Ananta Procon Private Limited, Unjha V. The ACIT, Circle Patan, Patan

ITA 349/AHD/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7997 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-02-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 08-09-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: INOURCONSIDEREDVIEW; ITISTHE
• Keywords: Depreciation

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’B’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And MsMADHUMITAROY,JUDICIALMEMBER आयकरअपीलसं./ITANo.349/AHD/2022 & आयकरअपीलसं./ITANo.870/AHD/2023 धििाधरणवरध/Asstt.Years:2017-18&2018-19 AnantaProconPrivateLimited, C-146,GunjBazar, Unjha-384170, Gujarat PAN:AAJCA3644C Vs. TheA.C.I.T, CirclePatan, Patan. (Applicant)(Respondent) Assesseeby:ShriM.KPatel,AR Revenueby:ShriSudhenduDas,CIT.DR सुिवाईकीतारीख/DateofHearing:20/02/2024 घोरणाकीतारीख /DateofPronouncement:05/04/2024 आदेश/ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: ThecaptionedtwoappealshavebeenfiledattheinstanceoftheAssessee againsttheseparateordersoftheLearnedCommissionerofIncomeTax(Appeals) Gandhinagar,arisinginthematterofassessmentorderpassedunders.143(3) r.w.s.153CoftheIncomeTaxAct,1961(here-in-afterreferredtoas"theAct") relevanttotheAssessmentYear2017-18&2018-19. ITAno.349&870/AHD/2022/2023 A.Y.2017-18&2018-19 2 2.Theonlyeffectiveissueraisedbytheassesseeisthattheld.CIT-Aerredin notadjudicatingtheadditionalgroundofappealraisedbytheassesseeduringthe proceedingsbeforehim. 3.Theld.ARbeforeusfiledapaperbookrunningfrompages1to81and submittedthattheassesseehasraisedtheadditionalgroundofappealbeforethe ld.CIT-Aformakingtheclaimundersection80(IA)(4)oftheAct.Insupportofhis contentions,theld.ARdrewourattentiononpages65to81containingthe followingdetails: Sr.No.DescriptionPageNo. 2.AcknowledgmentofE-filingofadditional groundofappealalongwithauditrepoort u/s.80IA(4) 65 3.AcknowledgementofE-filingofwritten submissions,revisedcomputationof income,riskandresponsibility,andtender documentsforclaimu/s.80IA(4) 66 4.Additionalgroundofappeal67 5.Revisedcomputationoftotalincome68-69 6.AuditReportinFormno.10CCBalongwith annexures. 70-81 Itiscertifiedthatabovepagesarefield/onrecordasunder: -BeforeCIT(A):65to81 3.1ThelearnedARalsodrewourattentiononthedetailedsubmissionmade beforethelearnedCIT(Appeal)runningfrompages1to64forclaimingdeduction undersection80(IA)(4)oftheAct.Buttheld.CIT-Awhiledecidingtheappeal filedbytheassesseehasinadvertentlyfailedtoconsidertheadditionalground raisedbytheassesseebeforehim.Thus,theld.ARbeforeusprayedtorestore theissuetothefileoftheld.CIT-Aforfreshadjudicationaspertheprovisionsof law. 4.Ontheotherhand,theld.DRbeforeussubmittedthatitistheonlylegal groundwhichcanberaisedduringthestageofanyproceedings,butafactual ITAno.349&870/AHD/2022/2023 A.Y.2017-18&2018-19 3 issueisnotpermittedtoberaisedduringtheproceedings.However,theld.DR lefttheissueatthediscretionoftheBench. 5.