Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Mahalakshmi Infra Projects Ltd., Versus DCIT, Central Circle, Kolhapur & ACIT, Central Circle, Kolhapur

2015 (12) TMI 1517 - ITAT PUNE

Disallowance of deduction u/s u/s.80IA(4) in the asst. framed u/s.153A - Held that:- Tribunal in assessee’s own case in the preceding assessment following the decision of Hon’ble Bombay High Court in the case of CIT Vs. ABG Heavy Industries Ltd. and other [2010 (2) TMI 108 - BOMBAY HIGH COURT] 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 asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the CIT(A) deleting the addition made by the AO. In view of 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 against each figure. On a pointed query raised by the Bench during the course of hearing the Ld. Departmental Representative also candidly admitted that no such exercise has been done either by the Investigation Wing after the se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed in upholding the addition - Decided against assessee

Addition u/s.41(1) - Held that:- CIT(A) is not justified in sustaining the addition made by the AO u/s.41(1) of the I.T. Act as the liabilities do not cease to exists merely by efflux of time. - Decided in favour of assessee

Depreciation claim - Held that:- No infirmity in the order of the CIT(A) allowing higher depreciation @80% on civil work foundation and related labour cost of windmill. - Decided in favour of asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 paper. In view of the above, the order of the Ld.CIT(A) on this issue is set aside - Decided against assessee

Unaccounted expenditure incurred by the assessee on the basis of paper seized from the residence of Shri. D A Bhat - Held that:- Admittedly, the papers containing certain expenditure with dates m .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t 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 cl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

50 to 56/PN/2013 - Dated:- 9-12-2015 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM Appellant by : Shri Sunil Pathak Respondent by : Smt. M.S. Verma, CIT ORDER PER R.K. PANDA, AM : ITA Nos. 2571 to 2577/PN/2012 filed by the assessee and ITA Nos. 50 to 56/PN/2013 filed by the Revenue are cross appeals and are directed against the common order dated 30-10-2012 of the CIT(A) Kolhapur relating to Assessment Years 2004-05 to 2010-11 respectively. For the sake of convenience all these appeals were h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

come on 20-07-2010 declaring total income at ₹ 68,02,950/-. The AO during the course of assessment proceedings noted that while finalizing the scrutiny assessment u/s.143(3), the then AO had disallowed deduction claimed u/s.80IA(4) at ₹ 84,02,555/-. The CIT(A) decided the issue against the assessee and on further appeal the Tribunal decided the issue in favour of the Revenue and upheld the decision of the CIT(A). The assessee filed an appeal before the High Court and the decision is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(4) of ₹ 84,02,555/-. 1.1 The Ld.CIT(A) failed to appreciate that the assessee company was entitled to deduction u/s.80IA(4) and the same should be allowed to the asessee company. 1.2 The Ld.CIT(A) erred in not appreciating that since the asst. u/s.143(3) was 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. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f 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.Y. 2003-04 has restored the issue to the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

7. 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.153A, therefore, this issue becomes academic in nature. 8. 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 original assessment order passed u/s.143(3) dated 22-12-2003 the AO disallowed the claim of deduction u/s.80IA(4). The CIT(A) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

question of law for our consideration. Whether on the facts and in the circumstances of the case on a proper and reasonable interpretation of S.80IA(4), the Tribunal is right in holding that Government or Statutory body is the developer of infrastructure facility and here appellant is not entitled to deduction under that section? 3. The Tribunal, while dismissing the Assessee s Appeal, followed its order for assessment year 2003-2004 while denying the deduction claimed under section 80IA(4) of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tentions 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

count of difference in valuation to the tune of ₹ 18,58,001/-. 12. Facts of the case, in brief, are that during the course of assessment proceedings the AO observed that the assessee has acquired 5 properties being Flat Nos. 7,12,13,15 and 25 at Partha Vihar, Gujarath Colony, Kothrud, Pune at ₹ 25,49,999/- as on 24-07-2003. To know the investment in the said property the AO made a reference u/s.142A to the DVO to determine the cost of the properties in the hands of the assessee as on .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt to Partha Developers on 24-07-2003. Post development the assessee was given 5 flats in the said apartment, stamp duty valuation of which was ₹ 63,09,160/- as on 24-07-2003 as against the sale consideration received by it from Partha Developers of ₹ 69,50,000/-. It was argued that the valuation made by the DVO was erroneous as the same was based on the rates prevailing during the year 2005 and not 2003. It was further submitted that there was boom in Pune Real Estate market between .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted that the valuation officer has valued the property as on the date of transfer of the property to the asesssee, i.e. in 2003. Therefore, the contention of the assessee regarding steep rise during 2003 to 2005 is out of place. Rejecting the various explanations given by the assessee the AO made addition of ₹ 18,58,001/- u/s.69B of the I.T. Act. 14. Before CIT(A) the assessee reiterated the same arguments as made before the AO. It was submitted that various documents in connection with th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

anced 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 acc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

same could not be revisited in the course of reassessment under section 153A, specially when no incriminating evidence is found during the course of search and seizure. 16. Even otherwise, the addition is not warranted because the DVO has applied the valuation rates existing in the year 2005-06 whereas the property was transferred during the year 2003-04. Further, no record of any underhand dealing was found during the course of search and seizure which would lead an inference that the property .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

q.ft. of construction at ₹ 25.50 lakhs did not reflect the actual market value of flats existing in the area during 2003-04. Hence, the addition made is unwarranted even on merits. This ground of appeal is allowed. 16. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 17. The Ld. Departmental Representative strongly supported the order of the AO. She submitted that the assessee could not explain satisfactorily the difference between the valuation done by the DVO a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s 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 9 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 CIT(A) has deleted the addition on 2 grounds. The first one is that there was no incriminating material found during the course of search and second one is that the DVO valued the property by adopting rates of Year 2005-06 while the property was transferred in the year 2003-04. He submitted that the order of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

inality. 19. Referring to page 61 of the paper book the Ld. Counsel for the assessee drew the attention of the Bench to the valuation report of the DVO wherein he has referred to sale instances of November and December 2005. He submitted that when the property was transferred in F.Y. 2003- 04 the DVO was not justified in adopting the rates for 2005-06. 20. Referring to the decision of Hon ble Delhi High Court in the case of Puneet Sabharwal (Supra) he submitted that the Hon ble High Court in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

td./Continental Warehousing Corporation (Supra) is not applicable. She submitted that the general proposition is that all pending assessments shall abate and be open for examination but concluded assessments can be examined only with respect to certain circumstances where incriminating material or relevant material has been unearthed during the search or during the proceedings u/s.,153A. She emphasized on the later condition, i.e. unearted during proceedings u/s.153A. Referring to the decision o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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. Wh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der Section I53A read with Section 143 (3) was erroneous or prejudicial to the interests of revenue. " 22. She also relied on the following decisions to the proposition that additions can be made on the basis of incriminating material found during the course of search or during 153A proceedings : 1. M/s. Canara Housing Development Vs. The DCIT order dated 25-07-2014 2. CIT Vs. Anil Kumar Bhatia reported in 82 CCH 113 Delhi High Court. 3. Nandini Delux Vs. ACIT reported in 54 taxmann.com 172 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ase the assessee during the course of original proceedings u/s.143(3) vide letter dated 26-07-2006, a copy of which is placed at page 30 of the paper book had given the agreement for sale of development rights of plot as per clause 10 of the said letter. In the original assessment order passed u/s.143(3) on 22-12-2006 there is no addition on this issue. The submission of the Ld. Counsel for the assessee that no incriminating material was found during the course of search also could not be contro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the year 2003-04. Under these circumstances we find merit in the submission of the Ld. Counsel for the assessee that the addition is not justified since the DVO 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dings. 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 reasoning given by the CIT(A) deleting the addition made u/s.69B of the Act we find no infirmity in the same. Accordingly, the order of the CIT( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

issed. 27. Grounds of appeal No.3 and 4 by the Revenue being general in nature are dismissed. ITA No.2572/PN/2012 (By Assessee) (A.Y. 2005-06) : 28. Grounds of appeal No.1 to 2 by the assessee reads as under : 1. The Ld.CIT(A) erred in confirming an addition of ₹ 7,07,195/- 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in receipt of various advances from contractee, viz., mobilization advance, machinery advance, security advance, advance against security deposits, advance against erection and commission, advance against work done etc. Out of this, security advance has been received from the contractee against material lying at site. The ratio of advance to cost of material is 75:100. The AO further noted that the assessee has shown Nil work-in-progress in connection with Gunjawani project but had shown receip .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t 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 ma .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n respect of subsequent years 2006-07, 2007-08 and 2010-11. 32. However, the CIT(A) also was not convinced with the arguments advanced by the assessee and upheld the addition made by the AO by observing as under : 20. I have gone through the submissions of the appellant. On this issue, I agree with the action of the assessing officer in bringing the closing stock into taxation during the relevant previous year. The assessing officer has noted that the ratio of advance to cost of material lying a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er years and the same has been allowed is not a good reason for making the addition in this year. There is no bar on the Department to set right an incorrect method of valuation of WIP even though the same may have been regularly followed and allowed in assessment in earlier years. It is well-known that there is no res-judicata in income-tax proceedings. 21. The appellant's counsel had submitted that in case the addition is confirmed then they may be allowed the benefit of claiming this valu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ring to pages 33 to 44 of the paper book submitted that original assessment in the instant case was completed u/s.143(3) on 25-04-2007 which is prior to the search. The addition has been made by the AO on the basis of the details submitted in the balance sheet and no incriminating evidence was found in 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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 before u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cannot be disturbed by making addition in absence of any incriminating material found during the course of search or unearthed during 153A proceedings. As mentioned earlier admittedly in the instant case no incriminating material on account of work-inprogress was found either during the course of search or unearthed by the AO during the course of 153A proceedings or from any outside sources. Whatever addition has been made is on the basis of the audited accounts submitted by the assessee in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 . 38. Grounds of appeal No.4 to 4.2 by the assessee read as under : 4. The Ld.CIT(A) erred in not allowing the deduction u/s.80IA(4) of ₹ 1,46,85,364/-. 4.1 The Ld.CIT(A) failed to appreciate that the assessee company was entitled to deduction u/s.80IA(4) and the same should have been allowed to the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ibunal 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 complet .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

CIT(A) and the paper book filed on behalf of the assessee. We find in the original order passed u/s.143(3) the AO disallowed the claim of deduction u/s.80IA(4). The CIT(A) upheld the disallowance and the Tribunal also confirmed the order of the CIT(A). On further appeal by the assessee, the Hon ble High Court, following the decision in assessee s own case in the preceding assessment year, restored the issue to the file of the Tribunal for fresh decision in accordance with law. The relevant obser .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on? 3. The Tribunal, while dismissing the Assessee s Appeal, followed its order for assessment year 2003-2004 while denying the deduction claimed under section 80IA(4) of the Income Tax Act. The order of the Tribunal for the assessment year 2003-2004 has been set aside by this Court in Appeal filed by the Appellant being I.T. Appeal No.4610 of 2010 on 30th August, 2011 and restored to the Tribunal for a fresh decision. 3. For the reasons mentioned in the order dated 30th August, 2011, we set asi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r decisions, has 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 grounds raised by the assessee become academic in nature. Accordingly, the same are dismissed. 42. Ground of appeal No.5 being general in nature is dismissed. ITA No.51/PN/2013 (By Revenue) (A.Y. 2005-06) : 43. The only ground raised by the Revenue re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ppeal 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 pu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unds of appeal No.1 and 2 in ITA No.2572/PN/2012 filed by the assessee for A.Y. 2005-06. We have already decided the issue and the grounds raised by the assessee have been allowed. Following the same reasonings, the above grounds by the assessee are allowed. 48. Grounds of appeal No. 4 to 4.2 by the assessee read as under : 4. The Ld.CIT(A) erred in not allowing the deduction u/s.80IA(4) of ₹ 1,55,18,839/-. 4.1 The Ld.CIT(A) failed to appreciate that the assessee company was entitled to de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng the claim of deduction u/s.80IA(4) at ₹ 1,53,18,839/-. The assessee challenged the disallowance and the CIT(A) decided the issue against the assessee. The matter is pending before the Tribunal, as mentioned in the order of CIT(A). In the meantime, the AO subsequent to the search completed u/s.132 of the I.T. Act, issued notice u/s.153A of the Act. In the order passed u/s.153A r.w.s.143(3) dated 27-12-2011 the AO noted that against the order of the CIT(A) the assessee has preferred an ap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

w, 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 into during the course of original assessment u/s 143(3) and an opinion was formed that depreciation is allowable on foundation of windmill at the rates applicable to WTGS and MEDA charges were an allowable business expenditures. Hence, it is not possible for the Assessing Officer in the absence of any material found during .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the windmill. He therefore asked the assessee to substantiate its claim made on the assets other than the windmill. 57. The assessee submitted that there was no civil work involved for erection of the wind turbine as parts like control panels and display meters were used within the tower itself. It was submitted that the civil work done in the form of foundation work could not be separated from the wind turbine and therefore it was entitled for depreciation on the entire cost of the wind tur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

A, item III(3)(ixviii)(i). The AO accordingly reworked the depreciation. Similarly the AO noted that the assessee has paid ₹ 6,35,000/- towards processing charges to MEDA for installation of windmill at Akhatwade, Dist. Nandurbar. The charges were claimed as indirect expenses. The AO disallowed the claim on the ground that the said expenditure incurred is towards capital assets and hence should have been capitalized. He further noted that the assessee had shown MEDA charges as capital expe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Y. 2007-08. 61. Based on the arguments advanced by the assessee the Ld.CIT(A) deleted the disallowance made by the AO by observing as under : 33. In respect of the disallowance made on depreciation claimed on windmill and disallowance of MEDA charges during the course of assessment proceedings u/s.153A, I find that the assessing officer had noted in the assessment order passed u/s.143(3) on 02-12-2008 that the appellant is engaged in the business of generation of power through windmill. 34. Vide .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ooked into during the course of original assessment and an opinion was formed that depreciation is allowable on foundation of the windmill at the rates applicable to WTGS and that MEDA charges were an allowable business expense. Hence, it was not possible for the assessing officer, in the absence of any material found during the course of search to make the aforesaid disallowance as the same tantamount to a change of opinion which is not permitted in the course of reassessment u/s.153A. The appe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

AO is justified. Therefore, the order of the CIT(A) should be reversed and that of the order of the AO be restored. 64. The Ld. Counsel for 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 High Court in the case of All Cargo Global Logistics Ltd./ Continental Warehousing Corporation (Supra) has held that completed assessments cannot be disturbed by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

issue is dismissed. 66. 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 made u/s. 69B on account of difference in valuation to the tune of ₹ 2,64,000/-. 67. Facts of the case, in brief, are that the AO during the course of assessment proceedings noted that the assessee had acquired land at R.S.No.152, at village Akhatwade, R.S.No.73 at village Gangapur, Dist. Nandurbar in th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rea, type of occupation, purpose of valuation, use etc. for the fair market rate of the property. He accordingly valued the property at ₹ 3,84,000/- as against ₹ 1,20,000/- declared by the assessee. Similarly for the A.Y. 2007-08 as against the value disclosed by the assessee at ₹ 1,80,000/- the DVO valued the same at ₹ 6,71,000/-. 68. The AO provided the copy of the valuation report to the assessee and sought its explanation and asked the assessee as to why the differenc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d ₹ 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e department to prove the understatement or concealment of income. The decision of Hon ble Delhi High Court in the case of CIT Vs. Puneet Sabharwal reported in 338 ITR 485 was relied upon. 70. Based on the arguments advanced by the assessee the Ld.CIT(A) deleted the addition by observing as under : 38. I have considered the submission of the appellant. I find that as against the valuation of ₹ 3.84 lakhs and ₹ 6.71 lakhs done during the course of valuation by the DVO for assessment y .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pted the value of ₹ 3.84 lakhs and ₹ 6.71 lakhs on the basis of the rates reflected in the ready reckoner and other factors like size, situation, locality, accessibility etc. Apparently, this is merely an estimation and not based on comparable instances of sale in this locality. Further, it is well-known that the windmills are located in far-flung areas which are often not easily approachable. Therefore, the valuation of land in these areas will not be the same as the value of a land .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he 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. 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 tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

llowing 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 of appeal No. 4 by the Revenue being general in nature is dismissed. ITA No.2574/PN/2012 (By Assessee) (A.Y. 2007-08) : 76. Grounds of appeal No.1 and 7 by the assessee being general in nature are dismissed. Ground of appeal No.6 was n .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion and development of irrigation projects. A search u/s.132 of the I.T. Act was conducted on the assessee company on 23-09-2009. During the course of search certain loose papers marked Bundle No.1 containing 40 loose sheets were found from the residence of Shri Dhirendra Anant Bhat, Technical Director of the company. The above loose sheets indicated evidences of speed money depicting the name of the project, amount, date of payment, name of payer, name of the recipient, designation of the prim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed money paid in respect of Ghodzhari project upto 04-02-2009. The total speed money paid in respect of Ghodzhari Project as on 04-02-2009 amounts to ₹ 43,83,64,000/-. 50% of the above amounting ₹ 21,91,82,000/- relates to the assessee company and the balance 50% of ₹ 21,91,82,000/- to B.T. Patil and sons, Belgaum Construction Company Ltd. assessee s J.V. Partner. Both the assessee and its JV partner B.T. Patil and sons, Belgaum Construction Company Ltd. admitted that ₹ 4 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al 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 o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at and he has categorically stated u/s.132(4) that speed money payments have been made. (iv) Quantum, date of payment of speed money, details of payer and recipient are available in the seized documents. (v) Shri D.A. Bhat was maintaining the accounts related to speed money of Ghodzari project, seizure of evidence from his residence proves this fact beyond doubt. Moreover, seizure of documents of B.T. Patil & sons in respect of speed money from the residence of Shri D.A. Bhat fortifies this .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

are evidence to prove that speed money expenses are shared equally by the assessee company and B.T. Patil & sons. 80. In view of the above, the AO held that unexplained expenses in the form of speed money payments should be taxed in the year of payment. According to the AO as per his analysis the speed money for A.Y. 2007-08 comes to ₹ 550.35 lakhs out of which share of the assessee company is ₹ 270.175 lakhs. He therefore asked the assessee to explain as to why the amount of &# .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Shri D.A. Bhat evidence of speed money paper in respect of Koyna project were also found in addition to Ghodzhari project. The assessee disclosed 51% of the said amount of ₹ 1,41,85,000/- related to Koyna project amounting to ₹ 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tted 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 Bundle No.1 seized from the residence of Shri R.D. Shinde, Managing Director of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. In view of the above the AO worked out the year wise speed money payments as per seized material and the assessee s share out of total speed money is as under : A.Y.2007-08 A.Y.2008-09 A.Y.2009-10 Total Total speed money paid 550.35 lakhs 2981.35 lakhs 851.94 lakhs 4383.64 lakhs Assesee s share,i.e.50% 275.175 lakhs 1490.675 lakhs 425.97 lakhs 2191.82 lakhs As per the above table, the AO came to the conclusion that unexplained expenses in the form of speed money payments should be taxed in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

khs the assessee has disclosed Nil additional income. Therefore, during the assessment proceedings u/s.153A the AO asked the assessee to explain as to why the unexplained expenses related to Ghodzhari project should not be taxed as per the seized document. 86. It was submitted by the assessee that Shri D.A. Bhat, Technical Director of the assessee company has retracted his 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion 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 th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s immense evidentiary value. The seized documents contain quantum, date of payment of speed money, details of payer and recipient. Shri D.A. Bhat was maintaining the accounts related to speed money of Ghodzhari project. Seizure of evidence from his residence proves this fact beyond doubt. Further, seizure of documents of B.T. Patil and sons in respect of speed money from the residence of Shri D.A. Bhat fortifies this fact. Had Shri D.A. Bhat not been maintaining accounts related to speed money t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o involved in financial matters of the company. The assessee has not submitted any supporting evidence in support of its contention that the said expenses have been paid after receipt of RA bills. According to the AO the paper/document should be read as a whole and all the contents of the papers are presumed to be true and correct unless contrary is proved. The assessee is accepting the figures of pages 39 and 40 but not accepting the dates of pages 39 and 40. Therefore, the contention of the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he 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 pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 accounts related to speed money of Ghodzari project. Seizure of evidence from his residence proves this fact beyond doubt. Moreover, seizure of documents of B.T.Patil & Sons in respect of speed money from the residence of Shri D.A.Bhat fortifies this fact. Had Shri D.A.Bhat not been maintaining accounts related to speed money there was no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itting payment of speed money u/s 132(4) on the date of search at different premises is not a mere coincidence. Any statement at a later stage contrary to what was stated at the time of search should be corroborated by strong evidence. It is pertinent note that assessee has disclosed additional income of ₹ 75,00,000 for AY 2008-09 on account of unexplained expenses related to projects other than Ghodzari project in the return of income u/s 153A. Thus, the stand of the assessee that no spee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

