M/S VINOD KUMAR SHUKLA CONST. PVT. LTD., Bhopal V. THE ACIT 3(1), Bhopal

ITA 546/IND/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2235 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 17-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Retrospective amendment
• Section: 143(3)

Judgement Text

M/S VINOD KUMAR SHUKLA CONST. PVT. LTD, ITA NO.546 /IND/2016 ASSESSMENT YEAR 2011-12 PAGE 1 OF 8 , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCHE, INDORE , .., BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER ITA NO.546/IND/2016 ASSESSMENT YEAR: 2011-12 M/S. VINOD KUMAR SHUKLA CONST. PVT. LTD, BHOPAL / VS. ACIT - 3(1) BHOPAL (APPELLANT) (REVENUE ) P.A. NO.AAACV5190P APPELLANT BY SHRI PRAKASH JAIN, CA REVENUE BY SHRI MOHD. JAVED SR.DR DATE OF HEARING: 26.07.2017 DATE OF PRONOUNCEMENT: 11.8.2017 M/S VINOD KUMAR SHUKLA CONST. PVT. LTD, ITA NO.546 /IND/2016 ASSESSMENT YEAR 2011-12 PAGE 2 OF 8 / O R D E R PER CHANDRAMOHAN GARG, J.M: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, BHOPAL [HER EINAFTER REFERRED TO AS THE CIT(A)] DATED 03.02.2016 AND PER TAINS TO ASSESSMENT YEAR 2911-12 AS AGAINST APPEAL DECIDED I N ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT DATED 14.03.2014 OF ACIT, 3(1), BHOPAL [HEREINAFTER REFERRED TO AS THE AO]. EARLIER THIS APPEAL WAS DISMISSED AS EX-PARTE QUASIS AND SUBSEQUENTLY IT WA S RECALLED BY ORDER DATED 24.05.2017 POSTED IN THE MA NO.24/2017 OF THE APPELLANT-ASSESSEE. 2 . THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASS ESSEE:- 1. THAT IMPUGNED ORDER PASSED IS BAD IN LAW AS WELL AS ON THE FACTS. IT IS BASED ON INCORRECTNESS INTERPRETATION OF LAW AND THE FACTS HAVE ALSO BEEN INCORRECTLY CONSTRUED. 2.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING AOS ACT ION FOR DISALLOWING DEDUCTION U/S 80!A(4) AMOUNTING TO RS.1,23,33,267/- WITHOUT M/S VINOD KUMAR SHUKLA CONST. PVT. LTD, ITA NO.546 /IND/2016 ASSESSMENT YEAR 2011-12 PAGE 3 OF 8 APPRECIATING THE FACT THAT DURING THE ASSESSMENT YE AR IN QUESTION ASSESSEE HAS DEVELOPED AND CONSTRUCTED NEW INFRASTR UCTURE FACILITIES VIZ, CONSTRUCTED NEW BRIDGE AND ROADS. 2.2 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE FAC T THAT THE EXPLANATION TO SECTION 80IA(4) INSERTED BY FINANCE ACT, 2009, WITH EFFECT FROM 01.04.2000 IS NOT APPLICABLE ON THE APP ELLANT COMPANY. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING THE ADDIT ION OF RS.2,00,000/- OUT OF DISALLOWANCE OF RS.3,00,000/- MADE ON ACCOUNT OF BUSINESS PROMOTION EXPENSES. 3 . THE LD. ASSESSEES REPRESENTATIVE (AR) REITERATED THAT THE ASSEESEES WRITTEN SUBMISSIONS FILED BEFORE THE CIT (A) WHICH READS AS FOLLOWS; THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION WORK, BY UNDERGOING CONTRACT WITH THE STATE GOVERNMENT AND CENTRAL GOVERNMENT DEPARTMENT, SPECI ALLY TO CONSTRUCT BRIDGES AND ROADS, BY FULFILLING ALL THE PROVISIONS LAID DOWN IN THE ACT, WITH REFERENCE TO SECTION 80IA(4)( I). FURTHER, THE ASSESSEE BEING A DEVELOPER OF THE IN FRASTRUCTURE FACILITIES IS FULLY ENTITLED FOR EXEMPTION UNDER TH E SAID SECTION. AS M/S VINOD KUMAR SHUKLA CONST. PVT. LTD, ITA NO.546 /IND/2016 ASSESSMENT YEAR 2011-12 PAGE 4 OF 8 THE ASSESSEE FULFILL ALL THE CONDITIONS REQUIRED TO AVAIL THE BENEFITS AVAILABLE UNDER THE ACT. THE CLAIM OF U/S 80IA(4) IS GENUINE CONSIDERING THE FACT THAT THE ASSESSEE IS ENGAGED I N THE DEVELOPMENT OF INFRASTRUCTURE WORK AWARDED BY THE GOVERNMENT. 4. REPLYING TO THE ABOVE THE LD. DEPARTMENTAL REPRESENTATIVE (DR)DREW OUR ATTENTION TOWARDS PAGE 4.4 OF THE FIRST APPELLATE ORDER AND SUBMITTED THAT AS PER WRITTEN SUBMISSION OF THE ASSESSEE NO APPEAL HAS BE EN FILED FOR ASSESSMENT YEAR 2010-11 I.E. FOR IMMEDIAT ELY PRECEDING YEAR AND THE ISSUE IS COVERED IN FAVOUR O F THE REVENUE AND AGAINST THE ASSESSEE BY THE ORDER OF TH E ITAT, INDORE BENCH IN THE CASE OF ACIT V/S M/S. R.K . GUPTA CONTRACTORS AND ENGINEERS PVT. LTD DATED 28.7.2010 PASSED IN ITA NO.517 & 522/IND/2009. 5 . ON CAREFUL CONSIDERATION OF FACTS AND CIRCUMSTANC ES OF THE CASE AND RIVAL SUBMISSION WE ARE OF THE VIEW TH AT ITAT, INDORE BENCH HAS ADJUDICATED THE ISSUE IN THE CASE OF ACIT V/S M/S. R.K. GUPTA CONTRACTORS AND ENGINEE RS PVT. LTD (SUPRA) WHEREIN THE TRIBUNAL HAS HELD AS F OLLOWS; M/S VINOD KUMAR SHUKLA CONST. PVT. LTD, ITA NO.546 /IND/2016 ASSESSMENT YEAR 2011-12 PAGE 5 OF 8 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. A CLARIFICATORY EXPLANATION BELOW SUB-SECTION (13) OF SECTION 80IA OF THE ACT WAS INSERTED WITH RETROSPECTIVE EFFECT FROM 1.4.2000 BY THE FINANCE ACT, 2009, AS PER WHICH NOTHING CONTAINED IN THIS SECTIO N SHALL APPLY IN RELATION TO A BUSINESS REFERRED TO IN SUB-SECTION ( 4) WHICH IS IN THE NATURE OF A WORKS CONTRACT AWARDED BY ANY PERSON INCLUDING THE CENTRAL OR STATE GOVERNMENT AND EXECUTED BY THE UND ERTAKING OR ENTERPRISE REFERRED TO IN SUB-SECTION (1). THE ASS ESSMENT YEAR INVOLVED IN THE PRESENT APPEAL BEING 2006-07, THERE FORE, THIS EXPLANATION IS CLEARLY APPLICABLE TO THE FACTS OF T HE PRESENT APPEAL. IT HAS BEEN SPECIFICALLY PROVIDED THAT THE PROVISIO 0NS U/S 80IA OF THE ACT SHALL NOT APPLY TO A BUSINESS REFERRED TO IN SU B-SECTION (4) OF SECTION 80IA OF THE ACT, WHICH IS OF THE NATURE OF WORKS CONTRACTS. IN SUB-SECTION (1), THE WORD ANY BUSINESS HAS BEE N MENTIONED. IDENTICAL ISSUE HAS BEEN DELIBERATED UPON AND DECID ED BY THE TRIBUNAL IN THE AFORESAID CASE, THE RELEVANT PORTIO N WHEREOF HAS BEEN REPRODUCED ABOVE. WE, THEREFORE, HOLD THAT SI NCE NO DEDUCTION IS ALLOWABLE TO THE ASSESSEE U/S 80IA OF THE ACT, T HE LD. CIT(A) WAS NOT JUSTIFIED IN GRANTING THE SAME. THE ORDER OF L D. CIT(A) ON THIS ISSUE IS, THEREFORE, SET-ASIDE AND THE APPEAL OF TH E REVENUE IS ALLOWED. M/S VINOD KUMAR SHUKLA CONST. PVT. LTD, ITA NO.546 /IND/2016 ASSESSMENT YEAR 2011-12 PAGE 6 OF 8 4. AS FAR AS THE APPEAL OF THE ASSESSEE (ITA NO.52 2/IND/2009) IS CONCERNED, SINCE WHILE DECIDING THE APPEAL OF THE R EVENUE, WE HAVE HELD THAT NO DEDUCTION U/S 80IA OF THE ACT IS ALLOW ABLE TO THE ASSESSEE, THERE IS NO QUESTION OF BIFURCATION OF IN COME/RECEIPTS FOR THE PURPOSE OF DEDUCTION U/S 80IA OF THE ACT, THERE FORE, THE DECISION OF THE LD. CIT(A) IN THAT REGARD CANNOT BE SUSTAINE D BECAUSE THE ASSESSEE IS NOT AT ALL ELIGIBLE FOR DEDUCTION U/S 8 0IA OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALSO DIS MISSED. FINALLY, THE APPEAL OF THE REVENUE IS ALLOWED WHER EAS THE APPEAL OF THE ASSESSEE IS DISMISSED. 6 . IN VIEW OF THE ABOVE, AT THE VERY OUTSET WE MAY P OINT OUT THAT AS PER MANDATE AND THE SETTLED LEGAL POSITION THE P ROVISIONS OF SECTION 80IA OF THE ACT DOES NOT APPLY TO THE BUSIN ESS REFERRED TO IN SUB SECTION (4) OF SECTION 80IA OF T HE ACT WHICH IS OF THE NATURE OF WORKS CONTRACT AND IN SUB-SEC TION (1), THE WORDS ANY BUSINESS HAS BEEN MENTIONED. THE LD. AR COULD NOT CONTROVERT THE FACT THAT THE FACTS AND CIRCUMST ANCES OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE OF M/S. R.K. GUPTA CONTRACTORS AND ENGINEERS PVT. LTD (SUPRA) AN D THUS WE HOLD THAT NO DEDUCTION IS ALLOWABLE TO THE ASSES SEE U/S 80IA OF THE ACT AS THE APPELLANT IS ONLY EXECUTING THE WORKS M/S VINOD KUMAR SHUKLA CONST. PVT. LTD, ITA NO.546 /IND/2016 ASSESSMENT YEAR 2011-12 PAGE 7 OF 8 CONTRACT AWARDED BY THE STATE/CENTRAL GOVERNMENTS A ND HE IS ONLY A WORKS CONTRACTOR. CONSEQUENTLY, FOLLOW ING THE DECISION OF TRIBUNAL IN THE CASE OF ACIT V/S R.K. G UPTA CONTRACTORS AND ENGINEERS PVT. LTD (SUPRA) WE HOLD THAT THE CONCLUSION DRAWN AT 4.4 OF THE ORDER OF THE CIT(A) IS CORRECT AND SUSTAINABLE, THUS WE HAVE NO REASON TO INTERFER E WITH THE SAME. IT IS ALSO RELEVANT TO MENTION THAT WHILE DI SMISSING THE CLAIM OF THE ASSESSEE THE CIT(A) RIGHTLY NOTED THAT NO APPEAL HAS BEEN FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010-11 I.E. IMMEDIATELY PRECEDING YEAR, THEREFORE THE CONC LUSION DRAWN BY THE FIRST APPELLATE AUTHORITY ALSO GETS ST RONG SUPPORT FROM THIS FACT. 7 . IN THE RESULT THE APPEAL OF THE ASSESSEE BEING DE VOID OF MERITS IS DISMISSED . ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11.08.2 017. SD/- SD/- (O.P. MEENA) ( CHANDRA MOHAN GARG ) /ACCOUNTANT MEMBER / JUDICIAL MEMBER INDORE; DATED : 11/08/2017 DEV/ M/S VINOD KUMAR SHUKLA CONST. PVT. LTD, ITA NO.546 /IND/2016 ASSESSMENT YEAR 2011-12 PAGE 8 OF 8 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE