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TMI Blog2024 (6) TMI 1416X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that two appeals preferred by the Revenue for the Assessment Year 2011-12 are listed before us. The Learned Departmental Representative submitted that the Revenue had filed the appeal electronically and thereafter, furnished appeals in physical form. Two separate appeal numbers, being ITA No. 1152/Mum/2024 and ITA No. 1153/Mum/2024, were inadvertently allotted by the Registry for the same appeal. It was submitted that ITA No. 1152/Mum/2024 listed before us be treated as a duplicate appeal and be dismissed as withdrawn. The Learned Authorized Representative did not have any objection to the aforesaid submission. Accordingly, the ITA No. 1152/Mum/2024 preferred by the Revenue is dismissed. Appeal by Revenue : ITA No. 1152/Mum/2024 Cross Objection by the Assessee: Co. No. 71/Mum/2024 4. The appeal filed by the Revenue [ITA No. 1152/Mum/2024] and Cross-Objection filed by the Assessee [CO No. 71/Mum/2024] pertaining to Assessment Year 2011-12 arise from the order of the Learned Commissioner of Income Tax (Appeals)- 50, Mumbai [hereinafter referred to as 'the CIT(A)'] passed on 31/01/2024, which in turn arose from the order, dated 31/12/2018, passed under Section 143(3) rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 479/- under the normal provisions of the Act. The Appellant declared Book Profit of INR.72,96,88,814/- under Section 115JB of the Act. Subsequently, the Appellant filed revised return of income on 12/04/2012 and thereafter, on 07/08/2012. As per the revised return of income filed on 07/08/2012, the Appellant declared total taxable income of INR.22,06,52,480/- under the normal provisions of the Act, while the Book Profit computed under Section 115JB of the Act did not undergo any revision. Since the tax payable under Section 115JB of the Act was higher than the tax payable under the normal provisions of the Act, Minimum Alternative Tax (MAT) liability of INR.14,54,30,630/- was determined as income tax payable for the Assessment Year 2011-12. 6.2. The regular assessment in the case of the Appellant was completed under Section 143(3) of the Act vide order, dated 27/04/2015. Thereafter, reassessment proceedings were initiated in the case of the Appellant under Section 147 of the Act based on information received from the Investigation Wing - Deputy Director Income Tax (Investigation) - Unit 4(3), Mumbai and notice, dated 27/03/2018, was issued under Section 148 of the Act. Subsequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,32,000/-) engaged as subcontractors and as well as the commercial expediency of making such payments. Notices issued under Section 133(6) of the Act to both the aforesaid parties could not be served at their office addresses. The Assessee also failed to produce the proprietor/key-persons of the aforesaid parties during the assessment proceedings. As per the report of Investigation Wing money deposited in the bank accounts of the aforesaid parties were withdrawn soon thereafter. This clearly showed that the entities were shell entities not having any business of their own. 8.2. Per contra, it has been contended on behalf of the Assessee that the Assessee company was part of Shapoorji Pallonji Group and was involved in execution of large and complex civil engineering projects. The Assessee generally sub-contracted a part of the main contract work to other sub-contractors to ensure timely completion of the contract. The services of M/s. Kumar Enterprises and M/s Shivam Enterprises were availed by the Assessee for ongoing projects and a part of the work was subcontracted to the said entities. A statement providing details of the projects in respect of which services of the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the execution of large and complex civil engineering projects in India as well as abroad. For the purpose of carrying out work, the appellant had engaged several sub contractors. There is no dispute on the fact that, the projects for which the sub-contractors were deployed have been completed and handed over to the clients who were various Government and semi-Government authorities. It was not possible for the appellant to carry out such contract work without engaging sub contractors to carry out the same. It is also not a matter of dispute that the income earned from such activities has been offered for tax. At the same time, it is also observed that these contractors were not traceable on the address provided by the appellant. In the said facts of the case, the entire subcontract payment made to these two subcontractors cannot be disallowed. In the identical set of facts, the Honble ITAT Ahmedabad as discussed above, in case of Ultratech Transmission (P) Ltd, relying on various decision, has restricted the disallowance to 10%. In the Appellant's own case for the A.Y 2010-11, on the same facts, the A.O, disallowed 12.5% of subcontract charges. In the backdrop of these facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer had, in similar facts and circumstances, disallowed 12.5% of payments made to sub-contractors. During the course of hearing, it was pointed out by the Learned Department Representative that the Revenue had not accepted the aforesaid assessment order for the Assessment Year 2010-2011 and revision proceedings under Section 263 of the Act were initiated. In this regard, it was clarified by the Learned Authorized Representative for the Appellant that the Revenue had sought to revise the aforesaid assessment order under section 263 of the Act, however, the revision order passed under section 263 of the act was set aside by the Tribunal on the ground that the view taken by the Assessing Officer was a plausible view. Thus, the assessment order for the Assessment Year 2010-2011 on which reliance was placed by the CIT(A) stands restored. 10. In view of the above and taking into account the facts and circumstances of the present case, we are not inclined to interfere with the order passed by CIT(A) restricting the disallowance to 15% of payments made to sub-contractors. There is nothing on record to persuade us to take a view that disallowance at a higher rate was warranted in the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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