Assistant Commisisoner of Income-tax, V. B.T. Patil & Sons Belgaum Construction P.Ltd., Kolhapur

ITA 1194/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7756 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 28-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ULHAS KINI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / ITA NO. 1194 /P U N/201 5 / ASSESSMENT YEAR : 20 1 2 - 1 3 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2, KOLHAPUR . / APPELLANT VS. B.T. PATIL & SONS BELGAUM CONSTRUCTION PVT. LTD., REG. OFFICE NO.301, C.S. NO.2141, SI DHIVINAYAK CLASSIC, E - WARD, TARABAI PARK, KOLHAPUR . . / RESPONDENT PAN: AA ACB7343N / APPELLANT BY : SHRI ACHAL SHARMA , ADDL. CIT / RESPONDENT BY : SHRI ULHAS KINI / DATE OF HEARING : 0 3 .0 8 . 2017 / DATE OF PRONOUNCEMENT: 09 . 0 8 .201 7 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - 1 & 2 , KOLHAPUR , DATED 16.06.2015 RELATING TO ASSESSMENT YEAR 20 1 2 - 1 3 AGAIN ST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUND S OF APPEAL : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A PPEALS ) ERRED IN ALLOWING CLAIM OF DEDUCT ION U/S. 80IA(4) OF RS.4,81,83,764/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS NOT A DEVELOPER BUT ONLY A WORKS CONTRACTOR. ITA NO. 1194 /P U N/20 1 5 B.T. PATIL & SONS BELGAUM CONSTRUCTION PVT. LTD. 2 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A), KOLHAPUR BE VACATED AND THAT ORDER OF THE ASSESSING OFFICER BE RES TORED. 3. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 5. THE ISSUE ARISING IN THE PRESENT APPEAL FILED BY THE REVENUE IS AGAINST ALLOWABILITY OF CLAIM OF DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. 6. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS ENGAGED IN EXECUTION OF CIVIL ENGINEERING CONTRACTS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.6,54,04,290/ - , AFTER CLAIMING DEDUCTION UNDER CHAPTER VIA AT RS.4,85,36,764/ - . THE ASSESS EE WAS ENGAGED IN THE BUSINESS OF DEVELOPING INFRASTRUCTURAL FACILITIES I.E. CONSTRUCTION OF CANALS / TUNNELS AND ALSO MANUFACTURING, SUPPLY & ERECTION FOR CREST GATES, CRANES & HOISTS FOR DIFFERENT IRRIGATION / WATER SUPPLY / HYDRO POWER PROJECTS, AWARDED ON CONTRACT IN PURSUANCE TO AGREEMENT ENTERED INTO WITH GOVERNMENT OF MAHARASHTRA OR ITS AGENCIES. THE ASSESSEE HAD CLAIMED THE DEDUCTION UNDER SECTION 80IA(4) OF THE ACT IN RESPECT OF PROFITS EARNED FROM THE DEVELOPMENT OF INFRASTRUCTURAL FACILITIES. T HE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS CIVIL CONTRACTOR ENGAGED IN THE ACTIVITIES OF EXECUTING CONTRACTS FOR CIVIL WORK. THE ASSESSING OFFICER DENIED THE CLAIM OF ASSESSEE HOLDING THE ASSESSEE NOT A DEVELOPER OF INFRASTRUCTURAL PROJECT BUT MERELY EXECUTING WORKS CONTRACTS AND HENCE, NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. THE ASSESSING OFFICER HAS REFERRED TO VARIOUS CASE LAWS ON ITA NO. 1194 /P U N/20 1 5 B.T. PATIL & SONS BELGAUM CONSTRUCTION PVT. LTD. 3 THE ISSUE INCLUDING THE DECISION IN THE CASE OF ASSESSEE ITSELF IN EARLIER YEARS AND H AS POINTED OUT VIDE PARA 6.5 THAT THE REVENUE IS IN APPEAL BEFORE THE HONBLE HIGH COURT ON THIS ISSUE AND HENCE, THE DENIAL OF CLAIM UNDER SECTION 80IA(4) OF THE ACT AT RS.4.82 CRORES. 7. THE CIT(A) ALLOWED THE CLAIM OF ASSESSEE IN VIEW OF THE DECISION O F THE TRIBUNAL IN EARLIER YEARS INCLUDING THE DECISION OF CIT(A) IN ASSESSMENT YEAR 2011 - 12. 8. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST ELIGIBILITY OF CLAIM OF DEDUCTION UNDER SECTION 80IA(4) OF THE ACT HAS BEEN ADJUDICATED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEARS 2000 - 01 AND 2001 - 02 . IT MAY BE POINTED OUT THAT INITIALLY THE PUNE BENCH OF TRIBUNAL HAD REJECTED THE CLAIM OF ASSESSEE. THE MATTER WAS CARRIED BEFORE THE HONBLE BOMBAY HIGH COURT, WHICH IN ITA NO.1307 /2011 AND IN ITA NO.1640/2011 HAD REMITTED THE ISSUE BACK TO THE TRIBUNAL WITH DIRECTION TO CONSIDER THE SAME AFTER TAKING INTO CONSIDERATION THE DECI SION OF HONBLE HIGH COURT IN THE CASE OF CIT VS. M/S. ABG HEAVY INDUSTRIES LTD. (2010) 322 ITR 323 (BOM). IN THE SECOND ROUND OF LITIGATION, THE TRIBUNAL ALLOWED THE CLAIM OF ASSESSEE DISTINGUISHING THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT. THE TRIBUNAL HELD THE ASSESSEE TO BE ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. THE SAID PROPOSITION LAID DOWN BY THE TRIBUNAL HAS BEEN APPLIED BY THE PUNE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2011 - 12 IN ITA N O.2305/PN/2014, VIDE ORDER DATED 25.11.2016 AND FOLLOWING THE SAME PARITY OF REASONING AS IN EARLIER YEARS, HELD THE ASSESSEE TO BE ENTITLED TO CLAIM THE DEDUCTION UNDER SECTION 80IA(4) OF ITA NO. 1194 /P U N/20 1 5 B.T. PATIL & SONS BELGAUM CONSTRUCTION PVT. LTD. 4 THE ACT VIDE PARAS 5 TO 7. THE SAID ORDER OF THE TRIBUNAL IS BEING REFERRED TO BUT THE FINDINGS ARE NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS FAILED TO CONTROVERT THE FINDINGS OF THE TRIBUNAL IN EARLIER YEARS AND HAS ALSO FAILED TO BRING ON RECORD ANY DECIS ION OF THE JURISDICTIONAL HIGH COURT REVERSING THE FINDINGS OF THE TRIBUNAL. IN VIEW THEREOF, WE FIND NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE AND THE SAME ARE DISMISSED. 10 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 9 TH DAY OF AUGUST , 201 7 . SD/ - SD/ - ( D.KARUNAKARA RAO ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DA TED : 9 TH AUGUST , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 1& 2 , KOLHAPUR ; 4. / THE CIT - I/II, KOLHAPUR / CIT (CENTRAL), PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE