DCIT CIR -3, THANE V. NCC-SMC (JV), THANE

ITA 514/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7782 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 16-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 23-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANALALCHAND; MRS VANDANA SAGAR
• Keywords: Difference of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI D. MANMOHAN, VP AND SHRI T.R. SOOD, A M I.T.A. NO. 514/MUM/2009 ASSESSMENT YEAR: 2005-06 DY. COMMISSIONER OF INCOME-TAX, CIR.3, VARDAAN BLDG., LOWER GROUND FLOOR, MIDC, WAGLE ESTATE, THANE VS. M/S.NCC-SMC (JV), AJIT SHOPPING CENTRE, GALA NO. 19, 1ST FLOOR, NEAR ARADHANA CINEMA, THANE PAN : AAEFN 0093 N (APPELLANT) (RESPONDENT) APPELLANT BY :: S/SHRI S.S. RANA, LAL CHAND & MRS. VANDANA SAGAR RESPONDENT BY :: NONE O R D E R PER T.R. SOOD (AM): IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GR OUND: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS NOT JUSTIFIED IN ALLOWING DEDUCTION U/S.80IA OF THE I.T.ACT, 1961M RELYING UPON ORDER OF THE ITAT MUMBAI, IN THE CASE OF M/S. PATEL ENGG LTD. (2004) 84 TTJ(MUM) 646, INASMUCH AS THE DEPARTMENT HAS NOT AC CEPTED THE REFERRED ORDER OF THE ITAT AND PREFERRED AN APPEAL TO HIGH C OURT, MUMBAI, AGAINST THE SAME. 2. IN THIS CASE NOTICE WAS ISSUED THROUGH RPAD BUT THE SAME WAS RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARK PARTY NOT RESID ING AT THE GIVEN ADDRESS. WE HAVE PROCEEDED TO DECIDE THE ISSUE ON EX PARTE BASIS BEC AUSE IT WAS POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE ISSUE INVOLVED IN THIS APPEAL IS DIRECTLY COVERED BY THE DECISION OF THE LARGER BENCH OF THE TRIBUNAL IN THE CASE OF B.T. PATIL & SONS BELGAUM CONSTRUCTION (P.) LTD. V. ACIT (35 SOT 171). 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS HEARD. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE LEARNED DE PARTMENTAL REPRESENTATIVE AND RELEVANT MATERIAL ON RECORD, WE FIND THAT FROM THE PERUSAL OF TENDER FORMS AND COPIES OF AGREEMENT, THE ASSESSING OFFICER OPINED THAT THE AS SESSEE WAS ENGAGED ONLY AS A CONTRACTOR ITA NO.5980/M/08 M/S. BILL POWER LTD. 2 IN THE EXECUTION OF WATER SUPPLY PROJECT. THEREFOR E, ASSESSEE WAS NOT ENTITLED TO DEDUCTION U/S.80IA BECAUSE THE SAME WAS AVAILABLE ONLY TO THE PERSONS ENGAGED IN THE DEVELOPMENT OF INFRASTRUCTURE SECTOR AND ACCORDINGLY, DEDUCTION U/ S.80IA WAS DENIED. 5. LEARNED CIT(A) FOLLOWING THE EARLIER YEARS ORDER AN D FOLLOWING THE DECISION OF THE LARGER BENCH IN THE CASE OF B.T. PATIL & SONS BELG AUM CONSTRUCTION (P.) LTD. V. ACIT(SUPRA) REVERSED THE ORDER AND DIRECTED THE ASSESSING OFFIC ER TO ALLOW DEDUCTION U/S.80IA OF THE ACT. 6. RECENTLY THIS ISSUE CAME UP BEFORE THE LARGER BENCH OF THE TRIBUNAL IN THE CASE OF B.T. PATEL & SONS BELGLAUM CONSTRUCTION (P.) LTD. V. ACIT (SUPRA) AND ULTIMATELY IT WAS OBSERVED AS UNDER: SECTION 80-IA OF THE INCOME-TAX ACT, 1961 DEDUCT IONS PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS ASSESSMENT YEARS 2000-01 AND 2001-02 ASSESSEE, A CIVIL CONTRACTOR, WAS ENGAGED IN CONSTR UCTION OF VARIOUS PROJECTS OF GOVERNMENT OF MAHARASHTRA, GOVERNMENT OF KARNATA KA AND VARIOUS LOCAL AUTHORITIES- IT FURNISHED ITS RETURNS DECLARING TOT AL INCOME AFTER