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Theprovisionsofsection250(5)oftheActempower theld.CIT-(Appeal)toadmitanygroundofappealnotspecifiedinthememoof appealifheissatisfiedthattheassesseehasinadvertentlyfailedtoraisesuch groundofappeal.Undeniably,thegroundwasraisedbytheassesseebeforethe learnedCIT-Abutthesamehasnotbeenconsideredwhiledecidingtheappeal filedbytheassessee.Tothisextent,wearesatisfiedwiththeargumentsraised bytheld.ARfortheassessee.However,inourconsideredview,itisthe discretionoftheld.CIT-Atoadmitornottoadmittheadditionalgroundraisedby theassessee.However,suchdiscretionshouldbeexercisedbythelearned CIT(Appeal)aspertheprovisionsoflawandshouldpassaspeakingordereither acceptingorrejectingsuchadditionalgroundofappeal.Iftheld.CIT-Aisinclined toadmittheadditionalgroundofappealraisedbytheassessee,thentheld. CIT(Appeal)willdecidetheissueonmeritaswellaspertheprovisionsoflaw. Withthisobservation,thegroundofappealoftheassesseeisallowedforthe statisticalpurposes. 6.Intheresult,theappealfiledbytheassesseeisallowedforthestatistical purposes. ComingtoITANo.870/AHD/2023forAY2018-19,anappealbythe assesee. 7.Theassesseehasraisedfollowinggroundsofappeal: 1.Thatonfacts,andinlaw,thelearnedNationalfacelessAppealCentre(NFAC)has grievouslyerredinlawandonfactsinconfirmingtheadditionofRs.75,23,496/-(profiton saleofmachineryRs.1,61,255+subcontractincomeRs.44,13,776+subcontract incomeRs.44,13,776+indirectincomeRs.29,48,465)asundisclosedincome,ignoring ITAno.349&870/AHD/2022/2023 A.Y.2017-18&2018-19 4 thefactthatthesaidincomeisalreadyincludedasincomeintheauditedaccountsofthe appellant. 2.That,onfacts,andevidenceonrecord,theappellanthasalreadyexcludedtheprofit onsaleofmachineryofRs.1,61,255/-andsubcontractincomeRs.44,13,776/-fromthe profitseligiblefordeductionu/d80IA(4)oftheActandhadclaimedthisdeductiononly onproportionateindirectincomeofRs.29,48,465/- 3.Theappellantcravesleavetoadd,alter,amendanygroundofappeal. 8.TheinterconnectedissueraisedbytheassesseeisthatthelearnedCIT-A erredindenyingthebenefitofdeductionundersection80IA(4)oftheActwith respecttotheprofitonthesaleofmachinery,sub-contractincomeandindirect incomeof₹1,61,255.00,Rs.44,13,776.00andRs.29,48,465respectively. 9.TheAOduringtheassessmentproceedingsfoundthattheassesseehas shownincomefromothersourcesinthefinancialstatements.Thedetailsofsuch otherincomestandasunder: 1.InterestincomeA/cBankofBarodaFDRRs.46,85,854/- 2.InterestincomeA/cSardarSarovarBondRs.2,55,000/- 3.ProfitonSaleofMachineryRs.1,61,255/- 4.InterestReceivedonI.TRefundRs.2,10,360/- 5.SubContractProfitIncomeRs.43,95,894/- 6.SaleofscrapRs.3,20,850/- 7.GainonCessationofLiabilityRs.3,71,365/- 9.1TheAOfurtherfoundthattheassesseeoutoftheaforesaidincomehas claimeddeductionundersection80IA(4)oftheActwithrespecttotheincome profitonsaleofmachinery₹1,61,255.00,sub-contractincome₹44,13,776.00 andindirectincomeof₹29,48,465.00butaspertheAOsuchincomewasnot eligiblefordeductionundersection80IA(4)oftheAct.Thus,theAOdisallowed thesame. 9.2TheAOalsofoundthattheassesseehasnotofferedprofitonsaleof machineryamountingto₹1,61,255.00totaxandthereforetheAOalsomadethe additiontothetotalincomeoftheassesseeofsuchlossonthesaleofmachinery. ITAno.349&870/AHD/2022/2023 A.Y.2017-18&2018-19 5 Ineffect,theAOmadeanadditionof₹75,23,496.00tothetotalincomeofthe assessee. 