project and, therefore, payment of ₹ 43 Crores is highly unreasonable, following facts are very relevant. Assessee before starting the work received mobilization advance of ₹ 28,02,00,000/- on 31/3/2007 from government. Further, additional mobilization advance of ₹ 22,80,00,000/- was received from government by the assessee on 25/2/2008. Thus, mobilization advance of ₹ 50.82 Crores was received from government by the assessee as on 25/2/2008. Therefore, payment of ₹ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y 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 disclo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Company. It was submitted that the assessing officer failed to accept this fact and taxed this amount in the assessee s hands. The assessee submitted that the following schedule, as appearing in pages 38 to 40 in respect of Ghodzhari project, would be contrary to the normal practice if it was assumed that some payment was required to be given for getting contract and realization of bills: Figures in thousands (i) Pre-tender, i.e. before Sept.,2006 525.00 (ii) Tender date to work order date Jan, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of Ld.CIT(A) to certain discrepancies in the seized papers. After taking into account these discrepancies, the assessee worked out a revised source and application statement to arrive at the undisclosed income as under : Assessment Year Undisclosed income 2006-07 42,58,200/- 2007-08 14,35,54,700/- 2008-09 5,20,63,750/- 2009-10 4,75,94,030/- Total 24,74,69,680/- 92. The assessee submitted that the undisclosed income worked out above, should be taxed as against the figures adopted by the asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect. Earlier also the Hon'ble Supreme Court in Narayan Bhagwantrao Gosavi Balajiwale v. Gopal Vinayak Gosavi AIR 1960 SC 100 had held that an admission is the best evidence that an opposite party can rely upon and, though not conclusive, yet could be decisive of the matter unless successfully withdrawn or proved erroneous. 58. Though there is nothing specific in the Income-tax Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

evidentiary value, yet they are not always conclusive proof. The Supreme Court in the case of Avadh Kishore Das v. Ram Gopal AIR 1979 SC 861 has held that evidentiary admissions are not conclusive proof of the facts admitted and may be explained or shown to be wrong, but they do raise an estoppel and shift the burden of proof on to the person making them. The Supreme Court further held that unless shown or explained to be wrong, they are an efficacious proof of the facts admitted. 59. In the ins .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ken understanding and misconception of facts. He also stated that he was under mental stress at the time of making the statement. However, 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 state .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s 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 true facts or that there was coercion, inducement or threat while recording his earlier statements. 61. In specific reference to the income-tax proceedings, it would be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it is proved by legally acceptable evidence that such admission, confession or oath statement was involuntary or was tendered under coercion or duress. Drawing support from the decision of the Supreme Court in the case of Surjeet Singh Chhabra v. Union of India [1997] 1 SCC 508 the Tribunal disallowed plea of retraction of the assessee on the ground that neither the ground of coercion or duress nor the ground of involuntary statement was proved to have existed at the time of recording of the sta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

asons or evidences, because in the absence of this even after retraction matters may be decided against him on the basis of initial statement itself. Generally, as compared to a subsequent statement whereby earlier admitted facts or positions are retracted, the first statement must be presumed to be more reliable for the reason that such was the statement which was recorded first in point of time and was made on the spot. Possibility of an afterthought or to concoct an explanation and fabricate .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted that the amount in question revealed the concealed business income of the appellant. This part of the explanation was accepted in search and seizure proceeding and in assessment wherein the declaration was treated as business income of the appellant earned by inflating the expenses. In respect of the second limb of the admission, Shri Ravindra Shinde averred that Shri D. A. Bhat, being a technical director not concerned with financial aspects or accounts of the company, has given contradicto .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ein and accepted the same. In fact these documents have been relied upon to make claims about shifting of expenses incurred in respect of amounts recorded against an entity 'AB'. He merely stated that the impugned amounts in respect of Ghodzhari project related to financial years 2007-08, 2008-09 and 2009-10, and that expenses pertaining to Koyna project related to the financial year 2009-10 for the reason that major amounts were realised from these projects when R.A. Bills were accepted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

appellant company apart from being a close confidant of the Managing Director, Shri R D Shinde. It is apparent from the documents seized from his residence which pertained to the joint venture between the appellant company and B T Patil and Sons (hereinafter referred to as 'Bhat documents') that Shri Bhat was involved 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed 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 pai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

48.90 crores of which ₹ 26.64 crores was already disbursed to various entities and persons. This page also contains details of site expenses and purchases of machinery which were entered into the regular books of account of the financial year 2007-08. Similarly, page 31 is a reconciliation of the seized bills in respect of payments made till 16/06/2007 between the partners in the joint venture which was given to Shri Bhat by B T Patil and Sons. So is page no. 28. This page also contains t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

evidences, the appellant merely states that the payment of ₹ 43 crores is highly unreasonable. Shri Shinde dismissed the evidence gathered during the course of search which shows that expenses have been incurred during the previous year relevant to assessment years 2007-08, 2008-09 and 2009-10 to the tune of ₹ 2191.82 lakhs (50% of total expenses of ₹ 4383.64 lakhs) and made a disclosure of additional income for the previous years relevant to assessment years 2009-10 and 2010-1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ently, 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 wit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sumed to be reflecting in the speed money paid for awarding of contracts for passing the bills. Therefore, to categorize these notings as amounting to speed money paid is wrong. He submitted that Shri D.A. Bhat was only a technical director who was not incharge of the financial transactions and therefore his statement should not be taken as correct. Further, referring to page 178 of the paper book he submitted that Shri D.A. Bhat retracted immediately his statement on 11-10-2009. Referring to pa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

page 34 of the order of the CIT(A) he drew the attention of the Bench to the reply given by the Managing Director Shri R.D. Shinde in his statement recorded u/s.132(4) on 12-10- 2009 during the course of search regarding the amount of ₹ 43.83 crores on account of speed money given for getting the contracts. He submitted that the seized papers cannot be considered as reflecting the payment of speed money and therefore it cannot be presumed u/s.132(4A) that the payments noted in the papers a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncome to A.Y. 2007-08 and 2008-09 which is not correct. He submitted that the AO has increased the income for A.Yrs. 2007-08 and 2008-09 and reduced the income declared by the assessee for A.Yrs. 2009-10 and 2010-11. He submitted that the AO at page 30 and 56 of the assessment order has held that these expenses are incurred out of the bogus expenditure vouchers debited in the accounts and he accordingly increased the business income of the assessee by the above amounts. He accordingly submitted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mpany, 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 b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

elaborate notings cannot be made for projected expenses especially since all amounts match on a yearly basis. The scanned copy of the seized documents at Page 17 of the assessment order passed u/s. 153A for the A.Y .2009-10 shows the tabulation of expenses in two distinct columns "To be paid" and "Already paid:". She submitted that the assessee has been unable to discharge the onus placed upon it to support its contention that such expenses were incurred only in the A.Yrs 200 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rative period of the project the assessee has paid speed money. She accordingly submitted that the order of the CIT(A) be upheld. 97. 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 instant case the AO made the addition on the ground that these loose papers indicate the dates of payments of various amounts as speed money paid to different persons date-wise with the names of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nts actually made but these are projected expenses to be incurred. Further, it is also his contention that the seized papers do 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 the payments indicate speed money. A perusal of the assessment order shows that the AO has not carried out any verification in support his contention that notings conclusivel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dicate speed money/bribe paid by the assessee company to various persons. However, considering the presumption laid down in section 132(4A) of the I.T. Act, since these papers are found with the assessee company, therefore, the AO is justified in holding that the assessee company has paid the amount noted on the seized papers and the CIT(A) is justified in upholding the addition. In this view of the matter and in view of the detailed reasoning given by the CIT(A) we uphold the order of Ld.CIT(A) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rs the AO asked the assessee to give details of outstanding creditors viz, name and address, credit during the year, debit during the year, closing balance and date of payment of outstanding balance in tabularized form. From the various details furnished by the assessee the AO noted that a number of creditors are outstanding for more than 3 years and some creditors are even outstanding for more than 10 years. He, therefore, asked the assessee to shortlist the names of creditors who are outstandi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ook 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ontention with regard to the additions made on the above issue for assessment years 2004-05 and 2006-07. A perusal of the notice issued under section 143(2) dated 19/06/2006 for assessment year 2004-05 during scrutiny assessment indicates that the assessing officer had called for a list of sundry creditors and debtors above ₹ 1,00,000/ - with PAN, address, nature of transaction. In response, the appellant had, vide their letter of 07/07/2006, provided a list of creditors and debtors. Simil .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

issue and had accepted the same. Therefore, the issue of outstanding creditors was already subject to scrutiny during original assessment and it is not the assessing officer's case that they have to be reconsidered on account of incriminating material in reassessment under section 153A. The additions made for assessment years 2004-05 and 2006-07 are deleted. 43. In so far as the additions made in assessment years 2007-08 and 2010-11 are concerned, the question which is required to be answer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee. The Supreme Court in a case related to payment of wages in Bombay Dyeing and Manufacturing Company Ltd. V/s State of Bombay AIR (1958) (SC) 328, 335 has pointed out that the expiry of limitation period only deprives the creditor of his remedy to institute a suit in a court of law but the indebtedness of 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. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ttained a totally different quality. It became a definite trade surplus, Atkinson, J. pointed out that in Morley's case (supra) no trading asset was created. Mere change of method of book-keeping had taken place. But, where a new asset came into being automatically by operation of law, commonsense demanded that the amount should be entered in the profit and loss account for the year and be treated as taxable income. In other words, the principle appears to be that if an amount is received in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

