The ACIT,B.K. Circle, Palanpur V. Chhaniyana Majur Kamdar Sahkari Mandali Ltd., Banaskantha

ITA 2060/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89363 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 19-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Assessee Lawyers: M K PATEL
• Section: 143(3)

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD 00 , ! ' #$, % & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ ITA NO. 2060/AHD/2011 % ) *)/ ASSESSMENT YEAR: 2008-2009 ACIT, B.K. CIRCLE PALANPUR. VS CHHANIYANA MAJUR KAMDAR SAHKARI MANDALI LTD. VILLAGE : CHHANIYANA TA: VADGAM, DIST. B.K. PAN :AAAAT 6955 E +, / (APPELLANT) -. +, / (RESPONDENT) REVENUE BY : SHRI ROOPCHAND, DR ASSESSEE(S) BY : SHRI M.K. PATEL / DATE OF HEARING : 29/04/2015 / DATE OF PRONOUNCEMENT: 30/04/2015 // O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER O F INCOME-TAX (APPEALS)-XX, AHMEDABAD DATED 23.6.2011. 2. THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE CIT(A) ERRED IN DIRECTING TO ALLOW DEDUCTION OF RS. 44,19,821/- UNDER SECTION 80P(2)(A)(IV) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND FILED RETURN OF INCOME ON 30.9.2008 SHO WING THE TOTAL INCOME AT NIL AFTER CLAIMING DEDUCTION UNDER SECTIO N 80P(2)(A)(IV) OF THE ACT OF RS.44,19,821/-. THE AO DENIED THE CLAIM FOR DEDUCTION TO THE ASSESSEE ON THE GROUND THAT DEDUCTION WAS CLAIMED B Y THE ASSESSEE UNDER SECTION 80P(2)(A)(IV) AND NOT UNDER SECTION 8 0P(2)(A)(VI) OF THE ACT, AND THE ASSESSEE HAS NOT FILED A REVISED RETUR N OF INCOME, AND IN ITA NO.2060/AHD/2011 2 VIEW OF THE DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF GOETZE INDIA LTD. VS. CIT, 284 ITR 323 (SC) THE RETURN FIL ED BY THE ASSESSEE CANNOT BE REVISED BY WAY OF A LETTER. FURTHER, THE AO OBSERVED THAT THE ASSESSEE IS COOPERATIVE SOCIETY FORMED BY THE CONTR ACTOR TO GET WORK DONE BY THE SUB-CONTRACTORS, AND HAS CLAIMED DEDUCT ION FROM THE PROFIT UNDER SECTION 80P OF THE ACT. ACCORDING TO THE AO , THE DEDUCTION UNDER SECTION 80P(2)(A)(VI) OF THE ACT IS ALLOWABLE TO A COOPERATIVE SOCIETY FORMED BY THE LABOURERS, WHO DO THE WORK COLLECTIVE LY AND ARE BENEFITED BY THIS SECTION, AND NOT AS THE INTENT OF THE ASSES SEE. 4. ON APPEAL, THE CIT(A) OBSERVED THAT THE FIRST GR OUND ON WHICH THE AO HAS DISALLOWED THE DEDUCTION TO THE ASSESSEE UND ER SECTION 80P(2)(A)(IV) IS THAT THE ASSESSEE, IN THE RETURN O F INCOME, HAD CLAIMED DEDUCTION UNDER SECTION 80P(2)(A)(IV) OF THE ACT AN D DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED DEDUCT ION UNDER SECTION 80P(2)(A)(VI) OF THE ACT. THE AO HAS HELD THAT IN VIEW OF THE SUPREME COURTS DECISION IN THE CASE OF GOETZE INDIA LTD. V S. CIT, 284 ITR 323 (SC) DEDUCTION CANNOT BE ALLOWED SINCE THE CLAIM WA S NOT MADE BY REVISING THE RETURN. THE CIT(A) OBSERVED THAT THE FINDINGS OF THE AO THAT THE ASSESSEE HAD NOT CLAIMED DEDUCTION IN THE RETURN OF INCOME AT ALL, WAS THEREFORE NOT CORRECT, AND IT WAS NOT IN D ISPUTE THAT DEDUCTION WAS ACTUALLY CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME, AND THEREFORE, HE HELD THAT THE FINDINGS OF THE AO IN T HIS REGARD WAS LEGALLY UNTENABLE. 5. REGARDING SECOND GROUND OF DISALLOWING OF DEDUCT ION UNDER SECTION 80P(2)(IV) TO THE ASSESSEE BY THE AO THAT T HE ASSESSEE WAS GETTING WORK DONE THROUGH SUB-CONTRACTOR, AND WAS N OT DOING WORK ITSELF. THE CIT(A) OBSERVED THAT DURING THE YEAR T HE ASSESSEE WAS AWARDED 13 WORK CONTRACT BY THE GOVERNMENT OF GUJAR AT, AND OUT OF THEM, 8 WORK CONTRACT WERE DONE TOTALLY BY THE ASSE SSEE. WITH REGARD TO THE REMAINING 5 WORK CONTRACT, THE ASSESSEE HIMS ELF HAD DONE WORK ITA NO.2060/AHD/2011 3 TO THE EXTENT OF 47% TO 96% AND THE BALANCE AMOUNT OF WORK WAS GOT DONE THROUGH SUB-CONTRACTORS. HE FURTHER POINTED OU T FROM THE AGREEMENT ENTERED BY THE ASSESSEE WITH THE OUTSIDER S THAT THE TERMS AND CONDITIONS PROVIDE THAT THE WORK CARRIED OUT BY THE PARTY OF THE SECOND PART FOR WHICH THEY WILL BE PAID AT THE SAME RATES, AT WHICH THE WORK HAS BEEN ALLOTTED TO THE PARTY OF THE FIRST PA RT I.E. THE WORK IS TO BE CARRIED OUT AT THE SAME RATES, AND THAT THE WORK SHALL BE CARRIED OUT BY THE PARTY OF THE SECOND PARTY AS PER THE TERMS A ND CONDITIONS OF THE TENDER. THE PARTY OF THE SECOND PARTY SHALL BE RES PONSIBLE FOR ANY FLAW OR DEFECT IN THEIR WORK DUE TO ANY NEGLIGENCE ON TH EIR PART. FROM THIS, THE CIT(A) CONCLUDED THAT THE CONTENTION OF THE ASS ESSEE THAT HE DID NOT DERIVE ANY PROFIT OUT THE WORK GIVEN TO OUTSIDERS W AS REASONABLE. HE ALSO OBSERVED THAT OUT OF TOTAL RECEIPTS OF RS.2,12 ,35,448/-, THE WORK PERTAINED TO RECEIPT OF RS.1,47,79,096/- WAS DONE B Y THE MEMBERS OF THE ASSESSEES COOPERATIVE SOCIETY, AND THE BALANCE WORK PERTAINING TO THE RECEIPTS OF RS.68,07,181/- WAS GOT DONE FROM OU TSIDERS. HE ALSO OBSERVED THAT NONE OF THE WORK ALLOTTED TO THE ASSE SSEE BY THE GOVERNMENT WAS GOT DONE IN TOTALITY BY OUTSIDERS. IN OTHER WORDS, IN FIVE PIECES OF WORK GIVEN TO OUTSIDERS, THE ASSESSE E DID PART OF THE WORK. THEREFORE, HE HELD THAT THE ASSESSEE WAS ENT ITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(VI) OF THE ACT. THE CIT(A) ALSO OBSERVED THAT IN THE IMMEDIATELY PRECEDING TWO ASSESSMENT YEARS, I.E . ASSTT.YEAR 2006- 07 AND 2007-08 IN ASSESSMENT UNDER SECTION 143(3) O F THE ACT, THE AO HIMSELF HAS ALLOWED DEDUCTION TO THE ASSESSEE UNDER SECTION 80P(2)(A)(VI) OF THE ACT. HENCE, HE DIRECTED THE A O TO ALLOW DEDUCTION UNDER SECTION 80P(2)(A)(VI) OF THE ACT TO THE ASSES SEE OF RS.44,19,821/- 6. BEING AGGRIEVED BY THE SAID ORDER, THE REVENUE I S IN APPEAL BEFORE US. 7. THE DR SIMPLY RELIED ON THE ORDER OF THE AO. HE COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE FINDINGS OF THE CIT(A ) THAT THE ASSESSEE HAD ITA NO.2060/AHD/2011 4 CLAIMED DEDUCTION UNDER SECTION 80P(2)(A)(IV) OF TH E ACT IN THE RETURN OF INCOME, AND THAT, OUT OF 13 WORK CONTRACT ALLOTTED BY THE GOVT. OF GUJARAT TO THE ASSESSEE, 8 WORK CONTRACT WERE TOTAL LY DONE BY THE ASSESSEE, AND IN CASE OF BALANCE 4 WORK CONTRACT, T HE WORK RANGING FROM 47% TO 96% WAS DONE BY THE ASSESSEE AND ONLY A PART OF THE WORK WAS GOT DONE THROUGH SUB-CONTRACTORS. NO CONT RACT WORK WAS GOT DONE FULLY FROM SUB-CONTRACTORS. THE SUB-CONTRACTO RS WERE PAID AT THE SAME RATE FOR THE WORK WHICH THE ASSESSEE RECEIVED FROM THE GOVERNMENT AND THE ASSESSEE HAD NOT MADE ANY PROFIT FROM SUB- CONTRACTING THE WORK. THE DR ALSO COULD NOT CONTRO VERT THE FINDINGS OF THE CIT(A) THAT IN THE IMMEDIATELY PRECEDING ASSTT. YEARS 2006-07 AND 2007-08 IN AN ORDER PASSED UNDER SECTION 143(3) OF THE ACT, THE CLAIM FOR DEDUCTION UNDER SECTION 80P WAS ALLOWED TO THE ASSESSEE ON THE VERY SAME SET OF FACTS. WE FIND THAT THE HONBLE S UPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD., (2013) 358 I TR 295 (SC) HAS HELD THAT IN SEVERAL ASSESSMENT YEARS, THE REVENUE ACCEP TED THE ORDER OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND DID NOT PURSUE THE MATTER ANY FURTHER BUT IN RESPECT OF SOME ASSESSMENT YEARS THE MATTER WAS TAKEN UP IN APPEAL BEFORE THE HONBLE HIGH COURT. T HE DEPARTMENT CANNOT BE ALLOWED TO FLIP-FLOP ON THE ISSUE AND IT OUGHT LET THE MATTER REST RATHER THAN PURSUING LITIGATION FOR THE SAKE O F IT. 8. FOR THE FOREGOING REASONS, WE CONFIRM THE ORDER OF THE CIT(A) AND DISMISS THE GROUND OF APPEAL OF THE REVENUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON THURSDAY THE 30 TH APRIL, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 30/04/2015