9911796707
TMI Blog2023 (1) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... dabad (in short 'CIT(A)' arising out of the orders dated 23.12.2019, 20.11.2010, 31.10.2011, 28.02.2013, 25.03.2014, 09.02.2015, 22.12.2015 & 12.12.2018 passed by the ACIT, Circle-8, Ahmedabad / Jt.CIT, Range-8, Ahmedabad / DCIT(OSD), Circle-8, Ahmedabad / DCIT, Circle-4(1)(2), Ahmedabad under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to 'the Act') for Assessment Year 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 & penalty order dated 19.03.2018 by the Ld. ACIT Circle-4(1)(2), Ahmedabad, under Section 271(1)(c) of the Act for A.Y. 2012-13. 2. Since all these appeals are relating to identical issues that too in respect of the same assessee, the entire bunch of appeals are heard analogously and are being disposed of by this common order for the sake of convenience. 3. A perusal of the grounds of appeals, it would indicate that there are certain common grounds, which are as follows- (i) Denial of claim of deduction under Section 80IA of the Act by treating the assessee as a 'work contractor' and not 'developer' by the Revenue. (ii) Additional ground has also been taken in respect of A.Ys. 2007- 08, 2008-09 & 2009-10 in the appeal preferred by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions laid down by the Act was duly fulfilled by the assessee earlier finalizing assessment under Section 143(3) of the Act accepting such claim made under Section 80IA of the Act. 8. In the year under consideration, the assessee claimed deduction under Section 80IA(4) of the Act of Rs.1,59,58,473/-. Upon a perusal of the details submitted by the assessee, the Ld. AO was of the view that the assessee's construction business was performed on contract/sub-contract basis and therefore on 23.11.2009 show cause was issued as to why the claim should not be disallowed in view of the Explanation to Section 80IA of the Act as substituted by the Finance Act (No.2), 2009 w.e.f. 01.04.2000 on the premise that the assessee carries on a business which is in the nature of work contract. The assessee duly replied by substantiating the details in regard to the claim made under Section 80IA(4) of the Act. It was contented that the activities carried out by the assessee involve development of project, engagement of various agencies, raises own finances and invests its own funds in the construction of the project and therefore, entitled to the claim made by the assessee under Section 80IA/80IA(4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecommended by the assessee, the same has to be approved by the competent authority and becomes part of the tender. Further that once the tender is awarded, the assessee has to pay earnest money, security deposits, performance guarantee by placing fixed deposits with banks. The assessee is also liable for liquidated damages/penalty, free maintenance and repair during defect liability period. During the construction of project, the assessee has to make all the arrangements and is liable for procurement of water, electricity, all materials, skilled, semi-skilled staff, labourers, plant & machinery, equipments & tools, and also wellbeing of the staff/labourers. A perusal of the books of accounts reveals that the assessee has arranged own finance and fixed assets shown on plant & machinery, profit & loss account also demonstrates purchase and consumption of material. He submitted that the assessee is always burdened with financial risk to carry out the project work on own cost with the fixed rate specified in the tender. The payment would be made by the competent authority only after successful completion of the project, project certification etc. and that too after deduction of the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. 12. Before the First Appellate Authority, the assessee submitted as follows: "The learned Assistants Commissioner of Income Tax has erred in disallowing our claim u/s 80 IA of Rs. 1,59,58,4731- on the ground that the assessee is only contractor and not the developer, so the relief u/s 80IA is not available to contractor and the legislature is also amended retrospectively and thus the claim is not eligible. During the course of hearing held on 06/11/2009, learned ACIT, has specifically raised a query why relief claim u/s 80IA (4) should not be disallowed on the basis of explanation inserted by Finance Act (No. 2) 2009. The inserted explanation is as follows, " Explanation- For the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub section (4) which is in 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) We are regularly filling Income Tax Returns with claiming relief u/s 80IA (4) since many years and claim is accepted by the department as all the condition laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common parlance. Accordingly a developer is a person who develops the facility and such person may or may not be a contractor. For an example, if a contract to construct a highway from Mumbai to Delhi is given to a person he is contractor as well as developer. As against that a person who has been given a contract for painting or beautification is merely a contractor but not a developer. According to us while developing a project, a developer has to make technological inputs, entrepreneurial inputs etc. Besides, there is financial involvement in terms of deployment of man and machine as well as bank guarantees. Further, we explain that the developer undertakes the risk and reward of the project and is accountable to the authorities for the development work carried out by him. In our opinion, we in the present case cannot be characterized anything other than a developer. The meaning of the words "contractor" as well as "developer", which have neither been defined in the Act nor in the General Clauses Act, we fall upon Oxford Advanced Learner's Dictionary to find out their meaning. According to this dictionary "developer" is a person or company that designs and creates new pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the explanation has come from 01-04-2009 and as such when the return of income for the current year was filed, this explanation was not there and hence, not applicable to current year as the same is inserted by Finance Act (No. 2) 2009. Moreover, the Act is not amended. Thus it is not substantive amendment and the same is inserted with retrospective effect which is unduly oppressive and confiscatory and bad in law. The explanation is direct conflict with and contrary to the main provision of the section. Explanation cannot override or be derogatory to the main provisions of the Act as held by the Hon'ble Supreme Court in the case of S. Sundaram Pillai & Others reported at AIR 1985 (SC) 582. The assessee company has always considered such relief while quoting and finalization the tender, which is the main activity of the company. In fact, the competitive bidding was priced by taking into consideration the incentive available at that time based on prevailing legal position. Now, with retrospective amendment, the whole commercial arrangement of the assessee has become infructuous and resulted into loss of incentives, which would have been otherwise available to the assessee. " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esire whereas the contractor has to stick to the specifications given to him. After ascertaining the meaning of the words 'developer' as well as the 'contractor', it would now be appropriate to apply the conditions prescribed in section 80IA(4) to each project on which the deduction u/s. 80IA has been claimed, executed by him during the year and also test whether the appellant has acted as a developer or contractor. The conditions prescribed in Section 80IA(4)(ia) is satisfied by the appellant company as the company is registered in India. The appellant has executed several projects during the year, but has claimed 80IA deduction only on six projects. Each project on which the deduction is claimed is discussed separately hereunder: (i) Construction of elevated road including approach roads connecting the existing road on Dadabari side and the road going Garh Palace by passing Kishorepura Gate on Chambal river reservoir near the barrage at Kota. The project was executed by the appellant for Urban Improvement Trust (UIT) Kota a body of government of Rajasthan. The appellant has claimed that it has developed the project as it was responsible for structural design ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant. The appellant has, therefore, claimed that it has acted as a 'developer'. The claim of the appellant is not acceptable. The bridge has been constructed as per the drawing issued by the department. The appellant did not make any investment in construction of the project. The appellant did not take any financial risk for the project as the payments were received from Executive Engineer, N. H. Division, Bharuch from time to time in accordance with the progress of the work. The payment conditions were clearly defined in the contract agreement. It was provided that the appellant would be paid money at various stages and in accordance with the progress of construction. It is notable that the appellant was given the work after part of it was executed by some other contractor. The appellant was, therefore, clearly a 'contractor' who executed the work as per the specification. The claim that the appellant had given performance bank guarantee for the project is not relevant for deciding whether the appellant was a 'developer' or 'contractor' as every contractor who is executing a project gives such guarantee about the quality of the constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of project given by any contractor. Therefore, from above analysis it is clear that this project does not make the appellant entitle for deduction u/s. 80IA as the appellant has worked merely as a contractor and not as a developer. The appellant did not conceive, did not develop the project and did not make investment in it. The developer and the investor in this case is Indian Railways. (iv) Construction of 4 lane bridge across river Sabarmati for connecting 120 feet wide road from Vasna to Pirana. The project was executed for Ahmedabad Municipal Corporation (AMC) and involved construction of bridge across river Sabarmati. The bridge was constructed with the design and drawing issued by AMC. The appellant has claimed that the project demanded great skill for constructing the foundations, structure and super structure under water flowing condition of the river Sabarmati. It was supervised by the qualified engineer of the company. The appellant has designed the supporting trusses. The appellant also appointed the consultants for testing of the file foundations. The appellant has also claimed that it has financed the project with their own resources. The appellant also maintained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the project with their own resources. The project was maintained by appellant for one year for making good the defects, if any, developed during the period. The appellant also deposited performance security in the form of bank guarantee from the start of the project till the end of defect liability period. The appellant has, therefore, claimed that it was a 'developer'. The claim of the appellant is not acceptable as it is clear from the details given by him that the railway provided all the specification and drawing. The project was not conceived and developed by him. In fact it was a project for gauge conversion of existing railway line and a bridge was to be constructed on the river. The project was designed and conceived by the railways. The claim of the appellant that it used highly technical