td. (supra), I hold that the provisions of section 41 (1) has been correctly invoked and the amounts of outstanding creditors have rightly been brought to tax under section 41(1) as cessation of liabilities in assessment years 2007-08 and 2010-11, respectively. The principle is particularly applicable in cases of subcontractors and labour suppliers. It is well known that these categories of service providers do not work if payment is not made to them immediately on performance of their part of c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 liabili .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) be upheld. 104. 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. We find the AO in the instant case made addition of ₹ 6,02,856/- u/s.41(1) of the I.T. Act, 1961 on account of outstanding sundry creditors holding that these trade creditors are outstanding for a few years and the liability of the assessee has ceased. We fi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s do not work if payment is not made to them immediately on performance of their part of contracted work. Therefore, the probability that the amounts should be outstanding against sub-contractors and labourers is contrary to normal human and business conduct. He accordingly upheld the addition made by the AO. It is the submission of the Ld. Counsel for the assessee that in view of the subsequent decision of Hon ble Supreme Court in the case of Sugali Sugar Works Pvt. Ltd. (Supra) there is no rea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Supra). We find the Hon ble Supreme Court in the said decision while deciding on the issue of cessation of liability u/s.41(1) of the I.T. Act has observed as under: The respondent-assessee is a private limited company. In the proceedings for assessment of tax for the year ending 30.6.1964 relevant to the Assessment year 1965-66, the assessee transferred a sum of ₹ 3,45,000 out of the suspense account running from 1946-47 to 1948-49 to the capital reserve account. The Income Tax Officer fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ransferring 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. Revis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nded 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." On that reasoning, the High Court answered the question in refer-ence in favour of the assessee. Aggrieved thereby, the Commissioner of Income Tax has preferred this appeal. 2. Learned counsel for the appellant contends that in the facts of the present case, the l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ar, the assessee has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by him, shall be deemed to be profits and gain of business or profession and accordingly chargeable to income tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made in exi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enefit by way of remission or cessation and it should be of a particular amount obtained by him. Thus, the obtaining 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 cor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 1977-78. This fact, to our mind, is very significant. One more notable feature is that the assessee never divulged to the Assessing Officer the details and particulars of the claims deqaite .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat the said judgment has been followed by the Calcutta High Court in Commissioner of Income-Tax, v. Jiajee Rao Cotton Mills Ltd., (1997) 227 ITR 860. There is no separate reasoning in the said judgment and does not take the matter any further. 6. Learned counsel also referred to the judgment of the Bombay High Court in Commissioner of Income-Tax v. Bennett Coleman and Co. Ltd., (1993) 201 ITR 1021. The Bench held that it was difficult to accept the contention of the assessee that cessation of l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y might be sufficient to bring about a cessation of the liability. The Bench also accepted the alternative argument that where an assessee had written off his time barred liability from his accounts and transferred the amount to his profit and loss account thereby treating it as his income, he could not be permitted to turn round when the question of inclusion of such amount in his income under Section 41(1) of the Act arose. The Bench distinguished the judgment in Kohinoor Mills Co. Ltd. v. CIT .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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. Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to be considered by the Division Bench of the Bombay High Court. The said words have been considered by a Full Bench of Gujarat High Court in detail in The Commissioner of Income-tax, Gujarat-II, Ahmedabad v. M/s. Bharat Iron & Steel Industries, Bhavnagar, (1993) Tax L R 188. The following passages in the judgment brings out of the reasoning of the Full Bench succinctly : "11. In our opinion, for considering the taxability of amount coming within the mischief of S. 41(1)of the Act, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

income tax as income of that previous year. 12. We fully agree with the view taken by the Division Bench in C.I.T. v. Rashmi Trading (1977) Tax LR 520 Gujarat (Supra) that the only meaning that can be attached to the words "obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure" incurred in any previous year clearly refer to the actual receiving of the cash of that amount. The amount may be actually received or it may be adjusted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r, no other meaning is possible." we are in agreement with the said reasoning. 8. There is another judgment of the Bombay High Court which was rendered much earlier in J.K. Chemicals Ltd. v. Commissioner of Income-Tax, Bombay City II, (1966) 62 ITR 34. The Bench 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 liabi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

yment 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 presc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lity has come to an end. Apart from that, that will not by itself confer any benefit on the debtor as contemplated by the Section. 11. In the circumstances, we find no merit in this appeal and it is dismissed. There will be no order as to costs. 105.1 We find the Pune Bench of the Tribunal in the case of Hrishikesh L. Joshi (Supra) while deleting the addition u/s.41(1) of the Act, following the above decision and various other decisions has observed as under : 12. Aggrieved with the above decisi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s were not written of by the assessee in the books of the assessee. During the proceedings before us, the assessee filed case laws to support view including the Pune bench decision in the case of M/s Atidab Concrete Pipes and Products Pune vide ITA no 1017/PN/2002 to support the above. Further, counsel stated that the said amounts were written off as the income of the assessee in the year relevant to the AY 2006-07 and therefore, there is no need for any addition during the year under considerat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat 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 hearin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee is dismissed. 109. The assessee has also filed an additional ground which reads as under : The appellant submits that the deduction u/s.80IA(4) should be correctly allowed on additions finally sustained. 110. After hearing both the sides and following the decisions of Hon ble Supreme Court in the case of NTPC Ltd. reported in 229 ITR 383 and Jute Corporation of India Ltd. reported in 187 ITR 688, the additional ground raised by the assessee is admitted for adjudication as no new facts a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made under sec. 69B on account of difference in valuation to the tune of ₹ 4,91,000/-. 113. After hearing both the sides, we find the AO made addition of ₹ 4,91,000/- u/s.69B on the basis of valuation report on account of purchase in land in District Nandurbar. As against the purchase cost of ₹ 1,80,000/- the DVO had valued the same at ₹ 6,71,000/- and accordingly the AO made addit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er : 2. a) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred m allowing deduction under sec. 80IA(4) of ₹ 7,88,92,588/- 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 80IA(13). b) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction under sec. 80IA(4) of & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2,588/-. 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 20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

E OF Pratibha Construction (Engineers & Contractors) India Pvt. Ltd. ITA No.118/ PN/ 08, 119/PN/08, 932/PN/08, 278/PN/10 on 27th September 2011 and held that the contractor is eligible for deduction u/s.80IA(4) of the I.T.Act. The honourable Mumbai High Court also set aside our case to the file of ITAT, Pune for AY.2003-04. Since the issue of deduction of claim u/s. 80IA(4) is decided by jurisdiction at ITAT, Pune, the deduction u/s. 80IA(4) be allowed for A Y.2003-04 to 2011-12. During the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ver and turnover of eligible project, the proportionate claim u/s. 80IA(4) is worked out as under A.Y. Claim 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 Exp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see challenged the matter before the Hon ble High Court. The Hon ble High Court had set aside this issue to the file of the Tribunal and subsequently the Tribunal vide ITA No.433/PN/2006 has decided the issue in favour of the assessee. The appeals for A.Yrs. 2004- 05 & 2005-06 have been set aside by the Hon ble High Court to the file of the Tribunal and the matter for A.Y. 2006-07 is pending before the Tribunal. It was submitted that since Chapter VIA deduction is allowed against undisclosed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e of the CIT(A) in respect of the contention that even if it was to be considered for the claim for the first time, the appellate authorities had the discretion to admit such fresh claim. Finally, it was contended that if in this proceedings the year of taxation of unexplained expenses and undisclosed income was held to be in the assessment year, i.e. 2007-08 and 2008-09, then the additional deduction claimed u/s.80IA(4) should also be allowed for these years. 118. The assessee in an alternate c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dvanced by the assessee the Ld.CIT(A) decided the issue in favour of the assessee by observing as under : 91. I have given careful consideration to the submission of the appellant with reference to the facts of the case. I have also perused the various case laws cited by the appellant in its detailed submission. The controversy pertains to the issue of whether deduction u/s.80IA(4) is allowable to the appellant in view of Explanation below section 80IA which denies exemption to a works contracto .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ucture 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Central or State Act; (b) It has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility; (c) It has started or starts operating and maintaining the infrastructure facility on or after the Ist day of April, 1995: Provided that where an infrastructure facility is transferred on or after the Ist day o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enterprise as if it were the enterprise to which this clause applies and the deduction from profits and gains would be available to such transferee enterprise for the unexpired period during which the transferor enterprise would have been entitled to the deduction, if the transfer had not taken place. Explanation:- For the purposes of this clause, "infrastructure" means - (a) A road including toll road, a bridge or a rail system (b) A highway project including housing or other activiti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

referred to in sub-section (4) which is in the nature of a works contract awarded by any 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l 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 be fulfilled. However, the provision of clause (c) would apply only to such enterprises engaged in maintaining and operating the infrastructure as held in the case of CIT v. ABG Heavy Industries Ltd. [2010] 322 ITR .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

said activity for the assessment years 1996-97and is eligible for deduction under the erstwhile sub-section (4A)and will continue to be eligible for deduction under sub-section (4). Sub section (4A) was removed with effect from the assessment year 2000-01 by the Finance Act, 1999 and simultaneously a new sub section (4) was introduced which extended deduction to such enterprises which develop infrastructure or which maintain and operate infrastructure facility or which develops, maintains and op .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t, only, it is the Government who will make payment to assessee in respect of infrastructure facility developed by it in terms of agreement so entered with Government. Thus, there does not appear to be any infringement of conditions for claim of deduction u/s 80IA(4) when the Government has made payment to the assessee in respect of the project of infrastructure development undertaken by it in terms of respective agreement entered into with Government. 94. Today, the controversy revolves around .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d 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 o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for the persons who merely execute the civil construction work or any other works contract. The incentive has all along been intended to benefit developers who undertake entrepreneurial and investment risk and not contractors who only undertake business risk. 34.3 Accordingly, it has been clarified by inserting an explanation that the provisions of section 80-IA shall not apply to a person who executes a works contract entered into with the undertaking or enterprise referred to in the said secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e effect retrospectively from April 1, 2000 and will, accordingly, apply in relation to the assessment year 2000-01 and subsequent assessment years. 95. While the contractors who execute complicated and large infrastructure projects on behalf of various State and Central Governments unanimously claim to be a developer entitled to deduction under section 80IA(4), the Department has been consistent in its stand that a contractor is not a developer and hence is not entitled to claim deduction under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

issues before them were - (i) whether the contractor is synonymous with the developer within the meaning of section 80IA(4)(i) of the Act; and (ii) whether the condition placed in clause (c) is applicable to the case of a developer, who is not carrying on business 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). I .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ry 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 the condition at sub clause (c) which is an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mon in all the four appeals is allowed in favour of the assessee. 97. Similarly, the ITAT, Pune Bench "A" vide order dated 27-09-2011 in the case of Pratibha Constructions and Engineers Ltd. v. ACIT [ITA No. 118/PN/08 (AY 2003-04), ITA No. 119/PN/08 (A Y 2004-05), ITA No.932/PN/08 (AY 2005-06) and ITA No. 278/PN/10 (AY 2006-07)] has held that the issue raised by the revenue that the assessee has acted only as a contractor who has been awarded work by a Government Agency and, therefore, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

