speed money is based on statement of 4 important functionaries viz., Shri D.A. Bhat, Technical Director of the assessee company, Shri R.D. Shinde, Managing Director of the assessee company, Shri A.R. Gurjar, Project Manager of the assessee company and Shri B.T. Patil, Accountant of the assessee. Further, faxes, papers and reconciled documents of speed money maintained in the books were also found during the course of search. Analysis of SMSs received by Shri D.A. Bhat who kept accounts for the speed money paid by the company also gives evidence regarding payment of speed money. She submitted that the contention of the Ld. Counsel for the assessee that such payments have to be related to RA bills is baseless. It is very clear that the payments were first made for initiating the project and getting various approvals. The destination and timing of such payments makes it abundantly cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not indicate any payment of speed money and therefore the revenue authorities are not justified in holding that the payment noted on the seized papers reflect speed money paid by the assessee company especially when Mr. Bhat had retracted his statement immediately at the earliest opportunity. We do not find any substance in the above arguments of the Ld. Counsel for the assessee. The AO has made addition not only on the basis of the papers seized from the premises of Shri D.A. Bhat, but also on the basis of statements recorded from responsible persons of the assessee company namely Mr. D.A. Bhat, Technical Director, Shri R.D. Shinde, Managing Director, Mr. Gurjar, Project Manager and Mr. B.T. Patil, the Accountant of the company. Therefore, the contention of the Ld. Counsel for the assessee that the notings indicate projected expenses is not correct. However, we also find that the notings equally did not clearly indicate the nature of the expenses noted. Nowhere on the seized papers there is any evidence that the expenditure noted on said papers indicate payment of speed money/bribe. No corroborative evidence is brought on record by the lower authorities to support the case that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure. Since assessee is doing Government contracts it cannot suppress the receipts. First method is when an expenditure is debited in the books, the payment is made through cash from out of unaccounted income. However the liability is continued till such time, the cash book has sufficient cash balance. Whenever there is sufficient cash balance, the payment is shown in the books and liability is liquidated. The labour charges are shown as payable for a long time, sometimes years together. According to the AO since the labours are poor and they lead hand to mouth existence it is unlikely that they wait for such a long time for the payment to be received. In view of the detailed discussion by the AO at para 17.2 of the order the AO rejected the credits outstanding for more than 3 years at ₹ 6,02,856/- for the impugned year and made addition u/s.41(1) of the I.T. Act. Similar addition of ₹ 70,57,702/- was made by the AO for A.Y. 2010-11. 100. In appeal the Ld.CIT(A) following the decision of Hon ble Supreme Court in the case of T.V. Sundaram Iyenger (TV) and sons Ltd. reported in 222 ITR 344 upheld the addition made by the AO by observing as under : 42. I hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other party continues. However, it is also a fact that the situation would be different if it is shown that the creditors have abandoned their right to recover the debt from the debtor. This implies that the action of the creditor which is an expression of the intention not to pursue recoveries can be sufficient to hold that there is a cessation of liability. That the creditor has abandoned his right to enforce recovery would become stronger with a flux of time if no action is taken. Under these circumstances, there is no requirement of an unequivocal declaration on the part of the creditor that he does not wish to pursue recovery or an acknowledgement of this intention by the assessee by way of recording the same in his books of account. In fact, in this case, all that is relevant is that the money should have been received or the debt would have become due by the assessee during the normal trading operations. This would be a case where the decision in the case of CIT v. T. V. Sundaram Iyengar (T. V.) Sons Ltd. [1996J 88 TAXMAN 429 (SC) [1996J 222 ITR 344 (SC) will be applicable. The decision- 22. The principle laid down by Atkinson, J., applies in full force to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs were outstanding for a period of 3 years or more it does not mean that in the hands of the assessee the liability has ceased. Referring to the decision of the Hon ble Supreme Court in the case of Sugauli Sugar works reported in 236 ITR 518 he submitted that there is no reason to hold that the liability has ceased in the hands of the assessee and such amounts of old creditors constitute the income u/s.41(1). He also relied on the decision of the Pune Bench of the Tribunal in the case of Hrishikesh L. Joshi vide ITA No.702/PN/2007 wherein it has been held that simply because the liability is unpaid for a period of more than 3 years it cannot be taxed as cessation of liability u/s.41(1). 103. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). She submitted that the Ld.CIT(A) following the decision of Hon ble Supreme Court in the case of T.V. Sundaram Iyenger (TV) and Sons Ltd. (Supra) has passed a detailed order giving reasons for sustaining the addition made by the AO u/s.41(1). She accordingly submitted that the order of the CIT(A) be upheld. 104. We have considered the rival arguments made by both the sides, perused the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer found that an amount of ₹ 1,29,.000 was with reference to the deposits and advances which had been paid back and he included a sum of ₹ 2,56,529 under Section 41 of the Income Tax Act in the total income of the assessee. The assessee went on appeal before the Appellate Assistant Commissioner and the order of the I.T.O. was confirmed. The assessee carried the matter to the Tribunal. The Tribunal accepted the contention of the assessee and held that its unilateral entry in the accounts transferring the amount to the capital reserve account would not bring the matter within the scope of Section 41 of the Income Tax Act and consequently held in favour of the assessee. The decision of the Tribunal was challenged before the High Court. The High Court observed : The transfer of an entry is a unilateral act of the assessee, who is a debtor to its employees. We fail to see how a debtor, by his own unilateral act, can bring about the cessation or remission of his liability. Revision has to be granted by the creditor. It is not in dispute and it indeed cannot be disputed that it is not a case of remission of liability. Similarly a unilateral act on the part of the debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining by the assessee of a benefit by virtue of remission or cessation is sine qua non for the application of this Section. The mere fact that the assess has made an entry of transfer in his accounts unilaterally will not enable the Depart-ment to say that Section 41 would apply and the amount should be included in the total income of the assessee. The reasoning of the High Court is correct and we are in agreement with the same. 4. Learned counsel for the appellant draws our attention to the judgment of the Calcutta High Court in Commissioner of Income Tax v. General Industrial Society Ltd., (1994) 207 ITR 169. The Division Bench of the Calcutta High Court has taken care to set out the two important factors in that case which weighed with them to come to the particular conclusion. The Bench said : It appears from the assessment order that there is one peculiar aspect in the present case. It is the practice of the assessee to write back such unclaimed and unspent liabilities from year to year on grounds of bar limitation of the liability and to get away without paying tax on such amount written back to profit on the same plea. This has been happening since the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability when called upon to meet either by the employees under the Industrial Disputes Act or by the Government under the Bombay Welfare Fund Act on account of the special provisions of those Acts. We are unable