skills and technical persons for executing the project is not material as for executing a contract which is highly technical such as construction of a bridge or 'railway line over the river, the contractor will definitely need the technical skills and experience. The appellant did not make any investment in the project. The appellant did not take any financial risk as it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the contract for construction of bridge, the contractor should have the requisite technical skills. The claim of the appellant that it maintained the bridge for 1 year after the completion is also not material as any contractor who executes some contract has to give this kind of guarantee for the quality of the contract executed by him. Therefore, from above analysis it is clear that this project does not make the appellant entitle for deduction u/s. 80IA as the appellant has worked merely as a contractor and not as a developer. The appellant did not conceive, finance and develop the project. The developer and the investor in this case is Surat Municipal Corporation. Therefore, it is clear from the individual analysis of all the projects for which the appellant has claimed deduction that the business done by him is in the nature of work contract awarded to him by other agencies. The appellant has merely acted as a work contractor. The claim of the appellant that the assessments from A.Y. 2002-03 to 2006-07 have been completed u/s. 143(3) and the deduction u/s. 80IA have been allowed, the claim of the appellant is not acceptable as the principle of Res-judicata is not app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral or State Government) and executed by the undertaking or enterprise referred to in sub-section (1). 15. The above explanation has denied the benefit of deduction under section 80IA(4) of the Act to a person who executes a project which is in the nature of works contract. In that view of the matter, the first and foremost condition imposed upon an assessee is to establish that he worked not as 'works contractor', but as a 'developer'. 16. On the other hand, a 'contractor' is a person who undertakes work on a contract basis. He does not assume risks and responsibilities like that of a developer. He merely carries out the work as has been instructed to him by the principal. Moreover, in case of such work, the contractor gets fixed amount of revenue for executing such work and is not entitled to any share of profit from revenue generated by the developer/land owner. In other words, the developer acts as a principal whereas the contractor acts as an agent in performing the functions as required by the developer. The developers, in true sense, are the persons who are carrying out the business of developing or operating and maintaining or developing, operating and maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year tax holiday has been allowed for any enterprise which develops, maintains and operates any new infrastructure facility such as roads, highways, expressways, bridges, airports, ports and rail systems or any other public facility of similar nature as may be notified by the Board on BOT or BOOT or similar other basis (where there is an ultimate transfer of the facility to a Government or public authority). The enterprise has to enter into an agreement with the Central or State Government or a local authority or any other statutory authority for this purpose. The period within which the infrastructure facility has to be transferred needs to be stipulated in the agreement between the undertaking and the Government concerned. The enterprise has to be owned by a company registered in India or a consortium of such companies. The tax holiday will be in respect of income derived from the use of the infrastructure facilities developed by them. Finance Act, 1995 34.4 It will apply in respect of infrastructure facilities becoming operational on or after 1-4-1995..." 1.7 Thus, a clear declaration about the kind of profits eligible for deduction under Section 80IA(4)(i) comes from the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod the facility is transferred to the Government. BOT means Build Operate & Transfer Under this scheme the private participant will not be owning the facility. The private participant would be entitled to operate the facility for a specific period during which the revenues from the operation would be shared between the private participant and the Government or the Government will be paid lease charges by the private participant. On completion of the specified time the facility will be transferred to the Government. 2.2. It is, thus, assesses who undertake development of infrastructure on BOOT, BOLT or BOT model or a similar arrangement are eligible of the benefit of deduction u/s 80IA(4)(i). They make initial investment and the income derived from the use or commercial exploitation of the project so developed alone is eligible profit. 2.3 For instance, if we consider the case of development of highway, developer assessees derive income from the usage of the road in the form of revenues collected by way of toll charges and thus, not only collect the cost of investment but also profits thereon. It is such kinds of profit that are contemplated u/s 80IA(4)(i) for deduction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught in a clarificatory amendment in the year 2007. An Explanation below Section 80 IA(13) was inserted with retrospective effect from 01.04.2000, which reads as under: "..For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a person who executes a works contract entered into with the undertaking or enterprise, as the case may be.." 2.9 The legislature clarified the real legislative intent behind this scheme of deduction by way of Circular No.3/2008 dated 12/03/2008 being the Explanatory Notes to the Finance Act, 2007. The relevant portion of the Circular is reproduced hereunder for ready reference: "... 34.2 The tax benefit was introduced for the reason that industrial modernization requires a massive expansion of, and qualitative improvement in, infrastructure (viz., expressways, highways, airports, ports and rapid urban rail transport systems) which was lacking in our country. The purpose of the tax benefit has all along been for encouraging private sector participationby way of investment in development of the infrastructure sector and not for the persons who merely execute the civil construction work or any other works co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of deduction only to the class of developers bearing investment and entrepreneurial risk is, therefore, a conscious legislative action and is not open to slightest of inferential latitude. 3.7 The clarificatory amendments represent a fine example of legislative discretion and parliamentary discernment and leave no scope for any attempt at interpretation, liberal or otherwise. It is a settled doctrine of jurisprudence that scope of interpretation does not exist where the language of the law is clear and words are unambiguous. 3.8 The A.R. of the assessee has argued that BOLT, BOOT or BOT or similar manner which were the basis of investment augmentation is no more a good law as the only developer are also entitled to claim deduction u/s. 80IA(4) and it is not necessary to operate or maintain the infrastructure facility for claiming deduction in view of amendment made in Finance Act, 2001 w.e.f. 01.04.2002. In this regard, it is submitted that though the condition was relaxed vide amendment made in 2001 but the condition that it has to be built from the fund of the assessee as per BOT or BOOT or similar arrangement has not been relaxed. Only the Enterprise which has built th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operating the projects. Copies of works contracts how that the assessee was not involved in such stages as a developer. vii. The assessee company has no stake in the financial viability of any of the projects and payments are made to it by the contractee on attainment of specific stages of progress on periodic manner. viii. The activity of contractual civil construction does not fall in the purview of the phrase 'eligible business'. 4.3 The Ld. AO, therefore, held that neither the assessee company was into eligible business within the meaning of Section 80IA(4)nor the income earned by the assessee fell within the ambit of eligible income. 18. In view of the above, in order to ascertain whether a civil construction work is assigned on development basis or contract basis only on the appellant, the terms and conditions of the agreement needs to be considered. Only on the basis of the terms and conditions and the scope, ambit and nature of the contract assigned to the appellant it could be ascertained whether it is a "works contract" or a "development contract". The right and obligations of the assessee in the projects implemented by the assessee on behalf of the Government en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Reinforcing Bars are also got to be tested by the assessee at its own cost from time to time at Government Approved Laboratories. 19.7 We have further gathered from Page No.10 of Paper Book-I that the assessee has to arrange own finance by raising adequate capital, reserves & surplus, secured & unsecured loans. From the financial statement, we find that the appellant has raised total amount of Rs. 13,23,63,317/-. 19.8 It appears from Schedule of fixed assets on Page No.13 of Paper Book-I that the assessee has to use and invest heavily in purchasing own P & M, Equipments etc in order to be eligible to bid for tender and carry out the development of various projects. The gross block of assets as on 31-03-2007 are to the tune of Rs.10,17,55,560/-. 19.9 It further appears from Clause - 9 of the Tender document available at Page No. 218 & 229 of Paper Book-II that the assessee has to employ own team of experienced and qualified Project Manager, Site Engineer, Plant Engineer, Quality Surveyor, Soil & Material Engineer, Survey Engineer. 19.10 It also appears from Clause No. 34 of the tender document available at Page No. 215 of Paper Book-II that the appellant has to pay Performance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven only against the provision by the Contractor of an unconditional Bank Guarantee. Same is evident from Clause 51 of the Tender at Page No. 234 and Clause 32 of Tender document at page 244 of Paper Book-II. 19.16 The Contractor shall submit monthly statements of estimated value of work completed, and it will be subject to final Certification, determination and approval by the Engineer and that too after deductions like advance payments, retention, other recoveries, taxes etc. The same is evident from Clause 42 & 43 of the Tender at Page Nos. 232 of Paper Book-II. 19.17 It also appears from Clause F-1 of the Tender document at page 236 of Paper Book-II that the assessee has to arrange for labour and is also responsible for their payments, housing, feeding and transport and for safety of all concerned. It also appears from Clause F-2 of the said document at Page No. 236 of Paper Book-II that the assessee has to take Workmen compensation insurance & is liable to pay Compensation and abide by all Labour Laws. 19.18 Contractor will be responsible for all activities on the Site. Same is evident from Clause 19 of the Tender document available at Page No. 230 of Paper Book-II. 19.