TMI Blog2018 (2) TMI 1519X X X X Extracts X X X X X X X X Extracts X X X X ..... by it, AO is directed to examine this aspect and allow the claim after verification as in earlier years. The ground is considered partly allowed for statistical purposes Disallowance u/s.40(a)(ia) - amounts on which TDS was not deducted or TDS deducted but not paid - CIT-A restricted the disallowance only to the amount of TDS deducted and not paid in AY. 2012-13 - Held that:- As the issue is now decided by the Hon'ble Supreme Court of India in the case of Palam Gas Service Vs. CIT [2017 (5) TMI 242 - SUPREME COURT] in which it was held that even the amounts paid during the year are also covered by the provisions of Section 40(a)(ia), the Special Bench decision of the ITAT in the case of Merilyn Shipping and Transport Ltd., Vs. ACIT (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) is no longer a valid one. Consequently, the order of CIT(A), relying on the above, for giving relief is to be set aside. Allowance of deduction u/s. 80IA on the amount disallowed u/s 43B - Held that:- The amount disallowed u/s. 43B will become profits of business in the computation of income under the head ‘business’ or ‘profession. Consequently, if the amounts disallowed are pertaining to the projects on whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d.DR. Issue of Section 80IA : 4. In both the assessment years under consideration, AO was of the view that assessee is only executing works contract as a contractor and not as a developer of infrastructural facilities. AO was of the opinion that assessee has not fulfilled all the conditions and requirements of the provisions of Section 80IA for claim of deduction. 4.1. Before the Ld.CIT(A), assessee not only justified how it was entitled for deduction u/s. 80IA but also relied on the orders of ITAT, Hyderabad A Bench in ITA No. 129/Hyd/2013 dt. 30-08- 2013 for the AYs. 2004-05 to 2009-10 in its own case. Ld.CIT(A) following the above order, gave relief to assessee. 4.2. It was the contention of Ld.DR that assessee is not involved in infrastructural development that is required u/s. 80IA and was only involved in works contract, hence not eligible for deduction. It was the submission of the Ld. Counsel that assessee is involved both as contractor as well as infrastructural developer and the claim was made only the extent of projects which are as infrastructural developer and furnished the details of works undertaken. i. Infrastructu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts which the assessee itself has segregated and claimed. However, he has no objection if this aspect is verified by the A.O. Therefore, while agreeing with the order of the CIT(A) in granting the deduction under section 80IA, subject to verification of quantum of income on the eligible infrastructure projects, as per the directions of the ITAT in earlier years. Revenue grounds are accordingly partly allowed . 4.5. In view of that, since assessee ascertains that it has claimed only the deduction on infrastructural projects undertaken by it, AO is directed to examine this aspect and allow the claim after verification as in earlier years. The ground is considered partly allowed for statistical purposes. 4.6. Similar is the case in AY. 2013-14 also. The above directions given for AY. 2012-13 will equally apply as the assessee has submitted that the claim in this year is only to an extent of 20%. i. Infrastructure contracts (6 projects) - ₹ 32,93,79,115 ii. Infrastructure Projects executed Directly - ₹ 7,83,29,410 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T [394 ITR 300] (SC) in which it was held that even the amounts paid during the year are also covered by the provisions of Section 40(a)(ia), the Special Bench decision of the ITAT in the case of Merilyn Shipping and Transport Ltd., Vs. ACIT (supra) is no longer a valid one. Consequently, the order of CIT(A), relying on the above, for giving relief is to be set aside. 6. However, assessee in the cross-objection has raised the issue that assessee has not been treated as assessee-in-default under the provisions of Section 201(1) of the Act and following the decision of the Hon'ble Delhi High Court in the case of Ansal Land Mark Township (P) Ltd., Vs. CIT [CM Appeal No. 3774 of 2015 in ITA No. 160 of 2015] dt. 28-08-2015, the disallowance u/s. 40(a)(ia) could not be made, if assessee is not treated as assesseein- default. It was further submitted that assessee is in a position to produce the certificates that the payee has included the amount received from assessee in its returns and has paid entire taxes on the income. Since these issues are not examined by the AO, we are of the opinion that the disallowance u/s. 40(a)(ia) is required to be re-considered by the AO, after givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be given. As a result, the alternate grounds raised by the AR are allowed . 7.1. The amount of ₹ 1,68,00,000 was disallowed u/s 43B. The said disallowance was confirmed by Ld. CIT(A). assessee contention was that the said amount will increase the profits of business and the corresponding claim u/s 80IA(4) will get increased. Ld. CIT(A) accepted the contention as stated above. We do not see any reason to interfere with the order of Ld.CIT(A), as the amount disallowed u/s. 43B will become profits of business in the computation of income under the head business or profession. Consequently, if the amounts disallowed are pertaining to the projects on which the claim u/s 80IA was made, the same has to be allowed as profits get increased to that extent. AO is directed to the examine working of profits and allow the claim. The grounds raised by revenue has no merit. 8. In the result both the Revenue appeals are partly allowed for statistical purposes. 9. Cross-objections by Assessee are mainly in support of the orders of CIT(A) and on the issue of 40(a)(ia), the matter was already been restored to the file of AO. Accordingly, Crossobjections are also considered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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