to accept the reasoning of the Bombay High Court in that case. Just because an assessee makes an entry in his books of accounts unilaterally, he cannot get rid of his liability. The question whether the liability is actually barred by limitation is not a matter which can be decided by considering the assessee's case alone but it is a matter which has to be decided only if the creditor is before the concerned authority. In the absence of the creditor, it is not possible for the authority to come to a conclusion that the debt is barred and has become unenforceable. There may be circumstances which may enable the creditor to come with a proceeding for enforcement of the debt even after expiry of the normal period of limitation as provided in theLimitation Act. 7. One aspect of the matter has been completely ignored by the judgment of the Division Bench of the Bombay High Court. As pointed out already, the crucial words in the Section require that the assessee has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act of the assessee, who is a debtor to its employees. We fail to see how a debtor, by his own unilateral act, can bring about the cessation or remission of his liability. Remission has to be granted by the creditor. It is not in dispute, and it indeed cannot be disputed, that it is not a case or remission of liability. Similarly, a unilateral act on the part of the debtor cannot bring about a cessation of his liability. The cessation of the liability may occur either by reason of the opera-tion of law, i.e., on the liability becoming unenforceable at law by the creditor and the debtor declaring unequivocally his intention not to honour his liability when payment is demanded by the creditor, or a contract between the parties or by discharge of the debt - the debtor making payment thereof to his creditor. Transfer of an entry is neither an agreement between the parties nor payment of the liability....... (at page 41) 9. This judgment has been quoted by the High Court in the present case and followed. We have no hesitation to say that the reasoning is correct and we agree with the same. 10. The principle that expiry of period of limitation prescribed under the Limitation Act c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue are dismissed. 106. Following the above decisions cited (Supra) we hold that the Ld.CIT(A) is not justified in sustaining the addition of ₹ 6,02,856/- made by the AO u/s.41(1) of the I.T. Act. We accordingly set aside the order of the CIT(A) on this issue and the ground raised by the assessee is allowed. 107. In ground of appeal No.4 and 5 the assessee has challenged the order of the CIT(A) in directing the AO to apportion the cost of power evacuation facility and miscellaneous expenses between building/road and windmill in the ratio of 60:40. 108. After hearing both the sides we find this ground by the assessee is correlated with the ground raised by the Revenue in ground of appeal No.3. The Ld. Counsel for the assessee could not justify how the order of CIT(A) on this is erroneous or wrong. While deciding the ground raised by the Revenue, we have upheld the order of the CIT(A) and the ground raised by the Revenue has been dismissed. Since the order of the CIT(A) is in consonance with the decision of the Tribunal, therefore, the ground raised by the assessee is dismissed. 109. The assessee has also filed an additional ground which reads as under : The app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sec. 80IA(4) of ₹ 21,93,856/- which is the additional income declared during the course of search proceedings, on account of expenses from unexplained sources which attract provision of S. 69C of the Income Tax Act which is not an income from the business of undertaking referred to in sec. 80IA(4). 115. Facts of the case, in brief, are that the AO during the course of assessment proceedings noted that the assessee in the return of income has claimed deduction u/s.80IA of the Act amounting to ₹ 7,88,92,588/-. During the assessment proceedings the AO asked the assessee as to why the deduction u/s.80IA(4) should not be disallowed. In response to the same, the assessee vide his Explanation dated 11-11-2010 submitted as under which has been reproduced by the AO in the body of the assessment order and which reads as under : The company has claimed the deduction in respect of Infrastructure project u/ s.80-IA(4) of the I.T. Act. The yearwise details are as under; F.Y. A.Y. Amount Pending before 2002-03 2003-04 1,52,76,714 ITAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.80IA(4) in respect of additional income 2007-08 21,93,856 2008-09 67,33,791 2009-10 8,31,99,954 2010-11 15,27,87,220 The above deduction in respect of claim u/s. 80IA(4) in respect of additional income declared during search be allowed. 116. However, the AO was not satisfied with the explanation given by the assessee. He noted that the assessee is a contractor and in view of Explanation 2 to section 80IA of the I.T. Act, 1961 the assessee is not entitled to deduction u/s.80IA(4). Further, the Tribunal in assessee s own case in the preceding years has already rejected such claim. The AO accordingly rejected the claim of deduction u/s.80IA(4) of the I.T. Act for this year and other years as claimed by the assessee. 117. Before CIT(A) it was submitted that for the A.Y. 2003-04 the AO had disallowed claim of deduction u/s.80IA(4) which was upheld by the Tribunal. The assessee challenged the matter before the Hon ble High Court. The Hon ble High Court had set aside this issue to the file of the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has claimed deduction u/ s 80IA(4) In respect of various contracts awarded by the Government for development of infrastructure facilities of related to water supply irrigation facilities. Relevant provisions of the law for claim of exemption u/s. 80IA(4), which was amended by the Finance Act, 2002 and applicable w.e.f. 1.4.2002 i.e. assessment year 2002-03 reads as under: Deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. 80-IA. (1) 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. . . . (4) This section applies to - (1) Any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person (including the Central or State Government) and executed by the undertaking or enterprise referred to in sub-section (1).] Prior to its substitution, Explanation, as inserted by the Finance Act, 2007, w.r.e.f. 1-4-2000, read as under: Explanation.-For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a person who executes a works contract entered into with the undertaking or enterprise, as the case may be. 93. As per the amended law w.e.f. assessment year 2002-03, development of infrastructure facility is sufficient for claim of deduction u/s 80IA(4). In the instant case conditions stipulated in sub clause (a) of sub-section (4)(i) with regard to the enterprise being owned by the company registered in India is duly fulfilled. The condition stipulated in sub-clause (b) requiring that the assessee company to enter into agreement with the Central or State Government for development of new infrastructure facility is also fulfilled. The condition stipulated under sub-clause (c), which required that the assessee has started operating and maintaining infrastructure facility on or after 1st day of April, 1995, does not appear to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the Finance Act, 2007, w.r.e.f. 1-4-2000 below sub-section 13 of section 80IA and subsequently substituted by the Finance (No.2) Act, 2009, w.r.e.f. 1-4-2000 clarifies that deduction under section 80IA(4) will not be available to a works contractor. The rationale behind insertion of the Explanation was explained in Circular No. 3/2008 dated 12-03-2008 as- 34. Clarification regarding developer with reference to infrastructure facility, industrial park, etc. for the purposes of section 80-IA 34.1 Section 80-IA provides for a ten-year tax benefit to an enterprise or an undertaking engaged m development or operation and maintenance or development, operation and maintenance of infrastructure facilities, providing telecommunication service, generation or generation and distribution of power or development of an Industrial Parks or a Special Economic Zones. 34.2 The tax benefit was introduced for the reason that industrial modernization requires a massive expansion of, and qualitative improvement in, infrastructure (viz., expressways, highways, airports, ports and rapid urban rail transport systems) which was lacking in our country. The purpose of the tax benefit has all a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of operating and maintaining the infrastructural facilities. In the opinion of the Hon 'ble Tribunal, the answer to these question were provided by the judgment of the Bombay High Court in the case of ABG Heavy Engg. Ltd (supra). It was held- 6. The above judgment of the Hon'ble High Court is delivered in the case of ABG Heavy Engg. Ltd (supra), who is a contractor for the JNP Trust and that contactor, assessee is found to be an eligible developer for making claim of deduction u/s. section 80IA(4) of the Act. From the above, it is evident that the person who only develops the infrastructure do not have the occasion to operate and maintain the infrastructure. It is further evident that the harmonious reading is necessary and mandatory in view of High Court's judgment in the case of an enterprise carrying on business or developing which is the case of the assessee, all the conditions referred to clause (i) of section 80IA(4) should refer to the conditions as applicable to the developer. In other words, the developer who is only developing the infrastructure facilities since he does not operate and maintain Infrastructural facilities, cannot be expected to fulfil th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement with Maharashtra Government/ APSEB, therefore, 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). 99. The Mumbai Bench of the ITAT in the case of Asstt. CIT v. Bharat Udyog Ltd. [2009] 118 ITD 336 has held that an assessee engaged in development of infrastructure but not in maintaining and operating the same would be eligible for deduction under section 80IA(4) though he is described as a contractor and was paid by the Government. 100. It is held in the case of Metal Infra Projects Ltd. v. CIT [2009] 26 DTR 359 (JP) (Trib.) that simply because the agreement mentioned the assessee as contractor, he would not cease to be the developer. 101. The effect of Explanation introduced by the Finance Act, 2007 whereby any assessee who entered into a contract with the enterprise mentioned in Sub-Section (4) would not be eligible for deduction and its subsequent substitution with retrospective effect from 01-04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to develop infrastructure whether it involves construction of a particular item as agreed to in the agreement or not. The agreement is not for a specific work, it is for development of facility as a whole. The assessee is not entrusted with any specific work to be done by the assessee. The material required is to be brought in by the assessee by sticking to the quality and quantity irrespective of the cost of such material. The Government does not provide any material to the assessee. It provides the works in packages and not as a works contract. The assessee utilizes its funds, its expertise, its employees and takes the responsibility of developing the infrastructure facility. The losses suffered either by the Govt. or the people in the process of such development would be that of the assessee. The assessee hands over the developed infrastructure facility to the Government on completion of the development. Thereafter, the assessee has to undertake maintenance of the said infrastructure for a period of 12 to 48 months. During this period, if any damages are occurred it shall be the responsibility of the assessee. Further, during this period, the entire infrastructure shall have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by giving tax benefits. Thus the provisions of section 80IA shall not apply to a person who executes a works contract entered into with the undertaking or enterprise referred to in the section but where a person makes the investment and himself executes the development work, he carries out the civil construction work, he will be eligible for the tax benefit under section 80IA. 103. The ITAT Chennai has arrived at identical conclusion in the case of East Coast Constructions Industries Ltd v. DCIT in ITA No. 554/ Mds/201 0 dated 13-09-2011. It was held- When an assessee is only developing an infrastructure facility project and is not maintaining nor operating it, obviously such an assessee will be paid for the cost incurred by it; otherwise, how will the person, who develops the infrastructure facility project, realize its cost? If the infrastructure facility, just after its development, is transferred to the Government, naturally the cost would be paid by the Government. Therefore, merely because the transferee had paid for the development of infrastructure facility carried out by the assessee, it cannot be said that the assessee did not develop the infrastructure facility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after Explanation added in section 80IA(4) by Finance Act, 2007 and amended by Finance Act, 2009 with retrospective effect from 1.4.2000. Accordingly we allow this ground of the assessee and direct the department to allow the deduction claimed under section 80IA(4) to the assessee. 105. There is a contra decision in case of Indian Hume Pipe Co. Ltd., v.Dy. CIT in ITA No. 5172/Mum/2008, dated 29-7-2011 for assessment year 2004-05 pronounced after the Pune Bench decision in the case of Laxmi Civil Engg. (P.) Ltd. (supra)which considers the Tribunal decision of B. T. Patil Sons Belgaum Construction (P.) Ltd. v. Asst. CIT [2010] 35 SOT 171 (Mum.) as well as the jurisdictional High Court decision in the case of ABG Heavy Industries (supra) and goes on to hold that the assessee is not entitled to the deduction under section 80IA(4) in view of the Explanation introduced with retrospective effect. 106. Finally there is the decision of the Jurisdictional Tribunal in appellant's own case where the effect of insertion of Explanation with retrospective effect from 01-04-2000 by the Finance Act, 2009 was taken cognizance of while holding that the appellant is entitled for deduction un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue is that under cl. (iii) of sub-sec. (4A) of sec. 80-IA, one of the conditions imposed was that the enterprise must start operating and maintaining the infrastructure facility on or after Ist April, 1995. The same requirement is embodies in sub-d. (c) of sub-sec. (4) of the amended provisions of sec. 80IA. On this basis, it was urged that since the assessee was not operating and maintaining the facility, he did not fulfil the condition. This submission is fallacious both in fact and in law. As a matter of fact, the Tribunal has entered a finding that the assessee was operating the facility and this finding has been confirmed earlier in this judgment. That the assessee was maintaining the facility is not in dispute. The facility was commenced after lst April, 1995. Therefore, the requirement was met in fact. Moreover, as a matter of law, what the condition essentially means is that the infrastructure facility should have been operational after 1st April, 1995. After sec. 80-IA was amended by the Finance Act of 2001, the section applied to an enterprise carrying on the business of (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urposes of claim of deduction u/s 80-IA(4) of the Income Tax Act. As per the said decision of the Hon 'ble High Court assessee who only develops infrastructural facility (even as a contractor) but does not have an occasion to operate and maintain is also eligible for claim of deduction u/s 80-IA(4) of the Act. The Hon 'ble High Court has been pleased to observe that qua such person the condition stated in sub-section (c) of sec. 80-IA(4)(i) has to be read harmoniously with the main provision under which deduction is available to an assessee, who develops; or operates and maintain; or develops, maintains and operates an infrastructural facility. In other words a developer who only develops (i.e., constructs) an infrastructural facility is not envisaged to operate and maintain such facility, cannot be accepted to fulfil the condition in clause (c) of section 80-IA(4) since it would be an impossibility. Therefore, in view of the construction placed by the Hon'ble Bombay High Court on the requirements of clause (c) of sec. 80-IA(4)(i) requiring it to be harmoniously read with the main sec. 80-IA(4), we do not find substance in the objection raised by the Revenue. We thus re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tc., whether it be the case of 'BOT' or 'BOOT' and it is handed over by the Government/Authority to the developer for development of infrastructure facility/Project. So, deduction u/s. 80IA(4) is also available to this assessee which has undertaken work of a mere 'developer'. Rather, the statutory provision as contained in section 80IA which provides for deduction of infrastructure facility no way provides that entire infrastructure facility project has to be developed by one enterprise. Thus, as per section 80IA the assessee should develop the infrastructure facility as per the agreement with the Central/State Government/Local Authority. Entering into a lawful agreement and thereby becoming should, in no way be a bar to the one being a 'developer'. 108. It is a fact in this case that assessee has developed the infrastructure facility as per the agreement with the State Government. The assessee has demonstrated that it has undertaken risks in terms of deployment of technical personnel, plant and machinery, technical know-how, expertise and financial resources. Due to the fact that the contracts for various projects undertaken by the appellant invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) claimed and allowed accordingly is given below: Asst. Year Claim as per return Additional claim Remarks 2004-05 Rs.84,02,555/- Pending with High Courtnot abated 2005-06 Rs.1,46,85,364/- -do- 2006-07 Rs.1,55,18,839/- Pending with ITAT not abated 2007-08 Rs.7,88,92,588/- Rs.21,93,856/- Claimed and allowed 2008-09 Rs.24,03,21,259/- Rs.67,33,791/- -do- 2009-10 Rs.15,66,30,732/- Rs.8,31,99,954/- -do- 2010-11 Rs.24,45,32,117/- Rs.15,27,87,220/- -do- It should be noted that the claim of 80IA(4) deduction in respect of infrastructure development is made for various years including those in which the matter of allowabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comes also. Similarly, in the case of Medicor Laboratories Put. Ltd. ITA No. 402/ PN/ 2009, the Honourable Pune Tribunal has upheld the allowability of deduction under Chapter VI A in respect of all additions to the income made in assessment when there was no specific finding that income was required to be taxed under any head other than 'business income'. Hence, the additional claim is allowed. However, the assessing officer is directed to check the computation of the claim and then allow the same . 120. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 121. The Ld. Departmental Representative strongly opposed the order of the CIT(A). She submitted that the assessee is only a works contractor and not a developer as per Explanation below 80IA(13), therefore, deduction u/s.80IA(4) amounting to ₹ 7,88,92,588/- should not have been granted by the CIT(A). 122. As regards the allowance of deduction u/s.80IA(4) amounting to ₹ 21,93,856/- out of the additional income declared during the course of search proceedings is concerned the Ld. Departmental Representative submitted that the additional income so declared is on account of expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.153A. Referring to the decision in the case of B.G. Shirke Constructions Technology Pvt. Ltd. vide ITA No.727 to 730/PN/2012 order dated 31-10-2013, a copy of which is placed at pages 106 to 118 of the paper book, he submitted that the Tribunal has held that a fresh claim can be made in the assessment u/s.153A which has not abated and accordingly the assessee was justified in making the claim u/s.80IA(4) in the assessment proceedings u/s.153A. He submitted that it has already been clarified that the assessee had debited bogus bills to generate cash for meeting various expenses as per the seized papers. This was admitted right from the search and it is accepted by the AO in the assessment. The bogus bills debited for generating cash are to be disallowed and thus this results in increase in income from business of the assessee. Thus the addition is made by the AO not u/s.69C as wrongly stated by the department in the grounds of appeal. As the business income is increased in the assessment the deduction u/s.80IA(4) has to be increased correspondingly. For the above proposition the Ld. Counsel for the assessee relied on the decision of Hon ble Bombay High Court in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,92,588/-. During the course of assessment proceedings apart from reiterating the deduction u/s.80IA(4) as claimed in the original return the assessee also claimed deduction u/s.80IA(4) in respect of additional income so declared. We find the AO rejected the claim of deduction u/s.80IA(4) on the ground that the asessee is a contractor and in view of Explanation to section 80IA(4) the assessee is not entitled to deduction u/s.80IA(4), We find the Ld.CIT(A) allowed the claim of the assessee by relying on various decisions on the deduction claimed u/s.80IA(4) in the return as well as on the additional income declared. 128. We do not find any infirmity in the order of the CIT(A) in allowing the claim of deduction u/s.80IA(4) as per the return as well as the deduction on the additional income. So far as the claim of deduction u/s.80IA(4) considering the irrigation project of the assessee as an infra project is concerned we find the issue has already been decided in favour of the assessee in assessee s own case for A.Y. 2003-04 vide ITA No.433/PN/2007 order dated 06-02-2012. The relevant observation of the Tribunal from Para 7 to 9 reads as under : 7. We find that the Hon ble Jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of 2001, the section applied to an enterprise carrying on the business of (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining any infrastructure facility which fulfils certain conditions. Those conditions are : (i) Ownership of the enterprise by a company registered in India or by a consortium; (ii) An agreement with the Central or State Government, local authority or statutory body; and (iii) The start of operation and maintenance of the infrastructure facility on or after 1st April, 1995. The requirement that the operation and maintenance of the infrastructure facility should commence after 1st April, 1995 has to be harmoniously construed with the main provision under which a deduction is available to an assessee who develops or operates and maintains, or develops, operates and maintains an infrastructure facility. Unless both the provisions are harmoniously construed, the object and intent underlying the amendment of the provision by the Finance Act of 2001 would be defeated. A harmonious reading of the provision in its entirety would lead to the conclusion that the deduction is available to an enterprise which (i) develops; or (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(i) requiring it to be harmoniously read with the main sec. 80-IA(4), we do not find substance in the objection raised by the Revenue. We thus respectfully following the decision of the Hon ble Bombay High Court on the issue in the case of CIT vs. ABG Heavy Industries Ltd Ors (supra) decide the matter in favour of the assessee with this finding that assessee is eligible to claim the deduction in question u/s 80-IA (4). The issue is thus decided in favour of the assessee. The related grounds are thus allowed with this direction to the AO to allow the claimed deduction to the assessee. 10. Consequently the appeal is allowed. 129. Therefore, the issue as to whether the assessee being a contractor and not a developer and therefore is not is entitled to deduction u/s.80IA(4) of the I.T. Act has to be decided in favour of the assessee. 130. Now coming to the claim of deduction u/s.80IA(4) on the additional income declared is concerned the question that arise is as to whether the assessee can make a new claim during the course of assessment proceedings u/s.153A. This issue also has been decided in favour of the assessee by the decision of the Tribunal in the case of D.J. Malp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Revenue also. 10. In the above undisputed fact situation, now we may examine the scope of assessments to be made u/s 153A(1)(b) of the Act for the assessment years 2007-08 and 2008-09, which have abated and for the assessment years 2003- 04 and 2006-07, which do not abate. Following the reasoning laid down in the case of All Cargo Global Logistics Ltd. (supra) , it has to be held that in so far as the assessment years 2003-04 and 2006-07 are concerned, assessments u/s 153A(1)(b) of the Act would be made on the basis of incriminating material, which has been explained to mean (i) books of account, other documents, found in the course of search but not produced in the course of original assessment; and, (ii) undisclosed income or property discovered in the course of search. Of course, the income so determined shall be in addition to the income already assessed in regular assessment proceedings for the said two assessment years. Now, the moot point is as to whether the impugned claim of the assessee for excluding income on account of retention money can fall in the scope and an ambit of an assessment made u/s 153A(1)(b) of theI.T Act for the assessment years 2003-04 and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of the fact that the Assessing Officer retains his original jurisdiction as well in the assessments for the years 2007-08 and 2008-09 to be made u/s 153A(1)(b) of the Act, in our considered opinion, as the following discussion would so, such a claim though made for the first time in the impugned assessment proceeding, would fall within the ambit and scope of impugned assessment carried out u/s 153A(1)(b) of the Act. Pertinently, the original jurisdiction vested with the Assessing Officer for the assessment years 2007-08 and 2008-09 empowers him to consider the impugned claim; and, to put it in other words, assessee was competent to raise such a fresh claim in the context of the original jurisdiction vested with the Assessing Officer, though it was not raised in the returns of income originally filed. 13. We may also consider this from another angle. As on the date of initiation of search i.e. 18-12-2008, the returns of income filed by assessee u/s 139(1) of the Act for assessment years 2007-08 and 2008-09 were pending for assessment and the impugned claimed was not made in the returns of income originally filed. So, however, u/s 139(5) of the Act, assessee was competent to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years and also filed copies of the agreements with the customers which contained the relevant clauses permitting retention of a portion of the contract value. It is pointed out that strictly speaking the judgement of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) is not applicable in the present case as no fresh claim was made in the assessment proceedings, but it is a case where a claim put-forth in the return of income was only quantified during assessment proceedings and thus the Assessing Officer ought to have entertained the impugned claim. Alternatively, it is contended that the CIT(A) enjoys plenary powers of the Assessing Officer, and following the judgment of the Hon'ble Supreme Court in the case of Jute Corporation of India Ltd. vs. CIT, (1991) 187 ITR 688, the claim should have been entertained by him as the complete facts were on record. In this context, the learned counsel referred to the decision of the Pune Bench of the Tribunal in the case of Jain Irrigation Systems Ltd. vide ITA No.1319/PN/2009 dated 30.01.2012 wherein the import of the judgment of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) has been expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue till the completion of defect liability period contained in the contract which is generally between 12 to 24 months after the completion of the construction. Inadvertently in the original return filed this amount was not excluded while computing the total income. In the short span of time allowed to us to file the return u/s. 153A, the exact quantification of the retention money could not be worked out. Hence we will submit the details thereof later. But for the time being, we submit that the retention money in the various contracts is not taxable in view of the various decisions including the decisions cited below wherein it is held that the taxability of this amount is to be considered in the year in which this amount is due to the assessee from the contractee. (a) CIT v Associated Cables P. Ltd. (2006) 286 ITR 596 (Bom.) (b) DCIT v Spirax Marshall Ltd. (2007) 109 TTJ (Pune) 593 (c) National Heavy Engg. Co. Op. Ltd. v DCIT (2007) 105 ITD 485 (Pune) Inadvertently, in the Original Return of Income this amount was not claimed as deduction. We request Your Honour to kindly grant us appropriate deduction while completing assessment. We shall submit the necessary detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) to have entertained the impugned claim especially when the required facts to adjudicate the controversy were already on record. 22. Thus, considered in the aforesaid light, we find no justification for the Revenue to reject assessee's impugned claim for assessment years 2007-08 and 2008-09 on the ground that the claim was made by way of a letter during the course of assessments and not in the return of income. 23. The third objection which has been raised by the Revenue is in terms of a discussion made by the CIT(A) in para 3.6 of the impugned order. According to the CIT(A), if the claim for excluding retention money was entertained and allowed, it would result in the determination of total income at a figure below the income originally returned/assessed and thus the same was not permissible. This objection of the Revenue, in our view is no bar to entertain the aforesaid claim, keeping in mind the ratio of the judgement of the Hon'ble Supreme Court in the case of CIT vs. Shelly Products Anr., (2003) 261 ITR 367 (SC) and also the judgement of the Hon'ble Gujarat High Court in the case of Gujarat Gas Co. Ltd. vs. CIT, 245 ITR 54 (Guj). 24. On the basis of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The decisions relied on by the Ld. Counsel for the assessee on this issue support the case of the assessee where it has been held that if the income goes up because of the addition made in the assessment, the deduction u/s.10A or Chapter VIA as the case may be, shall be granted on such enhanced income. 133. We find the Hon ble Bombay High Court in the case of Gem Plus Jewellery India Ltd. reported in 333 ITR 175 has observed as under ; 11. For the purposes of the appeal it is necessary to refer to the admitted position which is that the assessee had deposited both the employer's and the employees' contribution towards Provident Fund and ESIC, though beyond the due date including the grace period. The Assessing Officer added these payments to the total income of the assessee and made an addition in the amount of ₹ 71.59 lacs. However, for the deduction under Section 10A, the addition made on account of the employees' contribution was ignored in calculating the profits eligible for deduction on the ground that these receipts were not generated out of the manufacturing activity of the assessee company. 12. By reason of the judgment of the Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.3724/2010 order dated 27-07-2012 has held as under : 2. The appellant has formulated the following questions of law for consideration of this court. (1) Whether on the facts and circumstances of the case and in law the Tribunal was justified in holding that deductions u/s. 80IB (10) has to be allowed from the income computed as undisclosed income u/s. 69A of the Income Tax Act, 1961? (2) Whether on the facts and circumstances of the case and in law the Tribunal was justified in allowing the claim of deduction u/s. 80IB(10) where no such claim is made by the assessee in the return of income for the block period? 3. The appeal is admitted on Question (1) and (2). 4. At the instance of the Advocates for the appellant and the respondent the appeal is taken up for final disposal. 5. So far as Question (2) is concerned, it is an admitted position between the parties that the same stands covered in favour of the respondent-assessee and against the appellant revenue by virtue of the order of this court in CIT v. Pruthvi Brokers Shareholders (P.) Ltd. [2012] 23 taxmann.com 23. In the above case it has been held that a fresh claim could be urged before the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered to tax for block period under Chapter XIVB of the said Act in view of retrospective amendment to the explanation to sub section (1) of Section 158BB of the said Act. The Tribunal relied upon the decision of the Madras High Court in the matter of Anbu Textiles v. Asstt. CIT [2003] 262 ITR 684. 7. Mr. Vimal Gupta, counsel for the appellant submits that the order of the Tribunal is unsustainable as benefit of the deduction under Chapter VIA of the Act cannot be extended to an assessee who has not originally disclosed his income but seeks its benefit while filing a block return under Chapter XIV B of the said Act subsequent to the search under the said Act. In support of the above reliance was placed upon the decision of the Gujrat High Court in the matter of Fakir Mohmed Haji Hasan v. CIT [2001] 247 ITR 290. In the above case unexplained gold valued at ₹ 48.72 lacs found in possession of the party was added to the party s income under Section 69, 69A, 69B and 69C of the Act. As the unexplained gold was confiscated the assessee sought a deduction on account of confiscation of gold as a loss. The Court held that such undisclosed /unexplained amounts did not fall under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32;] It would be pertinent to note that the words this Act in parenthesis were substituted by the Finance Act of 2002 with retrospective effect from 1/7/1975. Prior to the above amendment the words were Chapter IV . Further the proviso was also added to the explanation by the Finance Act 2002. 10. Chapter XIVB of the said Act provides for special procedure for assessment of search cases and is contained in Section 158B to Section 158BI of the said Act. Further, this chapter applies only in cases of search initiated before 31/5/2003.In this case, the search took place in 2002 and therefore, the present case is governed by Chapter XIVB of the said Act. Section 158BB of Chapter XIVB of the Act deals with computation of undisclosed income of the block period. The above explanation to sub section (1) of Section 158BB of the Act was amended by the Finance Act, 2002 with retrospective effect from 1/7/1995. Prior to the amendment, according to the explanation the total income or loss was to be computed in accordance with Chapter IV of the said Act. Consequent to the amendment by Finance Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be faulted. Therefore, question (1) above is answered in the affirmative in favour of the respondent-assessee and against the appellant-revenue. Question (2) is answered in the affirmative in favour of the respondent-assessee and against the appellant-revenue. 135. We find the Pune Bench of the Tribunal following the above 2 decisions in the case of Malpani Estates (Supra) has held as under : 17. In-fact, the Hon ble Bombay High Court in the case of Sheth Developers (P) Ltd. (supra) was considering the claim of deduction u/s 80IB(10) of the Act in relation to the undisclosed income declared consequent to the search action. In the case before the Hon ble High Court, it was factually emerging that undisclosed income was earned by the assessee in the course of carrying on his business activity of a builder and the same was accepted by the Department, but the claim of the deduction u/s 80IB(10) was denied in relation to such income. However, the claim was upheld by the Hon ble Bombay High Court. In the present case, factually, there is no material to negate the assertion of the assessee, which are borne out of the material on record, that the additional income in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the company has erected windmills. From the various details furnished by the assessee such as details of erection, civil work for it, labour charges for erection and installation etc. the AO noted that the assesee has claimed depreciation on entire expenditure on account of purchase and its installation. According to the AO higher rate of depreciation is allowable only on windmills whereas the assessee has claimed depreciation at higher rate on each and every rupee incurred towards windmill including civil construction and other expenses to erect windmill. He, therefore, asked the assessee to substantiate the claim of higher depreciation on such assets. The assessee submitted that there is no civil work for windmill and the civil work is for foundation upon which the windmill stands, therefore, such foundation cannot be separated from the windmill and depreciation is allowable in full. 139. However, the AO was not satisfied with the explanation given by the assessee. Relying on the decision of the Pune Bench of the Tribunal in the case of Poonawalla Finvest Agro (P) Ltd. reported in 118 TTJ 68 disallowed cost of depreciation on ₹ 29,23,912/-. Similarly ₹ 15,92,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) Installation of electrical line for power transmission and meter c) Final testing and commissioning 6. Reimbursement of power evacuation facility and creation of infrastructure 7. Miscellaneous a) Processing charges b) Interest of loan capitalized upto 17/01/2008 c) Professional fees d) Registration fees e) Substation charges f) Franking charges g) MEDA or equivalent charges above table. The appellant is directed to provide the cost attributable to these items for the purpose of allocation. In case the appellant is unable to provide these details in respect of supply of windmill by Enercon, the assessing officer will apply the same ratio as these items bear to total cost of a Suzlon windmill. The appeal on this ground is partia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in giving relief of ₹ 75,00,000/- to the assessee on account of addition of expenses made by cheque. 148. Facts of the case, in brief, are that the assessee during the course of appeal proceedings before the CIT(A) stated that there are instances of double addition in as much as certain payments made by cheques have been included again in the Bhat documents to arrive at figure of ₹ 43.8364 crores. It was argued that amounts paid by cheque by Mahalaxmi Construction Corporation Ltd. ₹ 2.50 crores. B.T. patil and sons ₹ 1.50 crores and A.B. ₹ 2 crores which have been recorded against respective parties in the regular books of accounts has been inadvertently included in disclosure. If these amounts are excluded then the disclosure would be only ₹ 37.8364 crores. It was pointed out that it had paid an amount of ₹ 1.50 crores to Goofy Graphics on 28-07-2006 and further amount of ₹ 50 lakhs each on 16-07-2007 and 21-07-2007. These amounts are considered in the Bhat documents as pre tender amounts. Subsequently repayments were made by cheque on 30-01-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2008 against the entry of 30/01/2008 and paid 10000 against entry of 29/04/2008. Pages no. 18 and 38 has entries paid to Kale of ₹ 2 cores on 05/03/2008 and ₹ 1 crores on 29/04/2008. These entries are marked against Mahalaxmi Construction Corporation Ltd. on same dates on page 37. Although it appears that there is a connection between the unexplained expenses and cheques reversed, a closer scrutiny shows that this may not be correct. If the contention of the appellant is correct then, pages no. 38, 39 and 18 of Bhat documents should contain entries of cheque payments made by Mahalaxmi Construction Corporation Ltd. on 28/07/2006, 16/07/2007 and 21/07/2007: However, this is not the case. This implies that cheque payments made by the appellant to Goofy Graphics are not shown as expenses in the Bhat documents though they have been recorded as having been paid by the appellant. Therefore, there cannot be a dual addition of the same amount. 72. Similarly, the appellant has provided me with a copy of Shatmurti Reality Pvt. Ltd. with Goofy Graphics. This is a running account that Shatmurti Reality Pvt. Ltd. had with Goofy Graphics belonging to Shri Kale. On 28/07/2006 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be inferred that the amounts paid by cheque by the appellant and AB are also included in total payment of ₹ 43.8364 crores. The appellant's share of this sum will be ₹ 75 lakhs. Hence, I hold that the appellant is entitled to a relief of ₹ 75 lakhs on account of total addition of expenses made by cheque. 150. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 151. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We find the finding given by the Ld.CIT(A) that the seized documents reveal payment of ₹ 1.5 crores in cheque prior to 14-04-2007 by B.T. Patil and the share of the assessee in the said amount is ₹ 75 lakhs for which the assessee is entitled to a relief of ₹ 75 lakhs on account of payable of expenses made by the cheque is not based on any cogent evidence and proper appreciation of facts. On a pointed query by the Bench during the course of hearing, the Ld. Counsel for the assessee was also unable to clarify as to how this deduction/relief was justified on the basis of notings only on the loose pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und of appeal No.1 by the Revenue reads as under : 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the additional depreciation of ₹ 15,92,976/- at higher rate of 80% for civil work foundation and related labour cost of the windmill. 161. After hearing both the sides we find the above ground raised by the revenue is identical to the ground of appeal No.3 raised by the revenue in ITA No.53/PN/2013 for A.Y. 2007-08. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasonings, this ground by the revenue is dismissed. 162. Ground of appeal No.2 by the Revenue reads as under : 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition of ₹ 817500/ - on account of unaccounted expenditure incurred by the assessee on the basis of paper seized from the residence of Shri. D A Bhat. 163. Facts of the case, in brief, are that the AO during the course of assessment proceedings noticed that the assessee had failed to consider various expenses incurred as appearing at pages 1 to 5 and 7 of the seized papers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons, the total of which is ₹ 3.35 lakhs. Page no. 2 is again a summary of payments made to various persons aggregating to ₹ 2.95 lakhs. Page No.3 shows various expenses incurred in hotel, gold purchases, plywood purchase, mobile bills of Naveen, Dynapac list etc. which aggregate to ₹ 12,94,772/-. Page no. 4 contains details of expenses incurred by both Mahalaxmi Construction Corporation Ltd. and B T Patil and Sons and the receivable position as on 11/07/2007. The contents on page no. 5 are details of various expenses including those which are written as 'K' expenses. The total of 'K' expenses is ₹ 26,13,500/- which is incurred on various dates between 26/12/2008 to 24/01/2009. Page no. 7 contains working of interest payment on purchase of tender documents, bank guarantees for EMDs, FDs to be kept for EMDs and EMDs required for procuring mobilization advances. It appears that this is a working or estimate of money required by Mahalaxmi Construction Corporation Ltd. and B T Patil and Sons for giving various bank guarantees and meeting EMD requirements. In fact, the word 'official' is also mentioned against these workings. In my opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he paper book filed on behalf of the assessee. We find in the instant case the AO made an addition on the basis of certain documents seized from the residence of Shri D.A. Bhat as per pages 1 to 5 and 7 which contain certain expenditure totaling to ₹ 94,17,652/-. It was also noted by the AO that the assessee has not considered the same while working out the unaccounted income. Accordingly, the AO held that 50% of such expenditure belongs to the assessee. Since the papers contain amount with dates an amount of ₹ 8,17,500/- relating to the impugned assessment year was added by the AO. We find the Ld.CIT(A) directed the AO to verify the source and application statement and in case the source is available then to delete the addition. We do not find any merit in the above logic of the Ld.CIT(A). Admittedly, the papers containing certain expenditure with dates mentioned therein are not considered by the assessee while working out the unaccounted income. During the hearing before us, the Ld. Counsel for the assessee was also not in a position to clarify the basis of deletion made by the CIT(A) and justify such deletion. In view of the above we reverse the order of the CIT(A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceeding year the addition of ₹ 7,07,195/- on account of undervaluation of work-inprogress was deleted on the basis of the decision of Hon ble Bombay High Court in the case of Continental Warehousing Corporation/All Cargo Global Logistics Ltd. (Supra) on the ground that the assessment was completed u/s.143(3) and no incriminating material was found either during the course of search or during 153A proceedings. However, the said decision is not applicable for the impugned assessment year as the assessment had not been completed for the A.Y. 2009-10 when the search took place and the same was pending. The Ld. Counsel for the assessee was unable to explain the non consideration of work-in-progress in the final accounts. In view of the above and in view of the detailed reasoning given by the Ld.CIT(A) while confirming the addition of ₹ 58,45,436/- on account of undervaluation of work-in-progress we find no infirmity in the same. Ground raised by the assessee on this issue is accordingly dismissed. 175. Grounds of appeal No.4 and 5 by the assessee read as under : 4] The learned CIT(A) erred in holding that 60% of the cost of Power Evacuation facility and infrastructur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee did not file the return of income for any of the 6 years contemplated u/s.153A or 153C, the time limit for filing of return of income for all those years would be automatically extended and the same would have to be considered as return filed u/s.139 and therefore all natural consequences under the act including the provisions of carry forward and set off of various types of losses and computation of interest payable u/s.234A, 234B, 234C and 234D would become applicable. It would leave no distinction between the non-filer and a regular filer of return and would result in allowing prescribed benefits to a delinquent assessee. He accordingly held that in respect of the A.Y. 2009-10 the assessee should have filed the return of income on or before 31-10-2009. Since this was not done the assessee was liable to pay interest u/s.234A. He accordingly dismissed the grounds raised by the assessee. 180. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 181. The Ld. Counsel for the assessee submitted that when the search took place on 23-09-2009 the due date for filing of the return u/s.139(1) had not expired. The assessee in response to notice u/s.153A f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. . . . . . . . . . . . . . . . . 185. We find the provisions of section 234A (3) read as under : (3) Where the return of income for any assessment year, required by a notice under section 148 [or section 153A] issued [after the determination of income under sub-section (1) of section 143 or] after the completion of an assessment under sub- section (3) of section 143 or section 144 or section 147, is furnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of [one] per cent, for every month or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is effected and after the same is effected books of account, other documents, money, bullion, jewellery or other valuable article or thing is found as a result thereof that notwithstanding anything and within the meaning of the above provisions having been concluded, it is open for the Revenue to make an assessment. It is also open to the Revenue to make a reassessment in cases where it exercises the powers to requisition books of account etc. This is because it is of the view that the books of account are required to be summoned or taken into custody. It, therefore, issues a summons in that regard. It may also requisition the books of account or other documents for that might be useful and or any assets representing withholding or part income or property which has not been or would not have been disclosed for the purpose of the Indian Income Tax Act, 1922 or the Income Tax Act of 1961 by any person from whose possession or control they have been taken into custody. This is when the authorities have reason to believe that such powers need to be exercised. Therefore, the fetters and which are to be found in other provisions are removed and a notice of assessment in such cases is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith such order of the CIT(A) the assessee is in appeal before us. 192. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. The manner of application of assets seized u/s.132 or requisitioned under 132A is prescribed u/s.132B of the I.T. Act. As per the said provisions if the asset consists solely of money or partly of money and partly of other assets the AO may apply such money in the discharge of the liabilities referred to in clause (i) of section 132B(i) and the assessee shall be discharged of such liability to the extent of money so applied. In the instant case, the money so seized was kept in the PD account of the CIT. The assessee vide letter dated 30-03-2010, addressed to the AO, a copy of which is placed at page 261 of the paper book has requested the department for appropriation of the seized cash towards advance tax for A.Y. 2010-11. Under these circumstances, we are of the considered opinion that such cash so seized can only be appropriated towards advance tax for A.Y. 2010-11. The AO is directed to give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 83199954/- which is the additional income declared during the course of search proceedings, on account of expenses form unexplained sources which attract provision of S. 69C of the Income Tax Act which is not an income from the business of undertaking referred to in sec. 80IA(4). 198. After hearing both the sides we find the above ground is identical to ground of appeal No.2a and 2b filed by the Revenue in ITA No.53/PN/2013 filed by the Revenue for A.Y. 2007-08. We have already decided the issue and the ground raised by the Revenue has been allowed. Following the same reasoning, this ground by the Revenue is allowed. 199. Grounds of appeal No.4 and 5 being general in nature are dismissed. ITA No.2577/PN/2012 (By Assessee) (A.Y. 2010-11) : 200. Grounds of appeal No.1 and 7 by the assessee being general in nature are dismissed. The Ld. Counsel for the assessee at the time of hearing did not press grounds of appeal No.2 and 6 for which the Ld. Departmental Representative has no objection. Accordingly, the above 2 grounds by the assessee are dismissed as not pressed . 201. In grounds of appeal No.3 to 3.2 the assessee has challenged the order of the CIT(A) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. Following the same reasoning this ground by the Revenue is dismissed. 207. Ground of appeal No.2 by the Revenue reads as under : 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of ₹ 2494826/- on account of unaccounted expenditure incurred by the assessee on the basis of paper seized from the residence of Shri. D A Bhat. 208. After hearing both the sides we find this ground by the Revenue is identical to ground of appeal No.2 in ITA No.54/PN/2013 filed by the Revenue for A.Y. 2008-09. We have already decided the issue and the ground raised by the Revenue on this issue has been allowed. Following similar reasonings this ground by the Revenue is allowed. 209. Ground of appeal No.3a and 3b by the Revenue read as under : 3. a) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction under sec. 801A(4) of ₹ 244532117/- which was earlier confirmed by the Ld. CIT(A) as well as the Hon'ble ITAT for A.Y. 2004-05 and 2005-06 as the assessee is only a work contractor and not a developer as per the explanation below 801A(13). b) On the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional income and the source has already been explained, therefore, no addition is required. 214. However, the AO did not accept the contention of the assessee on the ground that speed money payments were already made and hence there could not be any projected expenses. He held that since the unaccounted funds were already utilized, these could not be the source of cash found in the locker. He accordingly made addition of ₹ 2.05 crores to the total income of the assessee u/s.69A of the I.T. Act. 215. Before CIT(A) it was submitted that the cash found stood explained as the same was reflected in the source and application statement while working out undisclosed income of ₹ 24.71 crores in its hands. It was pointed out that the AO had already taxed the entire Ghodzari project expenses and taxing the cash found had resulted in double addition of the said amount. 216. Based on the arguments advanced by the assessee the Ld.CIT(A) directed the AO to verify the source and application statement on the basis of which undisclosed income has been offered and in case there is no surplus available then the entire amount will be taxed as unexplained cash found. The rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection to the AO to verify the cash flow statement and if the source is available then to delete the addition and in case the assessee is unable to explain the source, to make the addition. The Ld. Departmental Representative could not point out any mistake in the order of the CIT(A) on this issue. Accordingly, the order of the CIT(A) is upheld and the ground raised by the Revenue is dismissed. 219. Ground of appeal No.5 by the Revenue reads as under : 5. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction u/s. 801A on account on windmill of ₹ 10772594/ - . 220. Facts of the case, in brief, are that the AO during the course of assessment proceedings observed that while making the claim of deduction under section 80IA(4)(iv), the assessee had ignored the provisions of 80IA(5) which provided that the profit and gain of eligible business should be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year upto and including the assessment year for which the determination is to be made. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 005-06 and 2006-07, had allowed the claim of deduction u/s.80IA(4)(iv)(a). The relevant portion of the ITAT s order is reproduced below : 2.1 We also find that in the case of Velayudhaswamy Spinning Mills (P) Ltd. Vs. ACIT (2010) 231 CTR (mad) 368 Hon ble Madras High Court has held that losses and depreciation of the years earlier to the initial assessment year which have already been absorbed against the profits of other business cannot be notionally brought forward and set off against the profits of the eligible business for computing the deduction u/s.80IA. Following this judgment of Hon ble Madras High Court, this issue is decided in favour of the assessee. The assessee is entitled to claim for deduction u/s.80IA(4)(iv)(a) of the Act. 85. Thus, in view of the identical facts and circumstances, decision of the Hon ble ITAT reproduced above is applicable to the instant case also. The disallowances made for the assessment years under appeal are therefore, deleted. This ground of appeal is allowed. 223. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 224. After hearing both the sides, we find an identical issue had come up before the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park or generates power or commences transmission or distribution of power : Provided that where the assessee begins operating and maintaining any infrastructure facility referred to in cl. (b) of Explanation to cl. (i) of sub-s. (4), the provisions of this sub-section shall have effect as if for the words fifteen years , the words twenty years had been substituted............... 14. From the above provisions of sub-s. (2) of s. 80-IA of the Act, it is evident that the assessee is granted the option to select initial assessment year i.e., first assessment year of the any ten consecutive assessment years out of fifteen years . Starting assessment year for counting the duration of fifteen years is also provided in the said sub-section. As per these provisions, the assessee is not allowed to jump the assessment year once an initial assessment year is opted. Therefore, we find no fault with the assessee in selecting the asst. yr. 2004-05 as the initial assessment year . In this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 25,44,326 under s. 80-IA in respect of the profits from the windmill activity. Accordingly, the clarificatory ground raised is allowed. In the result, adjudication of the grounds 3 and 4 raised in the appeal is mere academic and hence they are dismissed as infructuous. 16. In the result, the appeal of the assessee is allowed. 136. Respectfully following the decision of the Coordinate Bench of the Tribunal cited (Supra) and in absence of any contrary material brought to our notice we hold that the provisions of section 80IA(5) are applicable only from the initial assessment year, i.e. the assessment year in which deduction u/s.80IA(4) was first claimed by the assessee after exercising its option as per the provisions of section 80IA(2) of the Act. The order of Ld.CIT(A) is accordingly upheld and the ground raised by the Revenue is accordingly dismissed. 225. Following the decision of the Coordinate Bench of the Tribunal on this very issue to which both of us are parties, we do not find any infirmity in the order of the CIT(A) on this issue. Accordingly, the same is upheld and the ground raised by the Revenue is dismissed. 226. Grounds of appeal No.6 and 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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