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Radhe Developers, 341 ITR 403 (Guj). It is imperative upon us to take note of the relevant portion of the above judgments for better understanding of the issue on hand. "34. We have reproduced relevant terms of development agreements in both the sets of cases. It can be seen from the terms and conditions that the assessee had taken full responsibilities for execution of the development projects. Under the agreements, the assessee had full authority to develop the land as per his discretion. The assessee could engage professional help for designing and architectural work. Assessee would enroll members and collect charges. Profit or loss which may result from execution of the project belonged entirely to the assessee. It can thus be seen that the assessee had developed the housing project. The fact that the assessee may not have owned the land would be of no consequence. 35. With respect to the question whether the assessee had acquired the ownership of the land for the purposes of the Income Tax Act and, in particular, Section 80IB(10) of the Act and to examine the effect of Explanation to Section 80IB(10) introduced with retrospective effect from 1.4.2001, since several aspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the erstwhile proposed purchasers, the surplus amount would remain with the assessee. Such terms and conditions under which the assessee undertook the development project and took over the possession of the land from the original owner, leaves little doubt in our mind that the assessee had total and complete control over the land in question. The assessee could put the land to use as agreed between the parties. The assessee had full authority and also responsibility to develop the housing project by not only putting up the construction but by carrying out various other activities including enrolling members, accepting members, carrying out modifications engaging professional agencies and so on. Most significantly, the risk element was entirely that of the assessee. The land owner agreed to accept only a fixed price for the land in question. The assessee agreed to pay off the land owner first before appropriating any part of the sale consideration of the housing units for his benefit. In short, assessee took the full risk of executing the housing project and thereby making profit or loss as the case may be. The assessee invested its own funds in the cost of construction and enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a contractor in the agreement, it would not debar it from claiming deduction. (iv) Direct agreement between the transferee-assessee and the specified authority is not a mandatory requirement u/s.80-IA(4) of the I.T. Act. Needless to mention that the assessee qualified all the criterion fixed by the Amritsar Bench. 24. We have already dealt with relevant clauses of the tender documents stipulating various conditions viz. financial involvements, risks, obligations and responsibilities of the assessee in developing, operating and maintaining of infrastructure facilities, which clearly make the case of the assessee within the scope and ambit of section 80IA(4) of the Act so as to claim the impugned deduction. 25. The terms and conditions of tender documents / agreements / work order and comprehensive view of the activities undertaken by the assessee as discussed above clearly demonstrates that the assessee-company has undertaken substantial activities in respect of various projects awarded by various statutory bodies, which makes the assessee to qualify as a developer of Infra facility and to make claim necessary benefits under section 80IA(4) of the Act. 26. So far as case la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission which was urged on behalf of the revenue is that under clause (iii) of sub-section (4A) of section 80-IA, one of the conditions imposed was that the enterprise must start operating and maintaining the infrastructure facility on or after 1-4- 1995. The same requirement is embodied in sub-clause (c) of clause (i) of sub-section (4) of the amended provisions of section 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 been confirmed earlier in this judgment. That the assessee was maintaining the facility is not in dispute. The facility was commenced after 1-4-1995. 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 1-4-1995. After section 80-IA was amended by the Finance Act of 2001, the section applies to an enterprise carrying on the business of (i) developing; or (ii) operating and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial risk involved as the assessee was getting the payment for the construction done by him from time to time as one of the major remarks and/or observations made by the CIT(A) in negating the claim made by assessee. We have carefully considered this particular aspect of the matter. If the contention of the Revenue is encouraged then possibly none of the developers will be entitled to the claim made under Section 80IA(4) of the Act. Our this view has been strengthened by the observation and the ratio laid down by the Hon'ble Delhi High Court in the case of CIT vs. VRM India Ltd., reported in [2015] 57 taxmann.com 325 (Delhi). While dealing with this particular aspect of the matter the Hon'ble Court has been pleased to observe as follows: "15. Since the assessee developed an infrastructure facility/project and was not required to maintain or operate, it was entitled to cost, plus the margin of income or profit; not to expect this treatment would render one who develops an infrastructure facility project, unable to realise its cost. If the infrastructure facility is, after its development, transferred to the Government, naturally the cost would be paid by the Government. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development infrastructure facilities such as development of roads, bridges, water treatment plants, canals, siphon work (irrigation projects), sewage treatment plant etc. by entering into contract with various Government authorities. In fact, we find that the clauses stipulated in the Tender document is almost akin to the clauses mentioned in the Tender document in respect of the assessee before us. Relevant to mention that though the assessee has taken different projects, the clauses mentioned mostly in all tendered documents are in respect of different projects entrusted upon assessee by the statute authorities in different years are identical. We find that on the identical facts and circumstances of the case, the assessee was found to be eligible for claiming deduction under Section 80IB(4) of the Act taking into consideration the overall aspect of works undertaken by the assessee therein. We are inspired by the ratio laid down by the Co-ordinate Bench in the said judgment Rajkamal Builders Infrastructure Pvt. Ltd. (supra) in holding the assesse eligible under the identical facts and circumstances of the case. 31. In the light of the above discussion and perusal of various cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Profit on Sale of Assets 4. VAT Refund - Jabalpur Bridge Site 5. Release of Retained Income - Sabarmati Bridge 6. Refund from Sales Tax 7. Arbitration Claim - Anantpur ROB Kota Site 8. Recovery against stolen Steel at site 9. Compensation of Job Work Charges 10. Sundry Balance Written off 11. Crane Service Income 12. Interest on IT Return & other Interest 13. Dividend Income" 35. So far as Item Nos. 9 to 13 is concerned, the Ld. Counsel appearing for the assessee has not pressed the same. 36. So far as the bank interest on bank guarantee is concerned, the same is found to be covered in favour of the assessee by the judgment passed in case of Rajkamal Builders Infrastructure P. Ltd. vs. DCIT in ITA Nos. 118/Ahd/2019 & Ors. While granting relief to the assessee, the Co-ordinate bench has been pleased to observe as follows: "46. Before us, the counsel for the assessee reiterated submissions as were made before the lower authorities. The counsel further submitted that the interest income is earned only on fixed deposits for obtaining bank guarantee and security deposit to be placed mandatorily as per the tender when work was awarded. Hence, such interest incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being the position of law, we have no hesitation in accepting the claim of the assessee that the income earned from the deposits is business income is eligible for deduction under section 80IA of the Act. Accordingly, this common ground raised in the appeals under consideration is allowed in favour of the assessee and against the Revenue." We do not find any reason to deviate from the stand taken by the Coordinate Bench in identical facts and circumstances of the case. We, therefore, respectfully relying on the same, allow this bank interest on bank guarantee to the tune of Rs.11,46,733/- for the deduction made under Section 80IA of the Act. This ground of appeal will apply mutatis mutandis in the appeal preferred by the assessee for A.Ys. 2008-09 & 2009-10. 37. So far as sale of scrap of business items to the tune of Rs.26,24,658/- is concerned, the same is also found to be covered by Hon'ble Jurisdictional High Court in the case of DCIT vs. Harjivandas Juthabhai Saveri & Anr., reported in (2002) 258 ITR 785 (Guj). While granting relief to the assessee, Hon'ble Court has been pleased to observe as follows: "(5) Whether the Appellate Tribunal is right in law and on facts in al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no question of law is raised, more particularly, when a Division Bench of this court in Income Tax Application No. 70 of 1997 (CIT v. Norma Detergent P. Ltd.) had considered a similar question and held that "it was, however, found that the items of kasar and sale of empty soda ash bardans, are directly connected with the manufacturing activities of the assessee and should be allowed". It is required to be noted that if the assessee was not engaged in industrial activities, there was no question of empty barrels or bardans. Instead of manufacturing if the assessee was doing trading activities, i.e., dealing in raw material, and if the assessee had sold the material on retail basis and earned amount by sale of bardans, then obviously this section will not apply." In view of the aforesaid observation, we allow this component to be taking into consideration for deduction under Section 80IA of the Act treating it as income. 38. The other component being profit on sale of Assets, VAT Refund - Jabalpur Bridge Site, release of Retained Income - Sabarmati Bridge, refund from Sales Tax, Arbitration Claim - Anantpur ROB Kota Site and recovery against stolen Steel at site are found to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the judgment, we find that while upholding the order passed by the Ld. CIT(A) in deleting the levy of penalty made by the Ld. AO, the Co-ordinate Bench has been pleased to observe as follows: "77. However, we would like to note that the Ld. CITA has deleted the penalty on the ground that the assesses's claim is a bona fide one, all the particulars were fully disclosed in the return itself, supported by audit reports under Section 80 IA(7) in Form No. 10 CCB and none of the particulars or figures are found to be untrue or wrong. The disallowance is made only due to a bona fide difference of opinion between the assessee and the Department as to whether the assessee is a 'developer' or 'contractor'. It further appears that relying on the decision passed in the matter of Reliance Petro Products Pvt. Ltd., reported in 322 ITR 158 (SC) the penalty was deleted by the Ld. CIT(A) which according to us is without any ambiguity so as to warrant interference. We, thus, find all the appeals preferred by the revenue as above as devoid of any merit and therefore, dismissed." Having heard the Learned Counsel appearing for the parties and having regard to the facts and circumstances of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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