10.Aggrievedassesseepreferredanappealtotheld.CIT-Awhoconfirmedthe orderoftheAObyobservingasunder: 4.5Ihavegonethroughtheassessmentordercarefullyandconsideredthe submissionsoftheappellant.Fromtheworkingofeligibledeductionu/s801Ait appearsthattheappellanthasworkedouttheamountofdeductionatRs. 9,22,41,113/-whichincludesRs.1,61,255/-beingtosaleofmachinery,Rs. 44,13,776/-beingtosub-contractincomeandRs.29,48,465/-beingtoindirectincome. TheId.AOhasdenieddeductionu/s80IA(4)(i)onabove3items. 5.IntheassessmentordertheId.AOhasheldthattheincomeofRs.44,13,776/-on accountofsubcontractisnotapartoftheincomederivedfromdevelopmentof infrastructure.Thus,theclaimofdeductionagainstthisamounthasbeendeniedby theId.AO.Theappellanthassubmittedthattheamountofsubcontractprofitof Rs.43,95,894/-hasalreadybeenincludedinotherincomeofRs.1,04,00,578/-which isapartoftotalrevenueofRs.108,47,40,420/-,TheamountofprofitRs. 6,57,56,993/-whichhasbeentakenforthecomputationoftotalincome,includesthe amountofotherincomeofRs.1,04,00,578/-.Itmeansthatthedeductionu/s 80IA(4)(i)hasbeenclaimedagainstthisentireindirectincome. 5.1Fromthesubmissionoftheappellantitisevidentthattheappellanthasclaimed deductionagainsttheprofitearnedbyitonaccountofsub-contractbusiness.The incomeearnedfromthebusinessofsubcontractdoesnotformpartoftheincome derivedfromthebusinessofdevelopmentofinfrastructure.Therefore,theId.AOhas rightlydenieddeductionu/s80IA(4)(i)onthisamountandmadeadditionofRs. 44,13,776/-.Onthebasisoftheassessmentorderandinviewofthedetailsand documentsuploadedbytheappellant,Iamofconsideredopinionthattheaddition madebytheId.AOdeservestobesustained.Accordingly,thegroundofappealon thisisdismissedandnotallowed. 6.TheId.AOmadeadditionofRs.1,61,255/-onaccountofprofitonsaleof machinery.Fromthesubmissionoftheappellant,itisevidentthattheappellanthas claimeddeductionagainsttheprofitearnedbyitonaccountofsaleofmachinery.The profitearnedonaccountofsaleofmachinerydoesnotformpartoftheincome derivedfromthebusinessofdevelopmentofinfrastructure.Therefore,theId.AOhas rightlydenieddeductionu/s80IA(4)(i)onthisamountandmadeadditionofRs. 1,61,255/-.Onthebasisoftheassessmentorderandinviewofthedetailsand documentsuploadedbytheappellant,Iamofconsideredopinionthattheaddition madebytheId.AOdeservestobesustained.Accordingly,thegroundofappealon thisisdismissedandnotallowed. 7.RegardingadditionofRs.29,48,465/-,itisnoticedthatthisamounthasbeen derivedbytheappellantfromtheindirectincomeofRs.1,04,00,578/-inproportionto thetotalturnoverandtheturnoverofeligiblebusiness.Theappellanthasalsoclaimed deductiononthisindirectincomebutithasnotofferedanyexplanationastohowthis ITAno.349&870/AHD/2022/2023 A.Y.2017-18&2018-19 6 amount,formingpartofindirectincome(notpertainingtotheeligiblebusinessu/s 801A(4)(i)),iseligiblefordeduction.Therefore,theId.AOhasrightlydenied deductionu/s80IA(4)(i)onthisamountandmadeadditionofRs.29,48,465/-.Onthe basisoftheassessmentorderandinviewofthedetailsanddocumentsuploadedby theappellant,IamofconsideredopinionthattheadditionmadebytheId.AO deservestobeupheld.Accordingly,thegroundofappealonthisisdismissedandnot allowed. 11.Beingaggrievedbytheorderofld.CIT-A,theassesseeisinappealbefore us. 12.ThelearnedARbeforeusfiledapaperbookrunningfrompages1to54 andcontendedthattherewasnodeductionclaimedundersection80IA(4)ofthe Actwithrespecttotheprofitonsaleofmachineryof₹1,61,255.00andsub- contractincomeofRs.44,13,776.00.Aspertheld.AR,theprofitfromthesaleof machineryhasalreadybeenadjustedinthescheduleofthefixedassetsandthe depreciationwasclaimedaftersuchadjustment.Assuchthereisnoprovision undertheActtotaxtheprofitonsaleofmachineryof₹1,61,255.00ifthe relevantblockofassetsexistsinthebooksofaccounts.Theld.ARinsupportof itscontentionhasdrawnourattentiontothescheduleoffixedassetsplacedon pages8and9ofthepaperbooks.Regardingthesubcontractincome,theld.AR contendedthattheassesseehasnotclaimedanydeductionofRs.44,13,776.00 whilecalculatingtheamounteligiblefordeductionundersection80IA(4)ofthe Act. 12.1Theld.ARregardingthebalanceamountofRs.29,48,465.00submitted thatthisistheonlyamountwhichwasclaimedasdeductionwhilecalculatingthe eligibleprofitundersection80IA(4)oftheAct. 13.Ontheotherhand,theld.DRbeforeusvehementlysupportedtheorderof theauthoritiesbelow. 14.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Asregardstheprofitonthesaleofmachinery,we ITAno.349&870/AHD/2022/2023 A.Y.2017-18&2018-19 7 notethatthegrossamountofsaleconsiderationofsuchplantandmachinery amountingto₹15,23,810.00hasalreadybeenadjustedintheblockofassets whichcanbeverifiedfromthedepreciationscheduleplacedonpage9ofthe paperbookwhichwaspreparedundertheprovisionsoftheIncomeTaxAct.Thus, suchamountcannotbetaxedseparatelybytherevenue.Oncetheimpugned amountofprofitonthesaleofmachineryof₹1,61,655hasalreadybeenadjusted intheblockofassessee,thereisnoprovisiontoshowthesameasincome chargeabletotax. 14.1RegardingthesubcontractincomeofRs.44,13,776.00,wenotethatsuch incomehasnotbeenmadesubjecttodeductionundersection80-IA(4)oftheAct andthereforewearenotinagreementwiththefindingsoftheauthoritiesbelow. 14.2RegardingthebalanceamountofRs.29,48,465.00whichwassubject matterofdeductionundersection80-IA(4)oftheAct,wenotethatthereisa preconditionforclaimingthedeductionoftheprofit/incomeifitisderivedfrom theeligibleactivity.However,theld.ARbeforeushasnotsubmittedsufficient documentaryevidenceinsupportofhiscontention.OnquestionbytheBenchat thetimeofhearing,thelearnedcounselrequestedtorestoretheissuetothefile oftheld.CIT-Aforfreshadjudicationaspertheprovisionsoflawandfurther assuredtofurnishthenecessarydetailstojustifytheclaimoftheassessee.Per contra,thelearnedDRdidnotraiseanyseriousobjectionifthematterisreferred tothefileofld.CIT-Aforfreshadjudicationaspertheprovisionsoflaw. Accordingly,intheinterestofjusticeandfairplayweareinclinedtoextendone moreopportunitytotheassesseetojustifyitsclaimfordeductionofRs.29,48,465 aspertheprovisionsoflaw.Hence,thegroundofappealoftheassesseeispartly allowedforstatisticalpurposes. 15.Intheresult,theappealfiledbytheassesseeispartlyallowedforstatistical purposes. ITAno.349&870/AHD/2022/2023 A.Y.2017-18&2018-19 8 16.Inthecombinedresult,theappealbearingNo.349/AHD/2022forAY 2017-18isallowedforstatisticalpurposesandtheappealbearingNo. 870/AHD/2022forAY2018-19ispartlyallowedforstatisticalpurposes. OrderpronouncedintheCourton05/04/2024atAhmedabad. Sd/-Sd/- (MADHUMITAROY)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated05/04/2024 Manish