-Bench in the case of Patel Engg. Ltd. v. Dy. CIT [2005J 94 ITD 411 (Mum.) has held that the term "contractor" is not essentially contradictory to the term "developer". It was held that a person who has undertaken the contract for development is not only a contractor but is also a "developer" eligible deduction under section 80IA(4) of the Act. It was further held that the term 'contractor' is not necessarily contradictory to the term 'developer'. On .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pment 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e eligible for deduction and its subsequent substitution with retrospective effect from 01-04-2000 by the Finance Act, 2009 which added that those enterprises undertaking works contracts by entering into agreements with the enterprises or with the government or government organizations would not be eligible for deduction has been considered by the Hon ble ITAT, Hyderabad Bench 'A' in the case of KMC Constructions Ltd. v. ACIT, Circle-2(2) [2012] 21 taxmann.com 138 (Hyd.). In this case ju .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

manner- Whether the assessee is a developer or works contractor is purely depends on the nature of the work undertaken by the assessee. Each of the work undertaken has to be analyzed and a conclusion has to be drawn about the nature of the work undertaken by the assessee. The agreement entered into with the Government or the Government body may be a mere works contract or for development of infrastructure. It is to be seen from the agreements entered into by the assessee and the Government. We f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le to use the facility even while the process of development is in progress. Any loss to the public caused in the process would be the responsibility of the assessee. The assessee has to develop the infrastructure facility. In the process, all the works are to be executed by the assessee. It may be laying of a drainage system; may be construction of a project; provision of way for the cattle and bullock carts in the village; provision for traffic without any hindrance, the assessee's duty is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es 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 infrastructu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n under section 80IA(4) of the Act. This cannot be considered as a mere works contract but has to be considered as a development of infrastructure facility. It was finally held- Therefore, in our considered view, the assessee should not be denied the deduction under section 80IA of the Act as the contracts involve development/construction, operating/maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract. In ou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

YD), Bench 'B' of the ITAT Hyderabad in GVPR Engineers Ltd. v. ACIT, Circle - 2(3), Hyderabad [2012] 21 taxmann.com 35 (Hyd.). 102. The issue availability of deduction under section 80IA(4) to a 'developer' vis a vis a 'works contractor' was discussed in the case of Chettinad Lignite Transport Services (P) Ltd., in ITA No. 1179/Mds/08 who vide order dated 26th February, 2010, subsequently followed for assessment years 2007-2008 & 2008-09 in ITA Nos. 1312 & 1313/Md .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he persons who merely execute the civil construction work or any other work contract has been encouraged 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 C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

elopment, 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. If the interpretation done by the Assessing Officer is accepted, no enterprise carrying on the business of only developing he infrastructure facility would be entitled to deduction under section 80 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

evelopment infrastructure facility. Ostensibly, a developer would have income only if he is paid for the development of infrastructure facility, for the simple reason that he is not having the right/ authorization to operate the infrastructure facility and to collect toll there from, has no other source of recoupment of his cost of development. While filing the return, the assessee had made claim under section 80IA(4) of the Act. 104. The Jaipur Bench 'A' of the ITAT has vide order dated .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt and parts of the gate, which would provide drinking water and irrigation facilities to certain parts in Maharashtra State. The assessing officer denied deduction under section 80IA(4) to the assessee in view of the insertion of Explanation by the Finance Act, 2007 and its subsequent substitution by the Finance Act, 2009 with retrospective effect from 01-04-2000. The CIT(Appeal) upheld the order of the assessing officer. In appeal the Hon 'ble Tribunal held- In view of all these facts and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

80IA by the Finance (F.No.2) Act, 2009 with retrospective effect from 01/04/2000 was specifically brought to the notice of the Honourable ITAT in appellant's own case in ITA No. 433/PN/2007. It was thus contended on behalf of the Department that in view of the substituted explanation, nothing contained in section 80IA will apply in relation to a business referred to in sub-section (4) which is in the nature of works contract awarded by any person (including Central or State Government) and e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the matter to the file of the Tribunal for fresh decision on the issue in accordance with law. On earlier occasion the Tribunal had decided the issue in favour of the Revenue by relying upon the decision of Third Member Bench of the Tribunal in the case of B.T. Patil & Sons Belgam Construction (P) Ltd vs. ACIT 126 ITJ (Mum)(TM) 577. The Hon'ble High Court has observed that it is not in dispute that the said decision of the Tribunal in the case of B.T. Patil & Sons (supra) has been r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the assessee by Hon'ble Bombay High Court in the case of CIT vs. ABG Heavy Industries Ltd & Ors (supra). Relevant Para Nos. 22 & 23 of the said decision of the Hon'ble High Court is being reproduced here under for a ready reference. 22. Another submission which was urged on behalf 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 af .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ntaining 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 ma .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as 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 en .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ngaged in (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining an infrastructure facility was reflective of a position which was always construed to hold the field. Before the amendment that was brought about by Parliament by Finance Act of 2001, we have already noted that the consistent line of circulars of the Board postulated the same position. The amendment made by Parliament to sec. 80-IA(4) of the Act set the matter beyond any controversy by sti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n '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 d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

velops or operates and maintains; or develops, maintains and operates that infrastructure facility. In the words of the Hon'ble Hyderabad ITAT in KMC Constructions Ltd. (supra) "the term 'contractor' is not necessarily contradictory to the term 'developer'. On the other hand, rather section 80IA(4) itself provides that assessee should develop the infrastructure facility as per the agreement with the Central Government, State Government or a Local Authority. So, entering .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the infrastructure facility/project by the developer to the Government or authority takes place after recoupment of the developer's costs whether it be "BT' or 'BOT' or 'BOOT'. In 'BOT' and 'BOOT' model recoupment is by way of collection of toll or tithe or revenue there from whereas in 'BT' it is by way of periodical payment by the Government/Authority. The land involved in infrastructure facility/project always belongs to the Government/Loca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hen as held in various decisions cited above, the contracts entered into by the assessee cannot be called simple works contract so as to deny the deduction available under section 80IA(4). The appellant has claimed deduction under section 80IA(4) in respect of various projects undertaken due to a valid contract entered into with the State Government. The additional claim is in respect of increased business income found as a result of search and seizure operation and largely pertains to income fr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es and took responsibility of developing infrastructure facility. The infrastructure facility is still under development. Under such circumstances, it is the overwhelming opinion in majority of the decisions of various benches of the Honourable ITAT and especially of the jurisdictional Tribunal in the case Laxmi Civil Engg.(supra), Pratibha Constructions and Engineers Ltd. (supra) and appellants own case (supra), that the developer of the infrastructure facility cannot be denied the benefit of d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

te against the assessee in its entitlement for deduction u/s.80IA(4). 109. The deduction under section 80IA(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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al or the High Court as the case may be. However, in respect of new claim made by the appellant including additional claim on account of declaration of unexplained business expanses, as held in the preceding paragraphs, the deduction claimed by the appellant is allowed on prorata basis i.e. proportionate deduction is allowed to the appellant. 110. The additional claim under section 80IA4 was made by the appellant for assessment years 2007-08 to 2010-11 in respect of the additional business incom .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

during the course of search and seizure is not insulated from the provisions of section 80IA(4) and an assessee is entitled to make the claim as long as it remains the business income of an assessee who is entitled to make the claim under this section. Recently, the Honourable Bombay High Court in the case of CIT(Central)-II V/s Sheth Developers Pvt. Ltd. in ITA No.3724 of 2010 dated 27/07/2012 have held in the context of assessment of undisclosed income in Chapter XIV B of the Income-tax Act t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r and Boards Ltd. [2009] 314 ITR 119 has held that deduction under section 80IA is available in respect of undisclosed incomes 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 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n 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 expenses from unexplained sources which attract provisions of section 69C. Therefore, the CIT(A) was not justified in allowing deduction u/s.80IA(4) on such additional income. She accordingly su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to ₹ 7,88,92,588/-. The AO following the order of the Tribunal in assessee s own case for the preceding assessment year and holding that the assessee is only a contractor and in view of Explanation to section 80IA(4) it is not entitled to deduction u/s.80IA(4) rejected the claim. Relying on various decisions filed in the paper book he submitted that in the following decisions the Tribunal has allowed the claim of deduction u/s.80IA(4) on irrigation contracts : 1. Laxmi Civil Engineering P .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2 in ITA No.433/PN/2007 following the decision of Hon ble Bombay High Court in the case of ABG Heavy Industries Ltd. reported in 322 ITR 323 has allowed the claim of deduction u/s.80IA(4). Since the issue has been decided by the Tribunal in assessee s own case for A.Y. 2003-04 and further since the Ld.CIT(A) has also relied on various decisions under identical facts and circumstances, therefore, the claim of deduction u/s.80IA(4) is justified and the order of the CIT(A) has to be upheld. 125. So .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he 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 i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Court in the case of CIT Vs. Sheth Developers Pvt. Ltd. reported in 254 CTR 127 and the decision of the Pune Bench of the Tribunal in the case of Malpani Estates Vs. ACIT vide ITA No.2296 to 2298/PN/2012 order dated 30-01-2014 for A.Y. 2008-09 to 2010-11. In all these cases the question involved was regarding deduction u/s.10A or Chapter VIA and it was held that if because of the addition made in the assessment, the income goes up, the deduction should be granted on such enhanced income. Accord .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gures of additional income offered by the asessee in each of these years. Thus, the additional deduction u/s.80IA(4) has to be given in every year considering the additions sustained by the CIT(A). However, since there is a mistake committed by the CIT(A) while calculating the deduction he submitted that a direction may be given to the AO to allow the correct deduction which will cover the additional ground. He submitted that the assessee has filed a chart during the course of hearing in which t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h 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. We find the assessee, in the return filed in response to notice u/s.153A, had claimed deduction u/s.80IA(4) amounting to ₹ 7,88,92,588/-. 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 Jurisdicti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

decision of the Tribunal in the case of B.T. Patil & Sons (supra) has been recalled by the Tribunal by order dated 18.2.2011 as evident from the order passed by the Tribunal in ITA No.766/PN/2009 dated 8.6.2011. The Hon ble High Court has accordingly quashed and set aside the impugned order of the Tribunal dated 24.2.2010 passed in ITA No.433/PU/2003 relating to AY 2003- 04, and has restored the matter to the file of the Tribunal for fresh decision. 8. Having gone through the cited decisions .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rt operating and maintaining the infrastructure facility on or after 1st April, 1995. The same requirement is embodies in sub-cl. (c) of sub-sec. (4) of the amended provisions of sec. 80-IA. 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

i) 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ould lead to the conclusion that the deduction is available to an enterprise which (i) develops; or (ii) operates and maintains; or (iii) develops, maintains and operates that infrastructure facility should be after 1st April, 1995. In the present case, the assessee clearly fulfilled this condition. 23. In view of which we have taken, all the assessment years in question to which this batch of appeals relates would be governed by the same principle. The subsequent amendment of sec. 80-IA(4A) of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ec. 80-IA(4) of the Act set the matter beyond any controversy by stipulating that the three conditions for development, operation and maintenance were not intended to be cumulative in nature. 9. We find from the decision of Hon ble Bombay High Court in aforesaid case of CIT vs. ABG Heavy Industries Ltd & Ors (supra) that even in the case before the Hon ble High Court, the assessee acted as a contractor for Government agency, was held eligible for the purposes of claim of deduction u/s 80-IA( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee, 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 sec. 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)( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 assesse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd the paper book filed on behalf of the assessee. We find the assessee in the instant case filed his return of income u/s.139(1) on 31-10-2007. The search took place on 06-10-2009. At the time of search the assessment for the impugned assessment year was not completed. The assessee filed the return of income in response to notice u/s.153A on 24-06-2010 disclosing total income of ₹ 12,80,97,695/- after claiming deduction of ₹ 5,36,44,728/- u/s.80IA(4) of the I.T. Act. The AO disallow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The relevant observation of the Tribunal from para 9 onwards read as under : 9. We have carefully considered the rival submissions. In this case, search u/s 132(1) of the Act was carried out on 18.12.2008. On the basis of the second proviso to section 153A(1) of the Act, which reads as under :- "Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this [sub-section] pending on the date of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he aforesaid proviso to section 153A(1) of the Act. The aforesaid position is not disputed 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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gs 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 2006-07. Ostensibly, as observed earlier on the basis of the decision of Special Bench of Tribunal in the case of All Cargo Global Logistics Ltd. (supra), an assessment u/s 153A(1)(b) for the assessment years 2003-04 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessment envisaged u/s 153A(1)(b) of the Act for assessment years 2003-04 and 2006-07. Therefore, on this point itself, we uphold the stand of the Revenue for assessment years 2003-04 and 2006-07 in denying assessee's claim for excluding income on account of retention money. 11. Accordingly, the appeals of the assessee for assessment years 2003-04 and 2006-07 are dismissed. 12. Now, in so far as the assessments for assessment years 2007-08 and 2008- 09 are concerned, the original assessme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

153A(1)(b) of the Act for assessment years 2007-08 and 2008-09 can include consideration of assessee's plea to exclude income on account of retention money, considering the fact the returns of income filed by the assessee for assessment years 2007-08 and 2008-09 u/s 139(1) of the Act did not contain any such claim. In the assessments u/s 153A(1)(b) of the Act, assessee claimed that income on account of retention money be excluded in the years when the customers had withheld the retention mon .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g, 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. W .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

course of exercising his original jurisdiction to make an assessment u/s 143(3) of the Act. Now, consequent to search action, for assessment years 2007-08 and 2008-09, Assessing Officer not only acquires jurisdiction to make additions based on the incriminating material but also retains the original jurisdiction, as explained by the Special Bench of Tribunal in the case All Cargo Global Logistics Ltd. (supra). Thus, the ensuing assessments u/s 153A(1)(b)of the Act for assessment years 2007-08 an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Act and was not made in the returns of income originally filed u/s 139(1) of the Act. 14. For the assessment years 2007-08 and 2008-09, another objection raised by the Revenue is to the effect that the claim was not made in the return of income filed in response to notice issued u/s 153A(1)(a) of the Act, but was submitted by way of a letter during the assessment proceedings and therefore following the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT, ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

because the quantification of the claim could not be made in the limited time period allowed to file a return in response to notice u/s 153A(1)(a) of the Act. In the course of the subsequent assessment proceedings, assessee quantified the claim for the respective assessment 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& .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e 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 explained on the basis of the j .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he return of income. In fact, the Hon'ble Delhi High Court in the case of CIT v. Jai Parabolic Springs Ltd. 306 ITR 42 (Del) supports the proposition that the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) was limited to the power of the Assessing Officer to entertain claim for deduction otherwise than by a revised return and does not put fetters on such powers of the appellate authorities." 16. On the basis of aforesaid, it is sought to be made out .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Goetze (India) Ltd. (supra) opined that a fresh claim of the assessee can be entertained at the time of assessment only if it is made by way of a revised return of income; and, the aforesaid proposition has been invoked by the income-tax authorities in the present case to deny assessee's claim for exclusion of income on account of retention money, a claim which was made during the assessment proceedings. 19. Factually speaking, we find that in terms of a communication dated 14.09.2009 filed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 wh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

completing assessment. We shall submit the necessary details and quantification of claim during the course of assessment." 20. The aforesaid Note clearly depicts the claim of the assessee to the effect that the retention money in various contracts retained/deducted by the customers is not taxable; and, various case laws have also been cited, including that of the Hon'ble Jurisdictional High Court of Bombay in Associated Cables (P) Ltd. (supra) in support of the said proposition. Of cour .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t the assessee made a fresh claim during the assessment proceedings so as to fall within the purview of the ratio laid down by the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra)? In our view, the fact situation in the present case is qualitatively different than that considered by the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra). Ostensibly, the assessee company made a claim for excluding income on account of retention money in the return of income i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t in the case of Goetze (India) Ltd. (supra). 21. In any case, the judgement of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) does not impinge on the powers of appellate authorities to entertain a fresh claim which was hitherto not preferred by the assessee in the return of income, as explained by the Hon'ble Delhi High Court in the case of Jai Parabolic Springs Ltd. (supra). Accordingly, there was no impediment for the CIT(A) to have entertained the impugned claim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 3 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ending on the data of search, therefore, respectfully following the decision of the coordinate bench of the tribunal cited (supra) we hold that the CIT(A) was not justified in rejecting the claim made u/s.80IA(4) of the I.T Act merely because the assessee had not made the claim in the original return. We accordingly set aside the order of the CIT(A) on this issue and the grounds raised by the assesse are allowed. 131. Identical issue has also been decided by the Hon ble Bombay High Court in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

IA(4) on the additional income declared during the course of search is concerned we find the same issue has also to be decided in favour of the assessee. It is an admitted fact that the assessee company has debited non genuine expenditure in its books of account and generated cash, a fact which has been accepted by the AO in the assessment order. Therefore, the contention raised by the revenue in the grounds of appeal that the addition on account of expenses from unexplained sources attracts pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

u/s.80IA(4) has to increase correspondingly. 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 pu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bution 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 Commissioner of Income Tax v. Alom Extrusions Limited4 the employer's contribution was liable to be allowed, since it was deposited by the due date for the filing of the return. The peculiar position, however, as it obtains in the present case arises out of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stified in directing the Assessing Officer to grant the exemption under Section 10A. On this position, in the present case it cannot be disputed that the net consequence of the disallowance of the employer's and the employee's contribution is that the business profits have to that extent been enhanced. There was, as we have already noted, an add back by the Assessing Officer to the income. All profits of the 4 (2009) 319 ITR 306 unit of the assessee have been derived from manufacturing a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y the Assessing Officer is an increase in the business profits of the assessee. The contention of the Revenue that in computing the deduction under Section 10A the addition made on account of the disallowance of the Provident Fund / ESIC payments ought to be ignored cannot be accepted. No statutory provision to that effect having been made, the plain consequence of the disallowance made by the Assessing Officer must follow. The second question shall accordingly stand answered against the Revenue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a) The respondent-assessee carries on business as builders in Mumbai and Thane. On 21/2/2002, the Income Tax Department carried out search operation under Section 132 of the said Act covering the residential and business premises belonging to the respondentassessee s group. During the course of the search proceedings the respondent s Director declared the undisclosed income of the group at ₹ 7.00 crores for the block period. However, in the return filed for the block period 1/4/1995 to 21/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rector of respondent was unaware that deduction under Section 80IB would be available in respect of respondent s housing projects. The CIT(A) by order dated 17/8/2004 found on facts that the respondent was entitled to benefit of Section 80IB of the said Act. Further, CIT(A) held that in terms of clause (a) of the explanation to Section 158(BB)(1) of the said Act provides that undisclosed income for the block period is to be computed after applying the relevant provisions of the said Act. This wo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2/10/2009 upheld the order of the CIT(A).On merits, the Tribunal held that the benefit of deduction under Section 80IB of the said Act would be available in respect of undisclosed income which is being 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 6 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 the head of profits and gains of business or profession and therefore, no deduction is available. On t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s no question of application of Section 68, 69 and 69A 69B and 69C of the said Act arises as the same has not been invoked by the appellant- revenue. Further the amount of undisclosed income was neither in the nature of unexplained investment nor unexplained money, expenses or investment which were not fully disclosed. It is an admitted position between the parties as reflected even in the order the Assessing officer that undisclosed income was in fact received by the respondent in the course of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

termining the undisclosed income under Chapter XIVB of the said Act. 9. Before considering the rival submissions, it would be convenient to reproduce the amended Explanation to sub section (1) of Section 158BB of the said Act which reads as under: Explanation- For the purposes of determination of undisclosed income- (a) the total income or loss of each previous year shall, for the purpose of aggregation, be taken as the total income or loss computed in accordance with the provisions of [this Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

trospective 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

effect from 1/7/1995 the total income or loss has to be computed in accordance with the provisions of this Act i.e. the said Act. Consequently, with effect from 1/7/1995 the total income/loss for the block period has to be computed in accordance with the provisions of the said Act and the same would include Chapter VI-A of the said Act. Section 80IB of the said Act is a part of Chapter VIA of the Act. In view of the above, while computing the undisclosed income for the block period the responden .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

session of the respondent assessee could not be explained and/or its source could not be explained to the satisfaction of the Assessing Officer. In the present case undisclosed income found in the form of cash was explained as having been acquired while carrying on business as a builder and this explanation was accepted by the Assessing officer by having assessed the undisclosed income for the block period as income from profits and gains of business or profession. Therefore, the reliance by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed by the respondent in the course of carrying out its business activities as a builder. The same was returned by the respondent as income arising from profits and gains of business or profession and the same was accepted by the department unlike in the matter of Fakir Mohmad Haji Hasan (supra). 12. In view of the above the order dated 12/10/2009 of the Tribunal cannot be faulted. Therefore, question (1) above is answered in the affirmative in favour of the respondent-assessee and against the ap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n. 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

question is derived from the housing project, The Crest at Pimple Saudagar, Pune, which is eligible for section 80IB(10) benefits, such an income merely goes to enhance the business income derived from the eligible housing project and shall be entitled for section 80IB(10) benefits, even as per the ratio of the judgment of the Hon ble Bombay High Court in the case of Gem Plus Jewellery India Ltd. (supra). 19. In the result, on the basis of the aforesaid legal position and the material and evide .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncome. In this view of the matter and in view of the detailed reasoning given by the CIT(A) on this issue we find no infirmity in his order. Accordingly, the same is upheld. However, as per the additional ground raised by the assessee, there seems to be some calculation error while computing the deduction u/s.80IA(4). We, therefore, direct the AO to recompute the correct deduction as per law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hed 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, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Finvest & Agro (P) Ltd. reported in 118 TTJ 68 disallowed cost of depreciation on ₹ 29,23,912/-. Similarly ₹ 15,92,976/- for A.Y. 2008-09, ₹ 3,51,621/- for A.Y. 2009-10 and ₹ 6,73,517/- for A.Y. 2010-11 was disallowed by the AO. 140. In appeal the Ld.CIT(A) following his decision in the case of M/s. Chhapalkar Brothers for A.Y. 2008-09 determined the various components which go to make up the case of the windmill, the details of which are as under : 141. Accordingly, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r miscellaneous expenses will be apportioned on prorata basis between windmill and infrastructure facilities. 49. It was submitted by the appellant that the details of separate cost of foundation were not available with them. However, they have provided me with a copy of estimate for construction of the tubular foundation which includes the civil work, ancillary work, cost of material used and the margins taken by the supplier Suzlon in respect of valuation done by the DVO as on 31/03/2006. I di .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Electrical items, components of RE device 3. Cost of tubular tower 4. Cost of work including foundation work 5. Labour related cost a) Installation of windmill 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) Frank .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The Ld. Departmental Representative strongly supported the order of the AO. 144. The Ld. Counsel for the assessee on the other hand referring to the decision of the Tribunal in the case of DCIT Vs. J-Sons Foundry Pvt. Ltd. vide ITA No.2349/PN/2012 order dated 28-01-2014 submitted that under identical facts and circumstances the directions given by the CIT(A) for computing the depreciation on windmill has been upheld and the grounds raised by the Revenue have been dismissed. He accordingly submi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ll. The relevant observation of the Tribunal at para 5 of the order reads as under : 5. In sum and substance the Tribunal upheld the action of the Assessing Officer to restrict the depreciation @ 10% on some items but allowed the depreciation @ 80% on the cost of foundation as well as cost incurred on erection and commissioning of the Wind Mill. The Tribunal also held that cost incurred on installation of Wind Mill is an integral part of the Wind Mill and the assessee should be allowed depreciat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oundry Pvt. Ltd. (Supra) we find no infirmity in the order of the CIT(A) allowing higher depreciation @80% on civil work foundation and related labour cost of windmill. Ground raised by the Revenue is accordingly dismissed. 147. Ground of appeal No, 4 by the Revenue reads as under : 4. 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, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arties 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 30-01-2008 and 29-04-2008 by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

essee the Ld.CIT(A) deleted an amount of ₹ 75 lakhs by observing as under : 71. I have given a consideration to the appellant's contentions and examined the contents of the relevant pages from the Bhat documents very minutely. The date of tender is 11/09/2006. Page no. 34 shows that an amount of ₹ 13.3763 crores was paid to several persons on or before 16-06-2007 On this page, the amount paid by B T Patil and Sons is shown at ₹ 3 crores with the narration "cheque and c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt's claim that cheque payments in pre-tender amounts are included in the unexplained expenses is correct then, the pretender amount should have been written as ₹ 5 crores being the amount paid by Mahalaxmi Construction Corporation Ltd., B T Patil and Sons and AB, prior to the tender date. The appellant has provided a copy of account of Goofy Graphics with Mahalaxmi Construction Corporation Ltd. This shows that a loan of ₹ 1.50 crores was advanced to Goofy Graphics on 28/07/2006 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 chequ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is a running account that Shatmurti Reality Pvt. Ltd. had with Goofy Graphics belonging to Shri Kale. On 28/07/2006 there are entries of ₹ 1.5 crores and ₹ 50 lakhs given as loan by Shatmurti Reality Pvt. Ltd. to Goofy Graphics. However, these amounts do not appear in the pretender amount on pages no. 38 and 18 which, as mentioned earlier, only shows an amount of ₹ 1.5 crores as pre-tender amounts paid to Shri Kale. Even the contra entry pertaining to reversal of ₹ 2 cror .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e in the realm of possibilities, every circumstance, every fact, every instance is pregnant with variety of possibilities. However, a court or tribunal or a statutory body invested with the duty and obligation to weigh the materials before it and record findings with regard to the controversiesquestions, is required to weigh such materials on the test of probabilities rather than on the test of remote possibilities. It is the material on the record, and that material alone, which can afford guid .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

show that the total amount expended is reduced by an amount of ₹ 1.50 crores. Since we are relying entirely on the contents of the Bhat documents to draw an inference of unaccounted expenses, it will reasonable to assume that the reduction on account of payments made to Shri Kale is on account of cash entries which might have crossed out the cheque entries for payments made by B T Patil and Sons. Since the seized documents do not show the pretender amount to be more than ₹ 1.50 cror .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he 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 poi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and 6 by the assessee being general in nature are dismissed. The Ld. Counsel for the assessee did not press ground of appeal No.5 for which the Ld. Departmental Representative has no objection. Accordingly, the same is dismissed as not pressed . 154. Ground of appeal No. 2 to 2.6 by the assessee relate to addition of ₹ 14,55,04,497 on account of disallowable expenses as per seized papers in respect of Ghodzari project which has been confirmed by the CIT(A). 155. After hearing both the side .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cost at the rate applicable to the building as against 60% claimed by the assessee. 157. After hearing both the sides, we find the above ground is identical to the grounds of appeal No.4 to 5 in ITA No.2574/PN/2012 for A.Y. 2007-08. We have already decided the issue and the grounds raised by the assessee have been dismissed. Following the same reasonings, the above ground raised by the assessee is dismissed. 158. The assessee has also taken an additional ground which reads as under : The appell .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

purposes. ITA No.54/PN/2013 (By Revenue) (A.Y. 2008-09) : 160. 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 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce 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 aggregating ₹ 94,17,652/-. After considering the explanation of the assessee that the Jeur Tunnel Project was jointly executed by the assessee and M/s. B.T. Patil and sons, the AO added 50% of such expenses being the assessee s share amounting to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lation of bank guarantee cost and does not have any financial implication. Without prejudice to the above, the assessee submitted that set off of the additions made above be given against the additional income declared on account of omission and mistake and which is shown as contingency in source and application statement. 165. Based on the arguments advanced by the assessee, the Ld.CIT(A) deleted the addition by observing as under : 68. I have carefully considered the submissions of the appella .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ries shown in these papers it was not possible for them to verify the entries with the entries in the books of account. Hence it was put that theoretical entries could pertain to a period even prior to 01/04/2002. (ii) Expenses on pages 4 and 5 on projects were not actually incurred. (iii) The appellant does not concur with the notings on loose papers and diaries from Shri D A Bhat's residence. (iv) Page no. 7 is an estimation of cost which do not have any final implication. 69. I have gone .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 require .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2010-11 and thereafter work out the expenses incurred on the basis of these papers. The contention of the appellant regarding allowing a set off of these expenses from amounts declared on account of omissions and mistakes shown as contingency is accepted and the assessing officer is directed to account for these expenses in source and application for the relevant assessment year and tax the amount only if no source is available. 166. Aggrieved with such order of the CIT(A) the Revenue is in appe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d have proved beyond doubt that the papers did not pertain to the period under consideration, therefore, the CIT(A) was not justified in deleting the addition made by the AO. 168. The Ld. Counsel for the assessee on the other hand while supporting the order of the CIT(A) submitted that the assessee has declared additional income of ₹ 1,86,04,479/- in Mahalaxmi Infra Projects Ltd., and R.D.S. Construction Company as contingency in total declaration of ₹ 31 crores. The assessee also re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re is no reason to make the addition. Accordingly, the direction of the Ld.CIT(A) is justified. 169. 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 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ogic 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) on this issue and the ground raised by the revenue is allowed. 170. Ground of appeal No.3a a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

duction under sec. 80IA(4) of ₹ 67,33,791/- 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). 171. After hearing both the sides we find the above grounds by the revenue are identical to ground of appeal No.2a and 2b by the Revenue in ITA No.53/P/2013 for A.Y. 2007-08. We ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Ground of appeal No.3 and 3.1 by the assessee reads as under : 3] The Ld.CIT(A) erred in confirming an addition of ₹ 58,85,436/- on account of undervaluation of WIP. 3.1] The Ld.CIT(A) failed to appreciate that as per the method of accounting followed by the assessee, the material purchased by the asessee was expensed out in the books by the assessee and hence, there was no reason to include the same in the closing WIP. 174. After hearing both the sides, we find the facts regarding additio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o 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 acc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ciation at the rate applicable to building and not at the rate applicable to windmill. 4.1] The Ld.CIT(A) failed to appreciate that the expenditure on Power Evacuation facility and infrastructure cost was part and parcel of windmill and hence, the entire expenditure was entitled to depreciation at a higher rate which was available to windmill. 5] The Ld.CIT(A) erred in directing to apportion the other misc. expenses between windmill cost and infrastructure cost without appreciating that all the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see are dismissed. 177. Ground of appeal No.6 by the assessee reads as under : 6] The learned CIT(A) erred in holding that the interest u/s.234A was leviable for the period from 31-10-2009 to 20-07-2010 without appreciating that as per law, no interest was leviable for that period. 178. Facts of the case, in brief, are that the assessee during appeal proceedings before the CIT(A) challenged the levy of interest u/s.234A for the period from 31-10-2009 on 20-07-2010 on the ground that the search a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

179. However, the CIT(A) was not convinced with the arguments advanced by the assessee. He observed that there is nothing in section 153A or 139 which allows the AO to extend the time limit for filing of income-tax returns during the regular course. According to the CIT(A), if the contention of the assessee is accepted, then even if the assessee 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 yea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d 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 asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the time limit prescribed in the section. Therefore, when the notice u/s.153A was served on the assessee on 06-07-2010 asking the assessee to furnish the return of income within 30 days from the receipt of notice and when the assessee has filed its return of income on 21-07- 2010, i.e. within the prescribed period of 30 days, therefore, there is no justification for levy of interest u/s.234A. 182. The Ld. Departmental Representative on the other hand heavily relied on the order of the AO and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9-2009 the due date for filing of the return u/s.139(1) has not expired. Since the search has taken place the assessee was precluded from filing return u/s.139(1). The assessee in response to notice u/s.153A served on him on 24-06-2010 has filed the return on 21-07-2010 which is within the period of 30 days which is granted by the AO. Therefore, there is no question of levy of any interest u/s.234A. 184. We find the provisions of section 153A read as under : 153A. [(1)] Notwithstanding anything .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 requisiti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the assessee shall be liable to pay simple interest at the rate of [one] per cent, for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time allowed as aforesaid, and,- (a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or (b) where no return has been furnished, ending on the date of completion of the re-assessment or re- computation under section 147[ or reass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sal thereof would indicate as to how a non obstante clause has been inserted and with a defined intent. One would find that in section 139 of the IT Act, the return of income is contemplated. These provisions fall in Chapter XIV entitled "Procedure For Assessment". Section 139 deals with return of income whereas section 140 states that such return has to be verified. Section 147 which also falls within this Chapter deals with income escaping assessment and section 148 provides for issu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

count, other documents or any assets are requisitioned under section 132A after 31st day of May, 2003, that the Assessing Officer is in a position to and mandated to issue notice within the meaning of sub-section (1) of section 153A. That is because the preceding Chapter, namely, Chapter XIII within which the powers of search and seizure and powers to requisition books of account are spelt out enable the Revenue to take care of cases where it effects a search and seizure. That search and seizure .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s to be made. 187. A combined reading of the above provisions as well as the decision cited (Supra) indicates 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rest payable u/s.234B. 189. After hearing both the sides, we find an amount of ₹ 2,05,00,000/- was seized at the time of search. The AO apportioned the cash seized in March 2011 and levied interest u/s.234B till the said date. 190. Before CIT(A) the assessee submitted that the AO had not appreciated that the cash was seized on 12-10-2009 and hence the credit should have been given from this date. However, the CIT(A) did not accept the contention of the assessee and held that credit cannot .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

terest u/s.234B has been correctly charged and computed by the AO. 191. Aggrieved with 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 th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 credit of the seized cash towards advance tax for A.Y. 2010-11 only and not for A.Y. 2008-09 as requested by the assessee. The decision of the Pune Bench of the Tribunal in the case of Pushpendra Subhas Chandra reported .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e of 80% for civil work foundation and related labour cost of the windmill. 194. After hearing both the sides we find the above ground filed by the Revenue is identical to the ground of appeal No.3 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. 195. Ground of appeal No.2 by the Revenue reads as under : 2. On the facts and in th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

has been dismissed. Following the same reasoning, this ground by the Revenue is dismissed. 197. Grounds of appeal No.3a and 3b by the Revenue reads 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, 80IA(4) of ₹ 156630732/ - which was earlier confirmed by the Ld. CIT(A) as well as the Hon'ble ITAT for AY. 2004-05 and 2005-06 as the assessee is only a work contractor and not a developer as per the explanat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an 3 years. 202. After hearing both the sides we find the above grounds by the assessee are identical to ground of appeal No.3 in ITA No.2574/PN/2012 for A.Y. 2007-08. The facts and submissions are already mentioned therein. We have already decided the issue and the ground raised by the assessee on this issue has been allowed. Following the same reasonings the above grounds by the assessee are allowed. 203. Grounds of appeal No.4 to 5 by the assessee read as under : 4] The learned CIT(A) erred i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g to apportion the other misc. expenses between windmill cost and infrastructure cost without appreciating that all the expenses incurred by the assessee were relating to windmill and therefore, all such misc. expenses should have been allowed depreciation at the rate applicable to windmill. 204. After hearing both the sides, we find the above grounds are identical to ground of appeal No.4 in ITA No.2574/PN/2012 for A.Y. 2007-08. We have already decided the issue and the grounds raised by the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

identical to ground of appeal No.3 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 on this issue has been dismissed. 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) 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 and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction under sec. 801A(4) of ₹ 15278 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

raised by the Revenue on this issue has been dismissed. Following the same reasoning this ground by the Revenue is dismissed. 211. Ground of appeal No.4 by the Revenue reads as under : 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the cash found in locker as projected unexpended expenses relating to Ghodzar project, already admitted as additional income. 212. Facts of the case, in brief, are that during the course of search action conducted u/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t expended. It was stated by him that this unaccounted cash of ₹ 2.05 crores is part of additional income declared of ₹ 21,91,82,000/- in respect of projected business expenses of Ghodzari project and already covered in total declaration of ₹ 31 crores made in the statement recorded u/s.132(4) of the I.T. Act. It was also stated by him that this unaccounted cash is generated by inflating various business expenses. 213. During the course of assessment proceedings the AO asked th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the order reads as under : 79. I have considered the submission of the appellant. The assessing officer has made this addition on the ground that since the speed money payments were already made and the assessee has not made any declaration of an amount over and above the money already expensed out, the source of ₹ 2.05 crores found in the course of search and seizure was unexplained. In appellate proceedings, the assessee has given a chart showing the source and application of money while .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f funds. While it is correct that the source and application method will bring out whether a certain amount of unexplained expense out of declaration is available to explain the cash found in the locker at Laxmipuri, the same will have to be reworked upon giving effect to this order. Therefore, the assessing officer is directed to prepare the source and application statement in respect of the undisclosed income in the form of inflation of construction expenses and additions made. Thereafter, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

us available then, the entire amount will be taxed as unexplained cash found. For statistical purposes, this ground of appeal is allowed. 217. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 218. After hearing both the sides, we do not find any infirmity in the order of the CIT(A). He has only given a direction 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he 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 determin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rking that even at the end of the assessment year under consideration, there was unabsorbed depreciation of ₹ 15,15,28,827/-. Based on the above observation, the claim of deduction under section 80IA was rejected and the sum of ₹ 1,07,72,594/- was brought to tax. 221. Before CIT(A) it was submitted that it had installed two windmills in A.Y. 2006-07 and one in A.Y. 2007-08 which was entitled for deduction u/s.80IA(4)(iv)(a) from A.Y. 2006-07, which was first year of generation of pow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on and not the first year of operation of the undertaking. The fiction of notional carry forward of losses u/s.80IA(5) does exist but operates only from initial assessment year, i.e. the first year of claim and thereafter and is not applicable from earlier years. In support of its claim the assessee relied on the following decisions : 1. Velayudhaswami Spinning Mills Vs. ACIT 38 DTR 57 2. Poonawalla Estate Stud & Agro Farm (P) Ltd. Vs. ACIT (2011) 136 TTJ 236 (Pune) 222. Based on the argumen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

us. 224. After hearing both the sides, we find an identical issue had come up before the Tribunal in case of the sister concern of the assessee namely ACIT Central Circle, Kolhapur Vs. R.D.S. Construction Pvt. Ltd. and vice versa in ITA Nos. 377 to 383/PN/2013 and ITA Nos. 2578 to 2581/PN/2012 for A.Yrs. 2007-08 to 2010-11 order dated 06-11-2015. We find the Tribunal at para 135 and 136 of the order has discussed the issue and the ground raised by the Revenue on this issue was dismissed. The rel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed the factual matrix of the case and orders of the Revenue and the paper book. We have also examined the legal position on the matter. Before adjudicating the issue in question, it is necessary to examine the scope of the provisions relating to the initial assessment year : "80-IA. Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.-(1) Where the gross total income of an assessee includes any profits and gains d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the periods as specified in sub-s. (2) and thereafter, twentyfive per cent of the profits and gains for further five assessment years : Provided that where the assessee is a company, the provisions of this subsection shall have effect as if for the words twenty-five per cent ; the words thirty per cent had been substituted. (2) The deduction specified in sub-s. (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ars , 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 ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

this issue of initial assessment year and the option to the assessee and the held portion of the decision reads as under : "In view of the above learned CIT(A) s order to the extent of holding that initial assessment year and subsequent succeeding assessment years can only be considered for the purpose of computing deduction under s. 80-IA. Coming to the facts of the case, however, as seen from the schedule of details available in the learned CIT(A) s order the assessee has incurred losses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ose to claim the deduction for the first time........" 15. When the statute have granted the option to choose the initial assessment year and when the assessee has so chosen the current assessment year as the initial assessment year and when the assessee accordingly paid the taxes on the profits of the windmill activity in the earlier years as per the statute, the AO s decision to thrust the initial assessment year on the assessee is not in tune with the provisions of s. 80-IA(2) of the Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version