Gujarat Urban Development Co. Ltd., Gandhinagar V. The Asstt. Commissioner of Income Tax, Gandhinagar Circle, Gandhinagar

ITA 185/AHD/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2865 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 20-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Retrospective amendment
• Section: 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.185/AHD/2017 / ASSTT. YEAR: 2011-12 GUJARAT URBAN DEVELOPMENT CO.LTD. 6 TH BLOCK, 5 TH FLOOR UDYOG BHAVAN SECTOR 11 GANDHINAGAR 382 011. PAN : AABCG 1330 R. VS THE ACIT, GNR CIR. GANDHINAGAR. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI MEHUL K. PATEL, AR REVENUE BY : SHRI MUDIT NAGPAL, SR.DR / DATE OF HEARING : 25/10/2018 / DATE OF PRONOUNCEMENT: 01/11/2018 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A), GANDHINAGAR, AHMEDABAD DATED 5.7.2016 PASSED FOR TH E ASSTT.YEAR 2012-13. 2. REGISTRY HAS POINTED OUT THAT APPEAL OF THE ASSE SSEE IS TIME BARRED BY 123 DAYS. IN ORDER TO EXPLAIN THE DELAY, THE ASSES SEE HAS FILED AN APPLICATION STATING THAT ON ACCOUNT OF TRANSFER AND ORGANIZATIO NAL CHANGES IN THE FINANCE DEPARTMENT OF THE ASSESSEE, FILES HAVE BEEN DISLOCA TED AND MISPLACED. IT WENT OUT OF FOCUS OF THE CONCERN OFFICER, AND THEREFORE, APPEAL COULD NOT BE FILED WELL IN TIME. TAKING INTO CONSIDERATION EXPLANATIO N OF THE ASSESSEE, WE FIND THAT ASSESSEE HAS BEEN PREVENTED BY REASONABLE CAUS E FOR NOT FILING THE APPEAL ITA NO.185/AHD/2017 2 IN TIME. THEREFORE, WE CONDONE THE DELAY AND PROCE ED TO DISPOSE OF THE APPEAL ON MERIT. 3. THOUGH THE ASSESSEE HAS TAKEN THREE GROUNDS OF A PPEAL, BUT ITS GRIEVANCES REVOLVES AROUND A SINGLE ISSUE VIDE WHIC H IT HAS CHALLENGED DISALLOWANCE OF CLAIM AMOUNTING TO RS.1,97,04,712/- UNDER SECTION 80IA(4) OF THE INCOME TAX ACT, 1961. 4. THE LD.DR AT THE OUTSET SUBMITTED THAT IDENTICAL ISSUE WAS INVOLVED IN EARLIER YEARS, AND IN THE IMMEDIATELY PRECEDING YEA R I.E. ASSTT.YEAR 2011-12. THE TRIBUNAL HAS CONFIRMED THE DISALLOWANCE VIDE IT S ORDER IN ITA NO.1972/AHD/2014. THE LD.COUNSEL FOR THE ASSESSEE WAS UNABLE TO CONTROVERT TO THIS CONTENTIONS OF THE REVENUE. COPY OF ORDER OF THE TRIBUNAL IN ITA NO.1972/AHD/2014 DATED 28.8.2014 HAS BEEN PLACED ON RECORD. THE DISCUSSION MADE BY THE TRIBUNAL ON THIS ISSUE READS AS UNDER: 6. WE FIND THAT THE TRIBUNAL IN ASSESSEE'S OWN C ASE, VIDE A CONSOLIDATED ORDER DATED 19.03.2014, HAS HELD AS UN DER:- '10.1. BRIEFLY STATED FACTS ARE THAT THE CASE OF T HE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.1 43(3) OF THE ACT WAS FRAMED VIDE ORDER DATED 10/12/2010, THEREBY THE AO DISALLOWED THE CLAIM OF THE ASSESSEE MADE U/S.80IA(4) OF THE A CT. AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, REJECTED THE APPEA L. 11. GROUND NOS.1, 2 & 3 ARE INTER-CONNECTED AND, TH EREFORE, THE SAME ARE DECIDED TOGETHER. 11.1. THE LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A DEVELOPER AND, THEREFORE, HE IS ENTITLED FOR DEDU CTION U/S.80-IA(4) OF THE ACT. 11.2. ON THE CONTRARY, LD.CIT-DR/SR.DR SUBMITTED TH AT THE ORDER OF THE LD.CIT(A) IS JUSTIFIED. HE DREW OUR ATTENTION T OWARDS THE DECISION OF THE LD.CIT(A) AS CONTAINED IN PARA-5.1 OF HIS OR DER. AFTER SOME ITA NO.185/AHD/2017 3 ARGUMENT, LD.SR.COUNSEL FOR THE ASSESSEE FAIRLY CON CEDED THAT THE ISSUE IS DECIDED AGAINST THE ASSESSEE BY THE HON'BLE JURI SDICTIONAL HIGH COURT RENDERED IN THE CASE OF KATIRA CONSTRUCTION V S. UNION OF INDIA REPORTED AT (2013) 352 ITR 513 (GUJ.). 12. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDI NG ON FACT, WHICH READS AS UNDER:- '5.1. I HAVE CONSIDERED THE FACTS OF THE CASE, THE SUBMISSIONS, THE ASSESSMENT ORDER, THE AMENDMENT IN THE LAW AND THE DECISIONS OF THE COURTS. THE FOLLOWING PERTINEN T OBSERVATIONS ARE MADE AFTER CONSIDERING THESE:- THERE IS NO DOUBT THAT THE APPELLANT WORKS AS A NO DAL AGENCY FOR IMPLEMENTATION OF VARIOUS WORKS UNDERTAKEN/DECIDED BY THE GOVERNMENT. THE APPELLANT BEARS NO RISK WHATSOEVER OF THE COST OR SUCCESS OF THE PROJECTS. THE APPELLANT GETS A FIXED PERCENTAGE OF THE MONEY SPENT ON THE PROJECT. SUPPOSEDLY, ON A PROJECT ORIGINALLY ESTIMATED AT RS.100 CRORE, THE ACTUAL CO ST OVER RUNS TO ANY AMOUNT MAY BE EVEN RS.500 CRORE; T HE ASSESSEE LOOSES NOTHING. IN FACT ITS OWN ALLOCATION INCREASES AND IT GAINS. SIMILARLY, IT DOESN'T GET A NY BENEFIT WHEN IT SAVES COST OR IS MORE EFFICIENT. IN FACT, THE GRANTS FOR THE PROJECTS IS NOT ITS REV ENUE INCOME AT ALL. IN FACT, IN VARIOUS DECISIONS THE GR ANTS WHICH ARE UTILIZED FOR SPECIFIED PROJECTS HAVE BEEN HELD TO BE NOT INCOME BUT DIVERSION OF FUNDS AT SOURCE. THE DECISIONS INCLUDE THAT OF HON'BLE ITAT, AHMEDABAD BENCH IN THE CASE OF GUJARAT SAFAI KAMDAR VIKAS NIGAM VS. ACIT, GANDHINAGAR CIRCLE, GANDHINAGAR (ITA NO.3232/AHD/2008, ORDER DATED 17/04/2009, AND GUJARAT STATE DISASTER MANAGEMENT AUTHORITY VS. ACIT, GANDHINAGAR CIRCLE,IN THE ENTIRETY OF FACTS A ND CIRCUMSTANCES, THE APPELLANT IS DOING THE WORK OF A ITA NO.185/AHD/2017 4 CONCERN ENGAGED IN WORK WHICH IS IN THE NATURE OF A WORKS CONTACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT) AND EXECUTED BY IT. HE RE IT IS TO BE NOTED THAT AS PER THE AMENDED EXPLANATI ON BELOW SECTION 80IA(13) WITH RETROSPECTIVE EFFECT FR OM 1.4.2000; THE WORK SHOULD NOT BE OF THE NATURE (EMPHASIS SUPPLIED) OF CONTRACT AND NOT ONLY CONTRA CT. HERE THE PROJECT COSTS AND SOURCE THEREOF NOT BEING REVENUE OF THE APPELLANT, IT BEING NOT AFFECTED BY THE ACTUAL COST AND EFFICIENCY OF WORK, THE ASSETS CREA TED AND THE SOURCE NOT BEING OF THE APPELLANT AT ANY ST AGE AND IT BEING ENTITLED TO A FIXED REMUNERATION FOR I TS PROFESSIONAL SERVICES; IT CLEARLY IS FALLING IN THE EXCLUDED CATEGORY AS PER THE AMENDED EXPLANATION BELOW SECTION 80IA(13); AND THEREFORE, NOT ELIGIBLE FOR DEDUCTION. THE DECISION OF THE HON'BLE MUMBAI HIGH COURT IN TH E CASE OF CIT VS. ABG HEAVY INDUSTRIES LTD. 322 ITR 323 IS NOT ON THE ISSUE OF WHETHER THE ACTIVITY OF THE CONCERN IS OF THE NATURE OF A WORKS CONTACT. THE DECISION OF HONORABLE SUPREME COURT IN THE CASE OF GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION 227 ITR 414 IS ALSO NOT APPLICABLE AS IN THAT CASE THE QUES TION WAS NOT WHETHER THE APPELLANT WAS DOING THE ACTIVIT IES IN ITS OWN RIGHT OR AS A NODAL AGENCY AS IN THE PRE SENT CASE. SIMILARLY, THE FACTS AND QUESTION ARE DISTINGUISHABLE IN OTHER CASES CITED BY THE APPELLA NT. THE APPELLANT IS HELD NOT ELIGIBLE FOR DEDUCTION CL AIMED U/S.80IA(4) AND THE DECISION OF THE AO IS UPHELD. T HE FIRST TWO GROUNDS OF APPEAL ARE THEREFORE, DISMISSE D.' 12.1. WE FIND ONE OF THE OBJECTIONS OF THE LD.CIT( A) WAS THAT THE ASSESSEE DOES NOT BEAR ANY RISK AND CONSEQUENCE S ARISING FROM THE PROJECT. IN VIEW OF THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF KATIRA CONSTRUCTION LTD. UNION OF INDIA(SUPRA), WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), THEREFORE GROUND NOS.1 TO 3 OF THE ASSESSEE'S APPEAL ARE REJECTED.' ITA NO.185/AHD/2017 5 7. FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING THE PRECEDENT, WE DISMISS THESE ADDITIONAL GROUNDS OF APPEAL OF THE A SSESSEE. 5. THERE IS NO DISPARITY OF THE FACTS, AND THEREFOR E, FOLLOWING THE ORDER OF CO-ORDINATE BENCH OF THE TRIBUNAL (SUPRA), WE DO NO T FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. IT IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED ORDER PRONOUNCED IN THE COURT ON 1 ST NOVEMBER, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER