M/s VIL Limited, Lucknow V. Astt. Commissioner of Income Tax (C.C-I), Lucknow

ITA 350/LKW/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1136 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 29-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K BAR
• Assessee Lawyers: YOGESH AGRAWAL
• Keywords: Depreciation; Principle of natural justice; Additional evidence
• Section: 133(6)

Judgement Text

I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO.350/LKW/2017 ASSESSMENT YEAR:2012-13 M/S VIL LIMITED, (FORMERLY VIJAY INFRASTRUCTURE LTD., B-5/21, VISHAL KHAND, GOMTI NAGAR, LUCKNOW. PAN:AABCV 2697 Q VS. A.C.I.T., CENTRAL CIRCLE-1, LUCKNOW. (APPELLANT) (RESPONDENT) ITA NO.410/LKW/2017 ASSESSMENT YEAR:2012-13 DY.C.I.T., RANGE-6, LUCKNOW. VS. M/S VIJAY INFRASTRUCTURE LTD., B-5/21, VISHAL KHAND, GOMTI NAGAR, LUCKNOW. PAN:AABCV 2697 Q (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THESE ARE CROSS APPEALS FILED BY THE REVENUE AS WE LL AS BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A) DATED 31/03/2017. THE ONLY GROUND TAKEN BY THE REVENUE IN ITS APPEAL IS THE AC TION OF LEARNED CIT(A) BY ASSESSEE BY SHRI YOGESH AGRAWAL, ADVOCATE REVENUE BY S HRI A. K. BAR, CIT (D.R.) DATE OF HEARING 26/11/2018 DATE OF PRONOUNCEMENT 30/11/2018 I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 2 WHICH HE HAS ALLOWED CLAIM OF THE ASSESSEE U/S 80IA OF THE ACT. THE ASSESSEE IN ITS APPEAL HAS TAKEN THE FOLLOWING GROU NDS: I. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-II I, LUCKNOW [HERE-IN-AFTER REFERRED TO AS THE LD. CIT ( A)'S] ERRED ON FACTS AND IN LAW IN NOT PASSING ANY SPEAKING ORD ER ON THE ISSUE REGARDING MAKING AN ASSESSMENT ORDER U/S 143( 3)/144 BY REJECTING THE BOOKS OF ACCOUNTS WHEREAS IN FACT THE ENTIRE BOOKS OF ACCOUNTS ALONG WITH RELEVANT BILLS, VOUCHERS, ET C. ARE DULY MAINTAINED AND ARE ALSO DULY AUDITED AND THUS THE O RDER BEING VITIATED NEEDS TO BE QUASHED AND THE RETURNED INCOM E ACCEPTED. NOTWITHSTANDING AND WITHOUT PREJUDICE TO GROUND NO. I ABOVE :- II. THE LD. CIT (A)'S GROSSLY ERRED ON FACTS AND IN LAW IN CONFORMING THE DISALLOWANCE OF DEPRECIATION AMOUNTI NG TO RS.1,42,80,490/- BEING SHUTTERING MATERIAL PURCHASE D FROM M/S. SHYAM STEEL INDUSTRIES DESPITE THE FACT THAT THE EN TIRE BILLS AND VOUCHERS ARE AVAILABLE AND WERE ALSO PRODUCED BEFOR E HER AND PAYMENTS MADE THROUGH ACCOUNT PAYEE CHEQUES AND THU S THE ADDITION BASED WHOLLY ON NOTIONS, CONJECTURES AND S URMISES AND WITHOUT ANY CONCRETE FACTS MAY KINDLY BE ORDERED TO BE DELETED. III. THE LD. CIT (A)'S FURTHER GROSSLY ERRED ON FAC TS AND IN LAW IN CONFORMING THE ADDITION OF RS.1,18,28,291/- BEIN G ADVANCE MADE TO M/S. NCC VEE-JV DESPITE THE FACT THAT THE S AME IS AS PER THE TERMS CONTAINED IN THE MEMORANDUM OF AGREEM ENT AND DULY RECORDED IN THE BOOKS OF ACCOUNTS AND THUS THE DISALLOWANCE AND ITS CONFIRMATION BEING AGAINST ALL SETTLED PRINCIPLES OF LAW AND NATURAL JUSTICE MAY KINDLY BE ORDERED TO BE DELETED. IV. THE LD. CIT (A)'S AGAIN ERRED ON FACTS AND IN L AW IN CONFORMING THE DISALLOWANCE OF EXPENSE OF RS.3,69,7 0,315/- TOWARDS WORK CONTRACT AND OTHER TAX DESPITE THE FAC T THAT THE CERTIFICATE REGARDING THE TDS DEDUCTED UNDER UP VAT RULES, 2006 BY PRODUCED BEING AMOUNT DEPOSITED AS VAT ON B EHALF OF NCC-VEE (JV) AND THUS THE DISALLOWANCE SO MADE WHOL LY ON IRRELEVANT CONSIDERATIONS, WITHOUT ANY COGENT MATER IAL ON RECORD AND WHIMS AND FANCIES MAY KINDLY BE ORDERED TO BE D ELETED. I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 3 V. THE LEARNED. CIT (A)'S ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION MADE UNDER THE HEAD SUNDRY CREDITORS FOR AN AMOUNT OF RS.9,90,07,964/- WHICH SUCH ADDITI ON WAS MADE WITHOUT ANY BASIS ONLY ON WHIMS AND FANCIES AN D THUS THE SAID ADDITION MAY KINDLY BE ORDERED TO BE DELETED. VI. ON THE FACTS AND IN THE PECULIAR CIRCUMSTANCES OF THE PRESENT CASE THE LD. CIT (A)'S GROSSLY ERRED ON FAC TS IN CONFIRMING THE ADDITION OF RS.9,90,07,964/- BY IGNO RING THE FACT THAT THESE ARE TRADE CREDITORS AND HAVE BEEN PAID T HROUGH BANKING CHANNELS AND ALSO THAT CONFIRMATIONS WERE A LSO FILED ALL THE BALANCES ARE DULY RECONCILED AND THAT ALL SUCH EVIDENCES AS WAS AVAILABLE WERE PLACED BEFORE THE ASSESSING OFFI CER DURING ASSESSMENT STAGE ITSELF AND THUS THIS ADDITION BEIN G MADE WITHOUT ANY BASIS ONLY ON NOTIONS, CONJECTURES AND SURMISES MAY KINDLY BE ORDERED TO BE DELETED. VII. THE ADDITION SO SUSTAINED IS VERY HIGHLY EXCES SIVE, CONTRARY TO FACTS, LAWS AND PRINCIPLES OF NATURAL J USTICE AND FAIR- PLAY AND THUS MAY KINDLY BE ORDERED TO BE QUASHED/A NNULLED. VIII. THAT, THE LD. CIT (A)'S DID NOT AFFORD THE AP PELLANT ANY PROPER OR SUFFICIENT OPPORTUNITY TO HAVE ITS SAY OR MAKE NECESSARY COMPLIANCE OF THE REASONS RELIED UPON BY HER IN CONFORMING THE ADDITIONS AND THUS THE ORDER SO PASS ED WITHOUT AFFORDING ADEQUATE OPPORTUNITY MAY KINDLY BE ORDERE D TO BE QUASHED. 2. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT THE APPEAL FILED BY THE REVENUE IS DULY COVERED IN FAVOUR OF THE ASSESSEE B Y THE EARLIER ORDER OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF WHICH HAS B EEN CONFIRMED BY HON'BLE ALLAHABAD HIGH COURT AND FURTHER THE APPEAL FILED B Y THE REVENUE IN THE SUPREME COURT HAS BEEN DISMISSED AND IN THIS RESPEC T OUR ATTENTION WAS INVITED TO PAPER BOOK PAGES 1 TO 60 WHERE THE RELEV ANT COPIES OF ORDERS OF VARIOUS COURTS WAS PLACED. 3. LEARNED D. R. FAIRLY AGREED THAT THE ISSUE IS WE LL SETTLED AGAINST THE REVENUE. I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 4 4. AS REGARDS THE APPEAL OF THE ASSESSEE, LEARNED A . R. INVITED OUR ATTENTION TO PETITION FOR ADMISSION OF ADDITIONAL G ROUND WHICH WAS FILED VIDE LETTER DATED 20 TH AUGUST, 2018. LEARNED A. R. SUBMITTED THAT THE GR OUND TAKEN BY THE ASSESSEE IS A LEGAL GROUND WHICH GOES TO THE ROOT OF THE MATTER AND WHICH COULD NOT BE TAKEN AT THE TIME OF FILING OF THE APPEAL AND THEREFORE, IT WAS PRAYED THAT THE SAME MAY BE ADMIT TED. EXPLAINING THE ADDITIONAL GROUNDS OF APPEAL, LEARNED A. R. SUBMITT ED THAT WHILE DISALLOWING THE CLAIM OF THE ASSESSEE U/S 80IA, THE ASSESSING O FFICER AND LEARNED CIT(A) HAVE MADE CERTAIN OTHER DISALLOWANCES AND GROUND OF APPEAL RELATES TO THE CLAIM OF THE ASSESSEE THAT SUCH ENHANCED INCOME IS ALSO SUBJECT TO DEDUCTION U/S VIA OF THE I.T. ACT. LEARNED D. R. DI D NOT OBJECT TO THE ADMISSION OF ADDITIONAL GROUNDS OF APPEAL AND THERE FORE, THE SAME WAS ADMITTED. LEARNED A. R. SUBMITTED THAT THE ASSESSE E WAS DENIED CERTAIN DEPRECIATION ON ADDITIONAL ITEMS OF SHUTTERING MATE RIAL WHICH HAS INCREASED THE INCOME OF ASSESSEE. IT WAS SUBMITTED THAT SINC E THE INCOME OF THE ASSESSEE WAS ENTITLED TO BENEFIT U/S 80IA THEREFORE , THE INCREASED INCOME WOULD ALSO BE ELIGIBLE FOR DEDUCTION U/S 80IA OF TH E ACT. LEARNED A. R. FURTHER SUBMITTED THAT THERE WERE OTHER DISALLOWANC ES ALSO WHICH WERE NOT ALLOWED BY THE AUTHORITIES BELOW DESPITE OF THE FAC T THAT ALL THE NECESSARY DOCUMENTS WERE SUBMITTED TO THE ASSESSING OFFICER A ND IN THIS RESPECT OUR ATTENTION WAS INVITED TO PAGES 95 TO 111 OF THE PAP ER BOOK WHERE COPIES OF SUCH DOCUMENTS WAS PLACED. LEARNED A. R. FURTHER I NVITED OUR ATTENTION TO THE ADDITION SUSTAINED BY LEARNED CIT(A) ON ACCOUNT OF NON CONFIRMATION OF SUNDRY CREDITORS. LEARNED A. R. SUBMITTED THAT THE ASSESSEE HAD DULY DISCHARGED ITS ONUS OF FILING THE NECESSARY COPIES OF ACCOUNTS, THE PAYMENTS OF WHICH WERE MADE THROUGH BANKING CHANNELS AND, TH EREFORE, THE ADDITION WAS NOT SUSTAINABLE AND WITHOUT PREJUDICE IT WAS AR GUED THAT EVEN IF ADDITIONS WERE SUSTAINABLE, THE SAME WOULD BE EXEMP T U/S 80IA OF THE ACT. LEARNED A. R. FURTHER INVITED OUR ATTENTION TO THE ADMISSION OF ADDITIONAL I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 5 EVIDENCE UNDER RULE 29 OF THE APPELLATE TRIBUNAL RU LES AND SUBMITTED THAT THE DOCUMENTS FILED AS ADDITIONAL EVIDENCE IS COPY OF MEMORANDUM OF AGREEMENT DATED 05/12/2005 BETWEEN THE ASSESSEE COM PANY AND M/S NAGARJUNA CONSTRUCTION COMPANY LTD. WHEREBY THE ASS ESSEE WAS REQUIRED TO MAKE PAYMENTS EQUIVALENT TO 4% OF THE GROSS RECE IPTS TO M/S NAGARJUNA CONSTRUCTION COMPANY LTD. LEARNED A. R. SUBMITTED THAT THE ASSESSEE HAD ENTERED INTO A JOINT VENTURE AGREEMENT WITH M/S NAG ARJUNA CONSTRUCTION COMPANY LTD. AND ASSESSEE WAS REQUIRED TO PAY 4% OF THE GROSS RECEIPTS TO M/S NAGARJUNA CONSTRUCTION COMPANY LTD. AND ALL OTH ER INCOME AND EXPENSES WERE REQUIRED TO BE BORNE BY THE ASSESSEE COMPANY. 5. LEARNED D. R., ON THE OTHER HAND, HEAVILY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. FIRST WE TAKE UP THE APPEAL FILE D BY THE REVENUE. THE ONLY GROUND TAKEN BY THE REVENUE IS THE ACTION OF L EARNED CIT(A) BY WHICH HE HAS ALLOWED RELIEF TO THE ASSESSEE BY ALLOWING E XEMPTION U/S 80IA OF THE ACT. WE FIND THAT IN THE CASE OF THE ASSESSEE ITSE LF THE ISSUE HAS BEEN DECIDED BY THE TRIBUNAL VIDE ORDER DATED 30/10/2015 . THE RELEVANT FINDINGS OF HON'BLE TRIBUNAL, AS CONTAINED FROM PARA 14.1 TO 14.2, ARE REPRODUCED BELOW: 14.1 FROM THE ABOVE PARAS, REPRODUCED FROM THE ORDE R OF CIT(A), WE FIND THAT A CATEGORICAL FINDING HAS BEEN GIVEN BY CIT (A) THAT THE ASSESSEE COMPANY IS NOT A MERE WORK CO NTRACTOR BUT HAS DEVELOPED THE ROAD FROM EXISTING 2 LANE TO 4 LANE AND WHILE DOING SO, THE ASSESSEE COMPANY HAS ALSO MADE SUBSTANTIAL INVESTMENT BY ITSELF AND ALSO EXECUTED THE DEVELOPMENT WORKS AND CARRIED OUT CIVIL-WORKS ON IT S OWN BY USING ITS OWN MATERIAL AND EXPERTISE AND NO MATERIA L CONSUMED IN THE ROADS AND BRIDGES WERE PROVIDED BY THE NHAI AND UP PWD. THIS IS ALSO NOTED BY CIT(A) THAT THE MAINTEN ANCE OF THE I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 6 EXISTING FACILITY DURING THE PERIOD OF DEVELOPMENT ALSO WAS OF THE ASSESSEE COMPANY AND SO ALSO WAS THE RISK DURIN G THIS PERIOD TO MAINTAIN THE INFRASTRUCTURE AND AFTER THE COMPLETION OF DEVELOPMENT OF ROAD AND ITS HANDING OVER TO THE GOVERNMENT, THE RISK PERIOD OF THE ASSESSEE COMPANY WAS OF 12 MONTHS FOR MAINTENANCE OF THE ROAD. AS PER EXPLANA TION BELOW SUB SECTION (4) OF SECTION 80IA, INFRASTRUCTURE FAC ILITY INCLUDES A ROAD INCLUDING TOLL ROAD, BRIDGE OR A RAIL SYSTEM. THIS IS NOT IN DISPUTE THAT THE ASSESSEE HAS WIDENED THE ROAD AND THEREFORE, ACTIVITY OF THE ASSESSEE FALLS WITHIN THE DEFINITIO N OF INFRASTRUCTURE. THE CIT(A) HAS ALSO REFERRED TO SE VERAL JUDICIAL PRONOUNCEMENTS AS PER WHICH IT WAS HELD THAT THERE IS NO REQUIREMENT THAT THE ASSESSEE SHOULD HAVE BEEN THE OWNER OF THE INFRASTRUCTURE FACILITY. THE FACTS IN THE CASE OF KOYA & CO. (SUPRA) ARE IDENTICAL. IN THAT CASE, THE RELEVANT P ARAS OF THE TRIBUNAL ORDER ARE PARA NO. 21 TO 28 AND THE SAME A RE REPRODUCED BELOW FOR READY REFERENCE:- 21. WE HAVE CONSIDERED THE ELABORATE SUBMISSIONS MA DE BY BOTH THE PARTIES AND ALSO PERUSED THE MATERIALS AVAILABL E ON RECORD. WE HAVE ALSO GONE THROUGH ALL THE CASE LAWS CITED B Y BOTH THE PARTIES. WE FIND THAT THE PROVISIONS OF SECTION 80I A (4) OF THE ACT WHEN INTRODUCED AFRESH BY THE FINANCE ACT, 1999, TH E PROVISIONS UNDER SECTION 80IA (4A) OF THE ACT WERE DELETED FRO M THE ACT. THE DEDUCTION AVAILABLE FOR ANY ENTERPRISE EARLIER UNDER SECTION 80IA (4A) ARE ALSO MADE AVAILABLE UNDER SECTION 80I A (4) ITSELF. FURTHER, THE VERY FACT THAT THE LEGISLATURE MENTION ED THE WORDS (I) 'DEVELOPING' OR (II) 'OPERATING AND MAINTAINING ' OR (III) 'DEVELOPING, OPERATING AND MAINTAINING' CLEARLY IND ICATES THAT ANY ENTERPRISE WHICH CARRIED ON ANY OF THESE THREE ACTIVITIES WOULD BECOME ELIGIBLE FOR DEDUCTION. THEREFORE, THE RE IS NO AMBIGUITY IN THE INCOME-TAX ACT. WE FIND THAT WHERE AN ASSESSEE INCURRED EXPENDITURE FOR PURCHASE OF MATER IALS HIMSELF AND EXECUTES THE DEVELOPMENT WORK I.E., CARRIES OUT THE CIVIL CONSTRUCTION WORK, HE WILL BE ELIGIBLE FOR TAX BENE FIT UNDER SECTION 80 IA OF THE ACT. IN CONTRAST TO THIS, A AS SESSEE, WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON INCLUDIN G GOVERNMENT OR AN UNDERTAKING OR ENTERPRISE REFERRED TO IN SECT ION 80 IA OF THE ACT, FOR EXECUTING WORKS CONTRACT, WILL NOT BE ELIGIBLE FOR THE TAX BENEFIT UNDER SECTION 80 IA OF THE ACT. WE FIND THAT THE WORD 'OWNED' IN SUB-CLAUSE (A) OF CLAUSE (1) OF SUB SECT ION (4) OF SECTION 80IA OF THE ACT REFER TO THE ENTERPRISE. BY READING OF THE SECTION, IT IS CLEARS THAT THE ENTERPRISES CARRYING ON DEVELOPMENT OF INFRASTRUCTURE DEVELOPMENT SHOULD BE OWNED BY TH E COMPANY AND NOT THAT THE INFRASTRUCTURE FACILITY SHOULD BE OWNED BY A COMPANY. THE PROVISIONS ARE MADE APPLICABLE TO THE PERSON TO WHOM SUCH ENTERPRISE BELONGS TO IS EXPLAINED IN SUB -CLAUSE (A). THEREFORE, THE WORD 'OWNERSHIP' IS ATTRIBUTABLE ONL Y TO THE ENTERPRISE CARRYING ON THE BUSINESS WHICH WOULD MEA N THAT ONLY I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 7 COMPANIES ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (4) AND NOT ANY OTHER PERSON LIKE INDIVIDUAL, HUF, FIRM ETC . 22. WE ALSO FIND THAT ACCORDING TO SUB-CLAUSE (A), CLAUSE (I) OF SUB SECTION (4) OF SECTION 80-IA THE WORD 'IT' DENO TES THE ENTERPRISE CARRYING ON THE BUSINESS. THE WORD 'IT' CANNOT BE RELATED TO THE INFRASTRUCTURE FACILITY, PARTICULARL Y IN VIEW OF THE FACT THAT INFRASTRUCTURE FACILITY INCLUDES RAIL SYS TEM, HIGHWAY PROJECT, WATER TREATMENT SYSTEM, IRRIGATION PROJECT , A PORT, AN AIRPORT OR AN INLAND PORT WHICH CANNOT BE OWNED BY ANY ONE. EVEN OTHERWISE, THE WORD 'IT' IS USED TO DENOTE AN ENTERPRISE. THEREFORE, THERE IS NO REQUIREMENT THAT THE ASSESSE E SHOULD HAVE BEEN THE OWNER OF THE INFRASTRUCTURE FACILITY. 23. THE NEXT QUESTION IS TO BE ANSWERED IS WHETHER THE ASSESSEE IS A DEVELOPER OR MERE WORKS CONTRACTOR. THE REVENU E RELIED ON THE AMENDMENTS BROUGHT IN BY THE FINANCE ACT 2007 A ND 2009 TO MENTION THAT THE ACTIVITY UNDERTAKEN BY THE ASSESSE E IS AKIN TO WORKS CONTRACT AND HE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (4) OF THE ACT. WHETHER THE ASSESSEE IS A DEVE LOPER OR WORKS CONTRACTOR IS PURELY DEPENDS ON THE NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE. EACH OF THE WORK UNDERT AKEN HAS TO BE ANALYZED AND A CONCLUSION HAS TO BE DRAWN ABOUT THE NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE. THE AGREEME NT ENTERED INTO WITH THE GOVERNMENT OR THE GOVERNMENT BODY MAY BE A MERE WORKS CONTRACT OR FOR DEVELOPMENT OF INFRASTRU CTURE. IT IS TO BE SEEN FROM THE AGREEMENTS ENTERED INTO BY THE ASS ESSEE WITH THE GOVERNMENT. WE FIND THAT THE GOVERNMENT HANDED OVER THE POSSESSION OF THE PREMISES OF PROJECTS TO THE ASSES SEE FOR THE DEVELOPMENT OF INFRASTRUCTURE FACILITY. IT IS THE A SSESSEE'S RESPONSIBILITY TO DO ALL ACTS TILL THE POSSESSION O F PROPERTY IS HANDED OVER TO THE GOVERNMENT. THE FIRST PHASE IS T O TAKE OVER THE EXISTING PREMISES OF THE PROJECTS AND THEREAFTE R DEVELOPING THE SAME INTO INFRASTRUCTURE FACILITY. SECONDLY, TH E ASSESSEE SHALL FACILITATE THE PEOPLE TO USE THE AVAILABLE EXISTING FACILITY EVEN WHILE THE PROCESS OF DEVELOPMENT IS IN PROGRESS. AN Y LOSS TO THE PUBLIC CAUSED IN THE PROCESS WOULD BE THE RESPONSIB ILITY OF THE ASSESSEE. THE ASSESSEE HAS TO DEVELOP THE INFRASTRU CTURE FACILITY. IN THE PROCESS, ALL THE WORKS ARE TO BE EXECUTED BY THE ASSESSEE. IT MAY BE LAYING OF A DRAINAGE SYSTEM; MAY BE CONST RUCTION OF A PROJECT; PROVISION OF WAY FOR THE CATTLE AND BULLOC K CARTS IN THE VILLAGE; PROVISION FOR TRAFFIC WITHOUT ANY HINDRANC E, THE ASSESSEE'S DUTY IS TO DEVELOP INFRASTRUCTURE WHETHE R IT INVOLVES CONSTRUCTION OF A PARTICULAR ITEM AS AGREED TO IN T HE AGREEMENT OR NOT. THE AGREEMENT IS NOT FOR A SPECIFIC WORK, I T IS FOR DEVELOPMENT OF FACILITY AS A WHOLE. THE ASSESSEE IS NOT ENTRUSTED WITH ANY SPECIFIC WORK TO BE DONE BY THE ASSESSEE. THE MATERIAL REQUIRED IS TO BE BROUGHT IN BY THE ASSESSEE BY STI CKING TO THE QUALITY AND QUANTITY IRRESPECTIVE OF THE COST OF SU CH MATERIAL. THE GOVERNMENT DOES NOT PROVIDE ANY MATERIAL TO THE ASS ESSEE. IT PROVIDES THE WORKS IN PACKAGES AND NOT AS A WORKS C ONTRACT. THE ASSESSEE UTILIZES ITS FUNDS, ITS EXPERTISE, ITS EMP LOYEES AND TAKES THE RESPONSIBILITY OF DEVELOPING THE INFRASTRUCTURE FACILITY. THE LOSSES SUFFERED EITHER BY THE GOVT. OR THE PEOPLE I N THE PROCESS OF SUCH DEVELOPMENT WOULD BE THAT OF THE ASSESSEE. THE ASSESSEE I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 8 HANDS OVER THE DEVELOPED INFRASTRUCTURE FACILITY TO THE GOVERNMENT ON COMPLETION OF THE DEVELOPMENT. THEREA FTER, THE ASSESSEE HAS TO UNDERTAKE MAINTENANCE OF THE SAID INFRASTRUCTURE FOR A PERIOD OF 12 TO 24 MONTHS. DUR ING THIS PERIOD, IF ANY DAMAGES ARE OCCURRED IT SHALL BE THE RESPONSIBILITY OF THE ASSESSEE. FURTHER, DURING THIS PERIOD, THE E NTIRE INFRASTRUCTURE SHALL HAVE TO BE MAINTAINED BY THE A SSESSEE ALONE WITHOUT HINDRANCE TO THE REGULAR TRAFFIC. THEREFORE , IT IS CLEAR THAT FROM AN UN-DEVELOPED AREA, INFRASTRUCTURE IS DEVELO PED AND HANDED OVER TO THE GOVERNMENT AND AS EXPLAINED BY T HE CBDT VIDE ITS CIRCULAR DATED 18-05-2010, SUCH ACTIVITY I S ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (4) OF THE ACT. THIS C ANNOT BE CONSIDERED AS A MERE WORKS CONTRACT BUT HAS TO BE C ONSIDERED AS A DEVELOPMENT OF INFRASTRUCTURE FACILITY. THEREFORE , THE ASSESSEE IS A DEVELOPER AND NOT A WORKS CONTRACTOR AS PRESUM ED BY THE REVENUE. THE CIRCULAR ISSUED BY THE BOARD, RELIED O N BY LEARNED COUNSEL FOR THE ASSESSEE, CLEARLY INDICATE THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (4) OF TH E ACT. THE DEPARTMENT IS NOT CORRECT IN HOLDING THAT THE ASSES SEE IS A MERE CONTRACTOR OF THE WORK AND NOT A DEVELOPER. 24. WE ALSO FIND THAT AS PER THE PROVISIONS OF THE SECTION 80IA OF THE ACT, A PERSON BEING A COMPANY HAS TO ENTER INTO AN AGREEMENT WITH THE GOVERNMENT OR GOVERNMENT UNDERTA KINGS. SUCH AN AGREEMENT IS A CONTRACT AND FOR THE PURPOSE OF THE AGREEMENT A PERSON MAY BE CALLED AS A CONTRACTOR AS HE ENTERED INTO A CONTRACT. BUT THE WORD 'CONTRACTOR' IS USED TO DENOTE A PERSON ENTERING INTO AN AGREEMENT FOR UNDERTAKING T HE DEVELOPMENT OF INFRASTRUCTURE FACILITY. EVERY AGREE MENT ENTERED INTO IS A CONTRACT. THE WORD 'CONTRACTOR' IS USED T O DENOTE THE PERSON WHO ENTERS INTO SUCH CONTRACT. EVEN A PERSON WHO ENTERS INTO A CONTRACT FOR DEVELOPMENT OF INFRASTRUCTURE F ACILITY IS A CONTRACTOR. THEREFORE, THE CONTRACTOR AND THE DEVEL OPER CANNOT BE VIEWED DIFFERENTLY. EVERY CONTRACTOR MAY NOT BE A DEVELOPER BUT EVERY DEVELOPER DEVELOPING INFRASTRUCTURE FACIL ITY ON BEHALF OF THE GOVERNMENT IS A CONTRACTOR. 25. WE FIND THAT THE DECISION RELIED ON BY THE LEAR NED COUNSEL FOR THE ASSESSEE IN THE CASE OF CIT VS. LAXMI CIVIL ENG INEERING WORKS [SUPRA] SQUARELY APPLICABLE TO THE ISSUE UNDER DISP UTE WHICH IS IN FAVOUR OF THE ASSESSEE WHEREIN IT WAS HELD THAT MER E DEVELOPMENT OF A INFRASTRUCTURE FACILITY IS AN ELIG IBLE ACTIVITY FOR CLAIMING DEDUCTION UNDER SECTION 80IA OF THE ACT AF TER CONSIDERING THE JUDGMENT OF THE MUMBAI HIGH COURT I N THE CASE OF ABG HEAVY ENGINEERING [SUPRA]. THE CASE OF ABG I S NOT THE PURE DEVELOPER WHEREAS, IN THE PRESENT CASE, THE AS SESSEE IS THE PURE DEVELOPER. WE ALSO FIND THAT SECTION 80IA OF T HE ACT, INTENDED TO COVER THE ENTITIES CARRYING OUT DEVELOP ING, OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY KEEPING IN MIND THE PRESENT BUSINESS MODELS AND INTEND TO GRANT THE INC ENTIVES TO SUCH ENTITIES. THE CBDT, ON SEVERAL OCCASIONS, CLAR IFIED THAT PURE DEVELOPER SHOULD ALSO BE ELIGIBLE TO CLAIM DEDUCTIO N UNDER SECTION 80IA OF THE ACT, WHICH ULTIMATELY CULMINATE D INTO AMENDMENT UNDER SECTION 80IA OF THE ACT, IN THE FIN ANCE ACT 2001, TO GIVE EFFECT TO THE AFORESAID CIRCULARS ISS UED BY THE CBDT. I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 9 WE ALSO FIND THAT, TO AVOID MISUSE OF THE AFORESAID AMENDMENT, AN EXPLANATION WAS INSERTED IN SECTION 80IA OF THE ACT, IN THE FINANCE ACT-2007 AND 2009, TO CLARIFY THAT MERE WOR KS CONTRACT WOULD NOT BE ELIGIBLE FOR DEDUCTIONS UNDER SECTION 80IA OF THE ACT. BUT, CERTAINLY, THE EXPLANATION CANNOT BE READ TO DO AWAY WITH THE ELIGIBILITY OF THE DEVELOPER; OTHERWISE, T HE PARLIAMENT WOULD HAVE SIMPLY REVERSED THE AMENDMENT MADE IN TH E FINANCE ACT, 2001. THUS, THE AFORESAID EXPLANATION WAS INSE RTED, CERTAINLY, TO DENY THE TAX HOLIDAY TO THE ENTITIES WHO DOES ONLY MERE WORKS CONTACT OR SUB-CONTRACT AS DISTINCT FROM THE DEVELOPER. THIS IS CLEAR FROM THE EXPRESS INTENSION OF THE PARLIAMENT WHILE INTRODUCING THE EXPLANATION. THE E XPLANATORY MEMORANDUM TO FINANCE ACT 2007 STATES THAT THE PURP OSE OF THE TAX BENEFIT HAS ALL ALONG BEEN TO ENCOURAGE INVESTM ENT IN DEVELOPMENT OF INFRASTRUCTURE SECTOR AND NOT FOR TH E PERSONS WHO MERELY EXECUTE THE CIVIL CONSTRUCTION WORK. IT CATEGORICALLY STATES THAT THE DEDUCTION UNDER SECTION 80IA OF THE ACT IS AVAILABLE TO DEVELOPERS WHO UNDERTAKES ENTREPRENEUR IAL AND INVESTMENT RISK AND NOT FOR THE CONTRACTORS, WHO UN DERTAKES ONLY BUSINESS RISK. WITHOUT ANY DOUBT, THE LEARNED COUNS EL FOR THE ASSESSEE CLEARLY DEMONSTRATED BEFORE US THAT THE AS SESSEE AT PRESENT HAS UNDERTAKEN HUGE RISKS IN TERMS OF DEPLO YMENT OF TECHNICAL PERSONNEL, PLANT AND MACHINERY, TECHNICAL KNOWHOW, EXPERTISE AND FINANCIAL RESOURCES. FURTHER, THE ORD ER OF TRIBUNAL IN THE CASE OF B.T.PATIL CITED SUPRA IS PRIOR TO AM ENDMENT TO SEC 80IA(4), AFTER THE AMENDMENT THE SECTION 80IA(4) RE AD AS (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (II I) DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILI TY, PRIOR TO AMENDMENT THE 'OR' BETWEEN THREE ACTIVITIES WAS NOT THERE, AFTER THE AMENDMENT 'OR' HAS BEEN INSERTED W.E.F. 1 -4-2002 BY FINANCE ACT 2001. THEREFORE, IN OUR CONSIDERED VIEW , THE ASSESSEE SHOULD NOT BE DENIED THE DEDUCTION UNDER S ECTION 80IA OF THE ACT IF THE CONTRACTS INVOLVES DESIGN, DEVELO PMENT, OPERATING & MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PERIOD, THEN SUCH CONTRACT S CANNOT BE CALLED AS SIMPLE WORKS CONTRACT TO DENY THE DEDUCTI ON U/S 80IA OF ACT. IN OUR OPINION THE CONTRACTS WHICH CONTAIN ABOVE FEATURES TO BE SEGREGATED ON THIS DEDUCTION U/S. 80-IA HAS T O BE GRANTED AND THE OTHER AGREEMENTS WHICH ARE PURE WORKS CONTR ACTS HIT BY THE EXPLANATION SECTION 80IA(13), THOSE WORK ARE NO T ENTITLE FOR DEDUCTION U/S 80IA OF THE ACT. THE PROFIT FROM THE CONTRACTS WHICH INVOLVES DESIGN, DEVELOPMENT, OPERATING & MAI NTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LI ABILITY PERIOD IS TO BE COMPUTED BY ASSESSING OFFICER ON PRO-RATA BAS IS OF TURNOVER. THE ASSESSING OFFICER IS DIRECTED TO EXAM INE THE RECORDS ACCORDINGLY AND GRANT DEDUCTION ON ELIGIBLE TURNOVER AS DIRECTED ABOVE. IT IS NEEDLESS TO SAY THAT SIMILAR VIEW HAS BEEN TAKEN BY THE CHENNAI BENCH OF THE TRIBUNAL AND DEDU CTION U/S. 80IA WAS GRANTED IN THE CASE OF M/S. CHETTINAD LIGN ITE TRANSPORT SERVICES (P) LTD., IN ITA NO. 2287/MDS/06 ORDER DAT ED 27 TH JULY, 2007 FOR THE ASSESSMENT YEAR 2004-05. LATER IN ITA NO. 1179/MDS/08 VIDE ORDER DATED 26 TH FEBRUARY, 2010 THE TRIBUNAL HAS TAKEN THE SAME VIEW BY INTER-ALIA HOLDING AS FO LLOWS: I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 10 '7. MOREOVER, THE REASONS FOR INTRODUCING THE EXPLA NATION WERE CLARIFIED AS PROVIDING A TAX BENEFIT BECAUSE MODERN ISATION REQUIRES A MASSIVE EXPANSION AND QUALITATIVE IMPROV EMENT IN INFRASTRUCTURES LIKE EXPRESSWAYS, HIGHWAYS, AIRPORT S, PORTS AND RAPID URBAN RAIL TRANSPORT SYSTEMS. FOR THAT PURPOS E, PRIVATE SECTOR PARTICIPATION BY WAY OF INVESTMENT IN DEVELO PMENT OF THE INFRASTRUCTURE SECTOR AND NOT FOR THE PERSONS WHO M ERELY EXECUTE THE CIVIL CONSTRUCTION WORK OR ANY OTHER WORK CONTR ACT HAS BEEN ENCOURAGED BY GIVING TAX BENEFITS. THUS THE PROVISI ONS OF SECTION 80IA SHALL NOT APPLY TO A PERSON WHO EXECUTES A WOR KS CONTRACT ENTERED INTO WITH THE UNDERTAKING OR ENTERPRISE REF ERRED TO IN THE SECTION BUT WHERE A PERSON MAKES THE INVESTMENT AND HIMSELF EXECUTES THE DEVELOPMENT WORK, HE CARRIES OUT THE C IVIL CONSTRUCTION WORK, HE WILL BE ELIGIBLE FOR THE TAX BENEFIT UNDER SECTION 80IA.' 26. THE ABOVE ORDER WAS FOLLOWED IN SUBSEQUENT ASSE SSMENT YEARS 2007-2008 & 2008-09 IN ITA NOS. 1312 & 1313/M DS/2011 VIDE ORDER DATED 18.11.2011 IN THE CASE OF THE SAME ASSESSEE. 27. FURTHER IN THE CASE OF R.R. CONSTRUCTIONS, THE CHENNAI BENCH OF TRIBUNAL IN I.T.A. NO. 2061/MDS/2010 FOR ASSESSM ENT YEAR 2007-08 VIDE ORDER DATED 3.10.2011 HELD AS FOLLOWS: 28. BEING SO, WE ARE INCLINED TO PARTLY ALLOW THE G ROUND RELATING TO CLAIMING OF DEDUCTION U/S. 80IA. 14.2 FROM THE ABOVE PARA OF THIS TRIBUNAL ORDER, IT COMES OUT THAT IF THE CONTRACTS INVOLVES DESIGN, DEVELOPMENT, OPERATING & MAINTENANCE, FINANCIAL INVOLVEMENT AND DEFECT CORRE CTION AND LIABILITY PERIOD, THEN SUCH CONTRACTS CANNOT BE CAL LED AS SIMPLE WORKS CONTRACT TO DENY THE DEDUCTION UNDER S. 80IA AND PROFIT FROM THE CONTRACTS WHICH INVOLVES DESIGN, DEVELOPME NT, OPERATING & MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PERIOD IS TO BE ACCEPTED A S DEVELOPMENT AND CANNOT BE SAID TO BE CONTRACT SIMPLICITOR TO AP PLY THE EXPLANATION. IN THE PRESENT CASE, CATEGORICAL FINDI NG HAS BEEN GIVEN BY CIT (A) THAT THE ASSESSEE WAS ENGAGED IN DEVELOPMENT OF ROAD AND IS NOT A MERE CONTRACTOR AS HE HAD DEPLOYED HIS OWN CAPITAL, USED HIS OWN MANAGEMENT A ND EXPERTISE IN MAINTENANCE AND HAD TO BEAR THE RISK A ND DEFECT CORRECTION. THESE FINDINGS OF CIT (A) COULD NOT BE CONTROVERTED BY LEARNED DR OF THE REVENUE AND THEREFORE, THIS TR IBUNAL ORDER RENDERED IN THE CASE OF KOYA & CO. (SUPRA) IS SQUAR ELY APPLICABLE BECAUSE THE FACTS ARE SIMILAR. IN THE OR DER OF CIT (A), HE HAS FOLLOWED THIS TRIBUNAL ORDER AND VARIOUS OTH ER JUDICIAL PRONOUNCEMENTS AS NOTED BY HIM IN HIS ORDER, AS REP RODUCED ABOVE. CONSIDERING THIS FACTUAL AND LEGAL POSITION, WE FIND NO I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 11 INFIRMITY THAT THE ORDER OF CIT (A) ON THIS ASPECT THAT IN THE FACTS OF THE PRESENT CASE, IT CANNOT BE SAID THAT T HE ASSESSEE COMPANY WAS MERE A CONTRACTOR AND NOT A DEVELOPER. THEREFORE, ON ISSUE NO. 3, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A). THIS ISSUE IS DECIDED IN FAVOUR OF THE ASS ESSEE. THE ABOVE ORDER OF HON'BLE TRIBUNAL HAS BEEN CONFIR MED BY HON'BLE ALLAHABAD HIGH COURT VIDE ORDER DATED12/07/2018, CO PIES OF WHICH ARE AVAILABLE FROM PAGES 52 TO 56 OF THE PAPER BOOK. F URTHER THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF HON'BLE ALLAHAB AD HIGH COURT HAS BEEN DISMISSED BY HON'BLE SUPREME COURT, A COPY OF WHICH IS PLACED AT PAGE 59 OF THE PAPER BOOK. THEREFORE, RESPECTFULLY FOLLOWI NG THE ABOVE JUDICIAL PRECEDENT IN THE CASE OF THE ASSESSEE ITSELF, THE G ROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. ACCORDINGLY, THE APPEAL OF THE REVENUE STANDS DISMISSED. 7. NOW COMING TO THE APPEAL FILED BY THE ASSESSEE. WE FIND THAT THE FIRST GROUND OF APPEAL HAS NOT BEEN ARGUED BY LEARN ED A. R. THEREFORE, THIS GROUND OF APPEAL REGARDING REJECTION OF BOOKS OF AC COUNT IS DISMISSED AS NOT PRESSED. 8. THE SECOND GROUND OF APPEAL OF THE ASSESSEE IS R EGARDING DISALLOWANCE OF DEPRECIATION ON SHUTTERING MATERIAL PURCHASED FROM SHYAM STEEL INDUSTRIES. THE ASSESSING OFFICER HAS STATED THAT NO BILLS OF PURCHASES FOR SHUTTERING MATERIAL WERE FILED. THE LEARNED CI T(A) HAS HELD THAT THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS VIDE LE TTER DATED 03/08/2016 HAD ASKED THE ASSESSEE TO PRODUCE BILLS AND VOUCHER S IN RESPECT OF ADDITION MADE FOR SHUTTERING MATERIAL WHICH THE ASSESSEE HAD NOT FILED. FROM THE COPY OF REMAND REPORT DATED 23/08/2016, WE FIND TH AT NO SUCH QUERY REGARDING ADDITIONS TO SHUTTERING MATERIAL WAS MADE . THE LEARNED CIT(A) HAS FURTHER HELD THAT THE DETAIL OF PURCHASES OF SH UTTERING MATERIAL HAS BEEN I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 12 EXAMINED AND DURING EXAMINATION HE HAD FOUND AN AMO UNT OF RS.57,91,665/- HAVING BEEN PURCHASED AFTER 30/09/20 11 AND REST OF THE PURCHASES WERE FROM 01/04/2011 TO 30/09/2011 WHEREA S THE ASSESSEE HAD CLAIMED DEPRECIATION @100% ON THE TOTAL PURCHASES. THE LEARNED CIT(A), AFTER HAVING OBSERVED THE PURCHASE OF SHUTTERING MA TERIAL BY THE ASSESSEE, DID NOT ALLOW CLAIM OF THE ASSESSEE AS HE HELD THAT ASSESSEE HAD NOT PRODUCED THE RELEVANT MATERIAL BEFORE THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS ALSO. HOWEVER, WE FEEL THAT ONE MORE OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO PRODUCE THE PURC HASE BILLS WHICH HAS BEEN USED FOR MAKING CLAIM FOR DEPRECIATION. THERE FORE, GROUND NO. 2 OF THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PU RPOSES. 9. NOW COMING TO GROUND NO. 3 REGARDING ADVANCE MAD E TO NCC-VEE (JV). WE FIND THAT AS PER THE ADDITIONAL EVIDENCE THE ASSESSEE WAS BOUND TO PAY AN AMOUNT OF 4% TO NCC-VEE (JV). THE SAID A DDITIONAL EVIDENCE COULD NOT BE FILED BEFORE THE AUTHORITIES BELOW. H OWEVER, WE FIND THAT THE ADDITIONAL EVIDENCE GOES TO THE ROOT OF THE MATTER AND, THEREFORE, WE HAVE ADMITTED THE SAME AND WE REMAND THIS ISSUE ALSO BAC K TO THE FILE OF THE ASSESSING OFFICER WHO SHOULD READJUDICATE THE ABOVE IN VIEW OF THE ADDITIONAL EVIDENCE. 10. NOW COMING TO GROUND NO. 4. WE FIND THAT THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.5,35,08,525/- OUT OF WHICH THE ASSE SSEE WAS ALLOWED RELIEF TO THE TUNE OF RS.1,65,38,210/-. THE REST OF THE C LAIM WAS NOT ALLOWED AS THE ASSESSING OFFICER HELD THAT THE NECESSARY EVIDE NCE FOR THE REMAINING AMOUNT WERE NOT FILED. FROM THE ORDER OF LEARNED C IT(A) WE FIND THAT HE HAS NOTED IN HIS ORDER THAT DURING REMAND PROCEEDIN GS THE ASSESSEE WAS ASKED TO FURNISH PROOF OF PAYMENT OF WORK CONTRACT TAX AND OTHER TAX AND IN THE REMAND REPORT DATED 23/08/2016 THE ASSESSING OF FICER HAD STATED THAT I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 13 NO FURTHER PROOFS WERE PROVIDED. THE LEARNED CIT(A ) HAS FURTHER HELD THAT THE ASSESSEE HAS NOT RECONCILED THE FIGURES OF TAX DEDUCTED IN THE CERTIFICATE OF TDS ETC. HOWEVER, WE FIND THAT THE ASSESSEE HAD SUBMITTED DETAILS OF TAX, BREAK-UP OF WHICH WAS SUBMITTED TO ASSESSING A UTHORITY, A COPY OF WHICH IS PLACED AT PAGES 95 TO 111 OF THE PAPER BOO K. THEREFORE, WE DEEM IT APPROPRIATE TO REMAND THIS ISSUE ALSO BACK TO TH E ASSESSING OFFICER WHO SHOULD READJUDICATE ON THE ISSUE AFTER GOING THROUG H THE SUBMISSIONS OF THE ASSESSEE. 11. NOW COMING TO LAST GROUNDS OF APPEAL I.E. GROUN D NO. 5 & 6. WE FIND THAT THE ASSESSING OFFICER HAD MADE ADDITION ON ACC OUNT OF NON CONFIRMATION OF SUNDRY CREDITORS. THE ASSESSING OF FICER DURING REMAND PROCEEDINGS AGAIN ISSUED NOTICE U/S 133(6) TO SUCH CREDITORS AND PART OF THE CREDITORS RESPONDED AND THEREFORE, LEARNED CIT(A) A LLOWED PART RELIEF TO THE ASSESSEE. LEARNED A. R. BEFORE US HAS ARGUED THAT THE ABOVE CREDITORS WERE TRADE CREDITORS WHO HAD BEEN PAID THROUGH BANKING C HANNEL AND THE CONFIRMATION OF THE SAME WAS AVAILABLE WITH THEM. THE LEARNED CIT(A) HAS HELD THAT DURING REMAND PROCEEDINGS THE ASSESSEE HA D NOT CO-OPERATED AND HE HAS CONFIRMED THE ADDITION BY HOLDING THAT THE N OTICES ISSUED TO CREDITORS HAD RETURNED BACK UNSERVED. HOWEVER, WHILE CONFIRM ING THE ADDITION HE HAS IGNORED THE FACT THAT THE ASSESSEE HAD CLAIMED TO H AVE MADE PAYMENTS TO THESE CREDITORS THROUGH BANKING CHANNELS AND ASSESS EE WAS HAVING CONFIRMATION FROM THESE CREDITORS. THEREFORE, WE D EEM IT APPROPRIATE TO REMAND THIS ISSUE ALSO BACK TO THE FILE OF THE ASSE SSING OFFICER TO ADJUDICATE THE ISSUE AFRESH. THESE GROUNDS ARE ALLOWED FOR ST ATISTICAL PURPOSES. 12. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND OF APPEAL WHICH READS AS UNDER: I.T.A. NO.350 & 410/LKW/2017 ASSESSMENT YEAR:2012-13 14 THAT WITHOUT PREJUDICE TO THE GROUNDS ABOVE, IF IN CASE ANY ADDITION IS SUSTAINED, THE DEDUCTION UNDER CHAPTER VI-A ALLOWABLE BE ALLOWED ON THE INCOME FINALLY ASSESSED . 13. IN THIS RESPECT OUR ATTENTION WAS INVITED TO A COPY OF CBDT CIRCULAR ALSO, A COPY OF WHICH IS PLACED AT PAGES 193 AND 19 4 OF THE PAPER BOOK WHICH SAYS THAT IF THE EXPENDITURE IS DISALLOWED AN D SUCH EXPENDITURE IS RELATED TO THE BUSINESS ACTIVITY AGAINST WHICH THE CHAPTER VI-A DEDUCTION HAS BEEN CLAIMED, THE DEDUCTION NEEDS TO BE ALLOWED ON THE ENHANCED PROFITS. SINCE WE HAVE REMANDED THE ENTIRE ISSUE R AISED BY THE ASSESSEE TO THE ASSESSING OFFICER FOR READJUDICATION, THE ASSES SING OFFICER WILL LOOK INTO THIS ASPECT OF ADDITIONAL GROUND ALSO. IN VIEW OF THE ABOVE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALSO REMITTED BACK TO THE ASSESSING OFFICER FOR ADJUDICATION. ACCORDINGLY, THIS GROUND IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED WHEREAS THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATIS TICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 30/11 /2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:30/11/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW A.R.