CLAIMING DEDUCTION UNDER SECTION 80-IA THESE AMOUNTS WERE COMPUTED AFTER SHOWING NET PROFIT FROM BUSINESS OF INFRASTRUCTURE PROJECT CLAIMED TO HAVE BEEN CARRIED ON BY ASSESSEE DURING RELEVANT YEARS ASSESSING OFFICER DID NOT ALLOW DEDUCTION AS IN HIS OPINION ASSESSEE HAD NOT FULFILLED CONDITIONS STIPULATED IN SUB-SECTION(4) OF SECTION 80-IA INASM UCH AS INFRASTRUCTURE WAS NOT OWNED BY ASSESSEE-COMPANY; THERE WAS NO AGREEME NT BETWEEN ASSESSEE-COMPANY AND CENTRAL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR DEVELOPIN G OR OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAININ G AND INFRASTRUCTURE FACILITY, ASSESSEE HAD NOT DONE ANY BUSINESS OF INF RASTRUCTURE FACILITY AS IT HAD JUST CONSTRUCTED PROPERTIES BELONGING TO GOVERNMENT /STATUTORY BODIES AND PARTED WITH THEM AFTER GETTING CONTRACT AMOUNT FIXE D FOR THIS PURPOSE ON APPEAL, COMMISSIONER(APPEALS) HELD THAT ASSESSEE CO ULD NOT BE CALLED A DEVELOPER IN SENSE OF SECTION 80-IA BECAUSE NO AGRE EMENT WAS SIGNED BY IT WITH CENTRAL GOVERNMENT OR STATE GOVERNMENT OR LOCA L AUTHORITIES FOR DEVELOPMENT OF PROJECTS UNDER BOT OR BOOT SCHEME HE FURTHER HELD THAT ASSESSEE WAS A MERE CONTRACTOR FOR EXECUTING PROJEC TS OF VARIOUS GOVERNMENTAL AUTHORITIES ACCORDINGLY, COMMISSIONE R (APPEALS) UPHELD ORDER ASSESSING OFFICER DENYING BENEFIT OF DEDUCTIO N TO ASSESSEE UNDER SECTION 80-IA(4) ON SECOND APPEAL, JUDICIAL MEMBE R ALLOWED ASSESSEES CLAIM WHEREAS ACCOUNTANT MEMBER CONFIRMED ORDER PAS SED BY REVENUE AUTHORITIES IN VIEW OF DIFFERENCE OF OPINION, MAT TER WAS REFERRED TO A LARGER BENCH - IT WAS NOTICED FROM RECORDS THAT SPHERE OF WORK ASSIGNED TO ASSESSEE WAS SIMPLY TO DO JOB OF CIVIL CONSTRUCTION AND IT WAS NOT INVOLVED IN PLANNING AND DEVELOPMENT OF INFRASTRUCTURE FACILITY AS A WHOLE IT WAS ALSO NOTED THAT ASSESSEE WAS BOUND TO CARRY OUT CONSTRUC TION WORK AS PER REQUIREMENTS OF STATE GOVERNMENT(S)/STATUTORY BODIE S AND COULD NOT DEVIATE BY EVEN AN INCH FROM PLAN ASSIGNED TO IT WHETHER ON FACTS, IT WAS CLEAR THAT ASSESSEE WAS A MERE CONTRACTOR AND NOT DEVELOPER AN D, THEREFORE, ITS CLAIM FOR DEDUCTION UNDER SECTION 80-IA(4) FAILED ON BOTH COUNTS, VIZ., IT WAS NEITHER ITA NO.5980/M/08 M/S. BILL POWER LTD. 3 A DEVELOPER NOR IT FITTED INTO ANY OF CATEGORIES OF ELIGIBLE BUSINESS OF (I) DEVELOPING, (II) MAINTAINING AND OPERATING INFRASTR UCTURE FACILITY ON ONE HAND OR (III) DEVELOPING, MAINTAINING AND OPERATING ANY INFRASTRUCTURE FACILITY ON OTHER HELD, YES. 7. RESPECTFULLY FOLLOWING THE ABOVE ORDER, WE SET ASID E THE ORDER OF THE LEARNED CIT(A) AND RESTORE THE ORDER OF THE ASSESSING OFFICER. 8. IN THE RESULT, REVENUES APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 2 ND DAY OF FEBRUARY, 2010. SD. SD. (D. MANMOHAN) (T.R. SOOD ) VICE-PRESIDENT ACCOUNTANT MEMBR MUMBAI, DATED THE 2 ND FEBRUARY, 2010. KN COPY TO: 1. THE ASSESSEE. 2. THE DCIT, CIR-3, THANE 3. THE CIT-II, THANE 4. THE CIT(A)-I, THANE 5. THE DR, B BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, I.T.A.T.MUMBAI ITA NO.5980/M/08 M/S. BILL POWER LTD. 4 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 27.01.2010 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 27.01.2010 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER