M/s. Emas Expressway Pvt. Ltd., Kolkata V. DCIT, Circle - 8(1), Kolkata, Kolkata

ITA 267/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0603 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 23-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA [BEFORE SHRI P.M. JAGTAP, AM AND SHRI ABY. T. VARKEY, JM] I.T.A. NO. 267/KOL/2016 ASSESSMENT YEAR: 2008-09 M/S. EMAS EXPRESSWAY PVT. LTD................................APPELLANT 53A, MIRZA GHALIB STREET, KOLKATA 700016 [PAN : AAACE9530E] D.C.I.T, CIR 8(1)...RESPONDENT AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069 APPEARANCES BY: SHRI G. BANERJEE, ADVOCATE, APPEARING ON BEHALF OF THE ASSESSEE. SHRI P.K. MONDAL, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : DECEMBER 21, 2017 DATE OF PRONOUNCING THE ORDER : DECEMBER 22, 2017 ORDER PER P.M. JAGTAP, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) 16, KOLKATA DATED 03.12.2016 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DISALLOWANCE MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IA IN RESPECT OF THE INTEREST WRITTEN BACK AMOUNTING TO RS. 4,94,57,248/-, INSURANCE CLAIM RECEIPTS AMOUNTING TO RS. 15,46,936/- AND OTHER INCOME AMOUNTING TO RS. 4,808/-. 2. THE ASSESSEE IN THE PRESENT IS A COMPANY WHICH IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF CONSTRUCTION OF HIGHWAYS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS ORIGINALLY FILED BY IT ON 29.09.2008 DECLARING A TOTAL INCOME OF RS. 8,62,32,582/-. IN THE SAID RETURN, THE INTEREST LIABILITY WRITTEN BACK AMOUNTING TO RS. 2 I.T.A. NO. 267/KOL/2016 ASSESSMENT YEAR: 2008-09 EMAS HIGHWAY PVT LTD 4,94,57,248/- WAS DECLARED BY THE ASSESSEE COMPANY AS ITS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. SUBSEQUENTLY A REVISED RETURN WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME OF RS. 3,67,75,334/- WHEREIN THE SAID AMOUNT WAS TREATED BY THE ASSESSEE AS ITS INCOME FROM BUSINESS ENTITLED FOR DEDUCTION UNDER SECTION 80IA. ACCORDING TO THE A.O., THE INTEREST LIABILITY WRITTEN BACK WAS NOT THE INCOME OF THE ASSESSEE COMPANY EARNED FROM ITS BUSINESS OF HIGHWAY DEVELOPMENT. HE ACCORDINGLY HELD THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IA IN RESPECT OF THE SAID AMOUNT. HE ALSO HELD THAT THE INSURANCE CLAIM RECEIPTS AMOUNTING TO RS. 15,46,936/- AND OTHER INCOME OF RS. 4,808/- WERE CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE COMPANY UNDER THE HEAD INCOME FROM OTHER SOURCES AND THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IA IN RESPECT OF THE SAME. ACCORDINGLY, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE A.O. AT RS. 8,62,32,582/- IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 31.12.2010. 3. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) UPHELD THE ACTION OF THE A.O. IN DISALLOWING THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IA IN RESPECT OF INTEREST LIABILITY WRITTEN BACK, INSURANCE CLAIM RECEIPTS AND OTHER INCOME BY HOLDING THAT THE SAME DID NOT CONSTITUTE THE INCOME OF THE ASSESSEE DERIVED FROM THE BUSINESS OF HIGHWAY DEVELOPMENT. IN SUPPORT OF THIS CONCLUSION, THE LD. CIT(A) RELIED ON 3 I.T.A. NO. 267/KOL/2016 ASSESSMENT YEAR: 2008-09 EMAS HIGHWAY PVT LTD THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS CIT 317 ITR 218 AND PANDIAN CHEMICAL LTD. VS CIT 262 ITR 278. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS AGREED BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THE ISSUE INVOLVED IN THIS APPEAL OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL RENDERED IN THE CASE OF MAPEX INFRASTRUCTURE PVT. LTD., THE SISTER CONCERN OF THE ASSESSSEE VIDE ITS ORDER DATED 13.12.2017 PASSED IN ITA NO. 266/KOL/2016. A COPY OF THE SAID ORDER IS ALSO PLACED ON RECORD BEFORE US AND PERUSAL OF THE SAME SHOWS THAT A SIMILAR ISSUE INVOLVED IN THE CASE OF M/S. MAPEX INFRSTRUCTURE PVT. LTD. HAS BEEN RESTORED BY THE TRIBUNAL TO THE FILE OF THE A.O. FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO 4 OF HIS ORDER: WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE AY 2006-07 WAS THE FIRST YEAR WHEREIN THE ASSESSEE CLAIMED DEDUCTION U/S. 80IA OF THE ACT FOR THE PROJECTS OF NH 2 (PANAGARH-PALSIT SECTION). IN THE ORIGINAL RETURN OF INCOME, ASSESSEE COMPANY HAD WRITTEN BACK INTEREST LIABILITY OF RS.3,47,72,165/- AND THE SAME WAS INITIALLY SHOWN AS INCOME FROM OTHER SOURCES AND OFFERED FOR TAXATION. HOWEVER, IN THE REVISED RETURN LATER FILED, THE ASSESSEE HAS TREATED THE INTEREST INCOME AS INCOME FROM BUSINESS ACTIVITY AND CLAIMED DEDUCTION U/S. 80IA OF THE ACT. WE NOTE THAT THE ASSESSEE HAD TAKEN LOAN FROM M/S. GAMUDA WCT(OFFSHORE) PVT. LTD. AND AS PER THE LOAN AGREEMENT BETWEEN THE PARTIES THERE WAS A CLAUSE FOR WAIVER OF INTEREST AND SINCE THE LENDER COMPANY M/S. GAMUDA WCT(OFFSHORE) PVT. LTD HAD WAIVED THE INTEREST OFF, THE ASSESSEE HAD WRITTEN BACK THE AMOUNT OF INTEREST OF RS. 3,47,72,165/- AS INTEREST INCOME BUT MISTAKENLY IN THE ORIGINAL ASSESSMENT IT WAS SHOWN AS INCOME FROM OTHER SOURCES WHEREAS ACCORDING TO THE ASSESSEE, THE 4 I.T.A. NO. 267/KOL/2016 ASSESSMENT YEAR: 2008-09 EMAS HIGHWAY PVT LTD LENDER COMPANY HAS SANCTIONED THE LOAN FOR THE PROJECT FOR WHICH SEC. 80IA DEDUCTION HAS BEEN ALLOWED, AND THEREFORE THE INTEREST IS INEXTRICABLY LINKED WITH THE PROJECT FOR WHICH 80IA DEDUCTION HAS BEEN ALLOWED AND, THEREFORE, THE SAID AMOUNT OF INTEREST SHOULD BE ALLOWED FOR DEDUCTION AS PER SEC. 80IA OF THE ACT. WE NOTE THAT THE AUTHORITIES BELOW DID NOT HAD ANY OCCASION TO VERIFY WHETHER THE ASSESSEES THIS CONTENTION IS CORRECT OR NOT. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE ARE INCLINED TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF THE AO WITH A DIRECTION TO VERIFY AS TO WHETHER THE ASSESSEES CONTENTION THAT THE LOAN AMOUNT FROM M/S. GAMUDA WCT(OFFSHORE) PVT. LTD. WAS SANCTIONED FOR THE PURPOSE OF THE PROJECT FOR WHICH 80IA DEDUCTION WAS ALLOWED. IF THE LOAN WAS SANCTIONED FOR THE PROJECT FOR WHICH 80IA DEDUCTION HAS BEEN ALLOWED, THEN THE INTEREST AMOUNT WHICH HAS BEEN WAIVED OFF IS TO BE ADDED TO THE INCOME OF THE ASSESSEE AND HIGHER DEDUCTION U/S. 80IA OF THE ACT IS TO BE ALLOWED. AND IF THE LOAN WAS NOT FOR THE PROJECT FOR WHICH 80IA DEDUCTION HAS BEEN ALLOWED, THEN THE INTEREST AMOUNT WHICH HAS BEEN WAIVED OFF NEED NOT BE ADDED FOR DEDUCTION UNDER 80IA. WITH THE AFORESAID DIRECTION, THE ISSUE IN RESPECT OF INTEREST ELEMENT IS DISPOSED OFF. COMING TO THE INSURANCE CLAIM OF RS. 9,52,547/-, WE NOTE THAT THE AUTHORITIES BELOW HAS NOT APPLIED THEIR MIND IN RESPECT OF THE SAID CLAIM OF THE ASSESSEE, THEREFORE, WE ARE INCLINED TO SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND REMAND THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD AND BY A SPEAKING ORDER. 5. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THAT OF THE CASE OF THE M/S. MAPEX INFRASTRUCTURE PVT. LTD. (SUPRA), WE RESPECTFULLY FOLLOW THE DECISION RENDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE SAID CASE AND RESTORE THE MATTER TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH AS PER THE SAME DIRECTION AS GIVEN IN THE CASE OF M/S. MAPEX INFRASTRUCTURE PVT. LTD. 5 I.T.A. NO. 267/KOL/2016 ASSESSMENT YEAR: 2008-09 EMAS HIGHWAY PVT LTD 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER, 2017. SD/- SD/- (ABY.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22/12/2017 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. M/S. EMAS INFRASTRUCTURE PVT. LTD., 53A, MIRZA GHALIB STREET, KOLKATA 16. 2. DCIT, CIRCLE 8(1), AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 69. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA