THE INDIAN HUME PIPE COMPANY LIMITED, MUMBAI V. DCIT - CC-3(3), MUMBAI

ITA 2868/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9082 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Keywords: Business income; Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 2868/MUM/2016 ASSESSMENT YEAR: 2011-12 THE INDIAN HUME PIPE CO. LTD. VS. DCIT CC - 3( 3) CONSTRUCTION HOUSE, 2 ND FLOOR, AIR INDIA BLDG. WALCHAND HIRACHAND ROAD, NARIMAN POINT BALLARD ESTATE, MUMBAI 400021 MUMBAI 400001 PAN : AAACT4063D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BHAVIN SHAH,AR REVENUE BY: SHRI R.P. MEENA, CIT(DR) DATE OF HEARING : 03/0 1/2017 DATE OF PRONOUNCEMENT: 03/01/2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR 2011-12. THE APPEAL IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER (APPEALS) 51, MUMBAI AND ARISES OUT OF THE ORDER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT). 2. THIS SOLE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80IA OF THE ACT RELYING ON THE DECISI ON OF THE ITAT, MUMBAI FOR THE A.Y. 2005-06 TO 2007-08 FOR THE REAS ONS MENTIONED IN THE ORDER. FURTHER IT IS STATED, THAT THE LEARNED C IT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF CLAIM OF DEDUCTION U /S 80IA OF THE ACT, TREATING THE APPELLANT AS WORKS CONTRACTOR AND NOT AS DEVELOPER FOR THE REASONS MENTIONED IN THE ORDER. ITA NO. 2868/MUM/2016 2 3. IN A NUTSHELL, THE FACTS ARE THAT THE ASSESSEE I S A MANUFACTURER OF HUME PIPES AND IS ENGAGED IN EXECUTION OF CIVIL PRO JECTS. IT CLAIMED DEDUCTION U/S 80IA AMOUNTING TO RS. 35,85,38,000/- IN RESPECT OF THE BUSINESS INCOME EARNED FROM EXECUTION OF PROJECT RE LEVANT TO DEVELOPMENT OF INFRASTRUCTURE FACILITY, SUCH AS WAT ER SUPPLY AND SEWERAGE PROJECTS BOTH COMPOSITE AND PART OF COMP OSITE PROJECTS. IN RESPONSE TO A QUERY RAISED BY THE ASSESSING OFFI CER (AO), THE ASSESSEE FILED A WRITTEN SUBMISSION DATED 28.01.201 4 WHICH HAS BEEN EXTRACTED AT PAGE 2-8 OF THE ASSESSMENT ORDER. THE AO WAS NOT CONVINCED WITH THE EXPLANATION GIVEN BY THE ASSESSE E AND RELYING ON THE ORDER OF THE ITAT MUMBAI IN THE CASE OF M/S. B.T. PATIL & SONS, RENAGAUM CONSTRUCTION PVT. LTD. VS. ACIT, CIRCLE-2, KOLHAPUR , ITAT CHENNAI IN THE CASE OF ACIT VS. INDWELL INANINGS LTD . (ITAT, CHENNAI) 313 ITR (AT) 118, DISALLOWED THE CLAIM OF DEDUCTION U/S 80IA AMOUNTING TO RS. 35,85,38,000/- MADE BY THE ASSESSE E. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEAR NED CIT(A). WE FIND THAT THE LEARNED CIT(A) HAS MENTIONED THAT A SSESSEE, HOWEVER, FAIRLY AGREED THAT THIS ISSUE WAS DECIDED AGAINST I T BY CIT(A) IN AYS 2008-09, 2009-10 & 2010-11 AND IT WAS CONFIRMED BY HON'BLE ITAT. THUS, IT IS STATED THAT THE ISSUE IS COVERED AGAINS T THE ASSESSEE BY THE DECISION OF JURISDICTIONAL ITAT. THE LEARNED CIT( A) THUS CONFIRMED THE DISALLOWANCE MADE BY THE A.O. 5. BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE R ELIED ON THE ORDER OF THE ITAT, MUMBAI IN THE CASE OF THE ASSESS EE FOR THE A.Y. 2009-10 (ITA NO. 16/MUM/2013) AND A.Y. 2010-11 (ITA NO. 3963/MUM/2013). 6. THE LEARNED DR FAIRLY AGREES WITH THE FACTS MENT IONED IN THE ORDER OF THE ITAT IN THE CASE OF THE ASSESSEE FOR T HE A.Y. 2009-10 AND 2010-11. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE CO-ORDINATE BE NCH IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2009-10 HAS HELD AS UNDER : ON A PERUSAL OF THE ORDER PASSED BY LD. CIT(A), WE NOTICE THAT THE FIRST APPELLATE AUTHORITY HAS FOLLOWED THE DECISION RENDERE D BY THE TRIBUNAL IN THE ASSESSEES OWN CASE WITH THE UNDERSTANDING THAT THE TRIBUNAL HAS CONFIRMED THE DISALLOWANCE OF CLAIM MADE U/S 80IA OF THE ACT. A PERUSAL OF THE ORDER ITA NO. 2868/MUM/2016 3 PASSED BY THE TRIBUNAL FOR ASSESSMENT YEAR 2008-09 ( REFERRED SUPRA) WOULD SHOW THAT THE ITAT HAS UPHELD THE DISALLOWANCE MADE U /S 80IA ONLY IN RESPECT OF THE PROJECTS UNDERTAKEN IN THE EARLIER YE ARS. IN RESPECT OF THE PROJECTS UNDERTAKEN DURING THE YEARS RELEVANT TO THE ASSESSMENT YEARS 2007- 08 AND 2008-09, THE MATTER OF CLAIM FOR DEDUCTION U/S 80IA WAS RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR FRESH EXAMINATION. CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUNAL IN THE EARLIER YEARS, WE REST ORE THE MATTER RELATING TO DEDUCTION U/S 80IA IN RESPECT OF THE PROJECTS UNDERTAK EN DURING THE YEARS RELEVANT TO THE ASSESSMENT YEARS 2007-08, 2008-09 A ND ALSO THE YEAR UNDER CONSIDERATION TO THE FILE OF THE LD. CIT(A) FOR MAKI NG FRESH EXAMINATION IN THE LIGHT OF OBSERVATIONS MADE BY THE TRIBUNAL IN ITS O RDER PASSED FOR ASSESSMENT YEAR 2007-08. 7.1 WE ALSO FIND THAT IN THE CASE OF THE ASSESSEE F OR THE A.Y. 2010- 11, ON SIMILAR FACTS, THE CO-ORDINATE BENCH FOLLOWE D THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2 008-09 AND RESTORED BACK THE MATTER TO THE FILE OF THE AO FOR FRESH ADJ UDICATION. 8. IN VIEW OF THE ABOVE, WE FOLLOW THE ORDER OF THE CO-ORDINATE BENCH AS MENTIONED AT PARA 7 AND 7.1 HERE-IN-ABOVE AND SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO T HE FILE OF THE AO FOR FRESH ADJUDICATION AS PER THE PROVISIONS OF THE ACT AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 03/01/2017 SD/- SD/- (MAHAVIR SINGH) (N. K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED: 03/01/2017 BISWAJIT, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI ITA NO. 2868/MUM/2016 4 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI