TMI Blog2022 (9) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA.No.1161/Del./2017 - - - Dated:- 21-9-2022 - Shri Anil Chaturvedi, Accountant Member And Ms. Astha Chandra, Judicial Member For the Assessee : Dr. Rakesh Gupta, Adv., Shri Somil Aggarwal, Adv. And Shri Deepesh Garg, Adv. For the Revenue : Shri R.K. Gupta, CIT(DR) ORDER PER ANIL CHATURVEDI, A.M. : The above cross appeals by Assessee and Revenue are directed against the order of the Ld. CIT(A)-18, New Delhi, dated 28.12.2016 in Appeal No.89/15-16 relating to the A.Y. 2011-2012 and arises out of the penalty order dated 26.03.2015 passed by the A.O. under section 271(1)(c) of the I.T. Act, 1961 . 1.1. Since common issues are involved in both the appeals, the appeals were heard together and are being disposed of by this common consolidated order for the sake of brevity. The Learned Counsel for the Assessee submitted that the decision taken in ITA.No.206/Del./2017 for the A.Y. 2011-12 may be applicable to the Revenue Appeal in ITA.No.1161/Del./2017 for the A.Y. 2011-12 also, to which, the Ld. D.R. has objection. 2. We, therefore, cull-out the relevant facts from ITA.No.206/Del./2017 for the A.Y. 2011-12 as under : 2.1. Briefly stated facts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejudice to each other. 4. Aggrieved by the order of the Ld. CIT(A), the Revenue is also now in appeal before us and has raised the following grounds : 1. On the facts and circumstances of the case, the order dated 28.12.2016 passed by the Ld. CIT(A) u/s 250 of the I.T. Act, 1961 is erroneous and bad in law. 2. On the facts and circumstances of the case, the Ld. CIT(A) erred in directing to recomputed the quantum of penalty u/s 271(1)(c) of the Act by reducing the foreign tax credit allowed to the assessee from the tax chargeable on income earned in foreign countries. 3. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing. 5. We, first proceed to decide the grounds raised by the assessee in its appeal. 5.1. Before us, at the outset, the Learned Authorised Representative for the Assessee submitted that A.O. has made the following additions i.e., disallowance under section 14A at Rs.1,36,47,143/-, Exclusion of Income under DTAA Agreement at Rs.4,38,64,96,302/- and denying claim of deduction under section 80IA(4) amounting to Rs.70,79,44,520/-. He submitted that on the aforesaid additions, the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NALTY U/S 271(1) (c) ON INCORRECT CLAIM OF DEDUCTION U/S 80IA The desired brief synopsis is being submitted for your Honours' kind consideration on the limited issue of sustaining of penalty u/s 271(l)(c) of the Income-tax Act, 1961 (The Act, for short) by Ld. CIT (Appeal), in the aforesaid appeal levied by the A.O. rejecting the claim of the Appellant-Assessee u/s 80IA of the Act. 2. Most respectfully the following humble submissions based on facts as well as applicable statutory provisions are made herein- under for your kind consideration in the interest of justice. 2.1. It is the claim of the Appellant that the issue under consideration is squarely covered by Hon'ble ITAT' decision in Appellant's own case by its earlier consolidated order in ITA No. 2401/DEL/2013 for A.Y. 2006-07 and ITA No. 2563/DEL/2014 for A.Y. 2011-12 on identical issue. 2.2. In this connection, it is most humbly submitted that the Hon'ble ITAT was not benefitted by taking into account the Explanation to sub-section to (13) of Section 80IA of the Act having been inserted by the Finance Act, 2009, with retrospective effect from 01-04-2000 categorically restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted merely as contractor as sought to be made out by Assessing Officer and CIT (Appeals). The Oxford dictionary defines the term developer as a person that designs and create new products, whereas contractor is a person or a company that has a contract to do work or to provide goods or services. Various clauses of the above referred agreement to which reference has been made by us little below would show that the construction rail over bridge projection (ROB) 23 awarded by MSRDC to the appellant is nothing but development of infrastructure facility, which was to be legally handed over to the Railways and MSRDC after the payment was received. Various clauses of the agreement would show that the jobs done by the appellant were planning, execution, construction and making the infrastructure facility ready for operations. Ld. Assessing Officer has not pointed out any specific clauses of any agreement, which shows that all attributes of development were not present. Making a bald assertion that assessee was a contractor does not serve any purpose. Merely using the terms contractor in the agreement would not make any difference as what has to be seen is the substance. Anybody who enters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record for the year under consideration, respectfully following the findings of the coordinate bench, we direct the Assessing Officer to allow deduction u/s 801 A of the Act. 2.3.2. A.Y. 2011-12 ITA No. 2563/Del/2014 : A.Y. 2011-12 (Assessee): Disallowance of deduction u/s 801 A: Income through PE u/s 115JB: 41. These issues are akin to the grounds adjudicated above in ITA No. 2401/Del/2013 for the A.Y. 2006-07, hence the same ratio applies. The appeal of the assessee on this ground is allowed. 2.4. It can, thus, be seen that the Hon'ble ITAT was not benefitted by the statutory provisions inserted in the scheme of the original beneficial provisions being Section 80IAof the Act which were categorically made inapplicable to a contractor through the newly inserted Explanation to its original scheme through the Finance Act, 2009. 2.5. It is most humbly submitted that in pursuance of Article 47 of the Constitution of India, the Union Government while discharging its sovereign functions awarded different Work Contracts to Appellant assessee during the Financial Year 2010- 11, corresponding to A.Y. 2011-12 under consideration of Your L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requested that the appeal of the Assessee respecting incorrect claim of deduction u/s 80IA of the Act may be dismissed in the interest of justice. 7. We have heard the Learned Representative of both the parties and perused the material available on record. The issue in the present appeal is with respect to levy of penalty by the A.O. under section 271(1)(c) of the I.T. Act, 1961 under three heads i.e., disallowance under section 14A, Exclusion of Income under DTAA Agreement and denying claim of deduction under section 80IA(4). 7.1. As far as the first issue of disallowance under section 14A is concerned, the Ld. CIT(A) deleted the penalty and the Revenue did not appeal before us. Therefore, we uphold the order of Ld. CIT(A) on this issue in absence of any appeal and in absence of any objection from the side of the Ld. D.R. and delete the penalty levied by the A.O. on this issue. 7.2. As far as the second and third issues i.e., Exclusion of Income under DTAA Agreement and denying claim of deduction under section 80IA(4) are concerned, We find that in assessee s own case for the A.Y. 2011-12 in quantum appeal the ITAT, Delhi C-Bench, Delhi vide order dated 28.01.2022 (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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