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TMI Blog2019 (12) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... affidavit). For that, Revenue has filed separate affidavits, seeking condonation of delay in filing the appeals. 2.1. Considering the petitions for condonation of delay in respect of Revenue and being satisfied with the reasonable cause for the delay, we hereby condone the delay in filing the appeals, which are admitted and being heard on merits. 3. First, we shall take up the appeals of assessee. For the sake of convenience, the appeal of assessee for the AY.2011-12 is discussed here under in detail: 4. Brief facts of the case are that, assessee-company carrying on business of development of infrastructure projects (Irrigation Projects and Electric Projects), filed its return of income for the AY.2011-12 on 30-09-2011, admitting taxable income of Rs. 11,72,01,883/-, after claiming deduction u/s.80-IA of the Income Tax Act [Act] of Rs. 15,83,50,255/-. Subsequently, a revised return was filed on 02-12-2011, admitting taxable income of Rs. 7,77,09,635/- and another revised return on 30-03-2012, admitting an income of Rs. 1,89,50,255/- wherein the deduction u/s.80-IA was claimed at Rs. 21,71,10,351/-. The return was processed u/s.143(1) of the Act. The Assessing Officer (AO) issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding irrigation Projects and 80IA(4)(iv)(b) in respect of Electrical Projects 1. Assessee Appeal are in relation to disallowance of deduction under section 80IA in respect of Electrical projects u/s 80IA(4)(iv)(b) : The CIT(A) based on the appeal order of the CIT(A) & ITAT for the Assessment year 2010-11 in ITA No. 765/Hyd/2014, 740/Hyd/2014 & CO No. 47/Hyd/2014 dated 29-02-2016, differing from the earlier ITAT order in Assessee's own case for Assessment year 2004-05 to 2009-16 ITA No. 347/Hyd/200S & 13 others dated 29-02-2012. The Hon'ble ITAT in its order in ITA No 347/Hyd/2005, at pages 16 to 21 the projects are extracted and the direction of the ITAT is at 44 8th line reads as under: "Therefore, in our considered view, the assessee should not be denied the deduction under section 811A of the Act if the contracts involves design, development, operating & maintenance, financial involvement and defect correction and liability period then such contracts cannot be called a simple works contracts to deny the deduction u/s 80IA of Act. in our opinion the contracts which contain above features to be segregated on this deduction u/s 80IA has to be granted and the other a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derived from laying of such 'network of new lines for transmission or distribution." In case the undertaking involved in transmission and distribution undertakes laying of the such network of new lines will be capital and nature and cannot earn profit for such laying of new lines, therefore, there has to be another undertaking. Hence your appellant is eligible for deduction on profits from electrical projects. It is prayed that deduction under section 80IA(4)(iv)(b) may be allowed. 2. The Department appeal are in respect of deduction allowed by CIT(A) under section 80IA(4)(i)(c) - The CIT(A) has followed the ITAT order for AY 2004-05 to 2009-10, in ITA NO 347/H/2008 & others, Order of the CIT(A) as well ITAT order for AY 2010-11, the relevant para are: The Hon'ble ITAT in its order in ITA No 347/Hyd/2008, at pages 16 to 21 the projects are extracted and the direction of the ITAT is at 44 8th line reads as under: "Therefore, in our considered view, the assessee should not be denied the deduction under section 811A of the Act if the contracts involves design, development, operating & maintenance, financial involvement and defect correction and liability period then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard as the order of the CIT(A) is in line with the order of ITAT." in view of the above, the Department appeals may be dismissed". 6.1. Further, relying on the decision of Hon'ble ITAT vide its order dt.29-02-2012 in ITA No.347/Hyd/2008 and others, Ld.Counsel for the assessee submitted that all these issues have to be remanded to the file of CIT(A) for passing an order in compliance with the said order of the Tribunal. Referring to above note, Ld.Counsel for the assessee submitted that the assessee is entitled to deduction u/s.80IA(4) of the Act in respect of both the types of the Projects. The said order of the Tribunal helps the assessee if an effect is given and the said decision is honoured by the AO. Further, referring to the allowability of deduction u/s.80IA(4)(i)(c) of the Act, Ld.Counsel for the assessee submitted that the ITAT already taken a view in this regard and consequently, the appeals of the Revenue are dismissed. 7. After hearing both the sides and also considering the decision of the Co-ordinate Bench of the Tribunal in assessee's own case cited supra, we are of the opinion that the directions should be given to the CIT(A) to go by the said order of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is to demonstrate that none of the finance charges were incurred for investments, which yielded the dividend income to the assessee in the year under consideration. The orders of the AO and CIT(A) are not clear about the extent of investments made by the assessee out of the interest bearing borrowed funds. It is also not emanating from the orders about the facts on the sufficiency of non-interest free funds for explaining the dividend yielding investments. Therefore, in all fairness, we are of the opinion that this issue should also be remanded to the file of AO for fresh consideration. Hence, this ground of assessee is treated as allowed for statistical purposes. 8.5. In the result, the appeal of assessee for the AY.2011-12 is treated as allowed for statistical purposes. Appeal of assessee for the AY.2012-13: 9. Since the facts of the present case are identical to one as decided by us in ITA No.1017/Hyd/2016, AY.2011-12 (supra) and therefore our findings in the said appeal, mutatis mutandis, would apply to this appeal as well. Hence, this appeal of assessee is also treated as allowed for statistical purposes. Appeals of Revenue for the AYs.2011-12 & 2012-13: 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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