RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORP. LTD., Jaipur V. INCOME TAX OFFICER, Jaipur

ITA 56/JPR/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6150 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 18-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY MALIK CIT A
• Keywords: Depreciation; Question of law

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 56/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2013-14 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. SETU BHAWAN, JHALANA DOONGRI, JAIPUR CUKE VS. THE ITO, WARD-6(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCR 9650 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI AJAY MALIK (ADDL. CIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 14/05/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 17/05/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-2, JAIPUR DATED 30.11.2017 FOR ASSESSMENT YE AR 2013-14 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND S OF APPEAL AS UNDER:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT DECIDING THE ALLOWABILITY OF PRIOR PERIOD EXPENSES OF RS.10,22,6 08/- CLAIMED ON ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 2 ACCOUNT OF OVERHEAD & PLANT RUNNING EXPENSES WHICH CRYSTALLIZED DURING THE YEAR ON APPROVAL OF THE EXPENSES. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE PRIOR PERIOD EXPENSES OF RS.2,04,87,540/- ON ACCOUN T OF INTEREST ON BOT ASSET IGNORING THAT THE SAID EXPENSES IS CLAIME D ON ACCOUNT OF CHANGE IN THE METHOD OF DEPRECIATION ON BOT ASSET V IDE NOTIFICATION DT. 17.04.2012 WHICH RESULTED IN REVISION IN THE WO RKING OF INTEREST AND THUS, THE CLAIM HAS CRYSTALLIZED DURING THE YEA R. SHE HAS FURTHER ERRED IN DISALLOWING THE EXPENDITURE BUT AT THE SAM E TIME NOT EXCLUDING THE PRIOR PERIOD INCOME OF RS.1187.70 LAC S DECLARED DURING THE YEAR. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT ADMINISTRATIVE EXPENSES AND THE EMPLOYEES COST IN R ESPECT OF 5 UNITS WHERE TOLL COLLECTION TAKES PLACE SHOULD BE A LLOCATED AGAINST THE BOT PROJECTS WHERE DEDUCTION U/S 80-IA(4) HAS B EEN CLAIMED IGNORING THAT ALL EXPENSES HAS BEEN CONSIDERED IN R ESPECT OF THE PROJECTS ON WHICH DEDUCTION U/S 80-IA(4) HAS BEEN C LAIMED. 2. REGARDING GROUND NOS. 1 AND 2, BRIEFLY THE FACTS OF THE CASE ARE THAT DURING THE YEAR, ASSESSEE CLAIMED PRIOR PERIOD EXPE NSES OF RS.10,90,32,614/- AND OFFERED FOR TAX PRIOR PERIOD INCOME OF RS.12,03 ,52,172/-. OUT OF THE PRIOR PERIOD EXPENSES OF RS.10,90,32,614/-, THE ASSESSEE ADDED DEPRECIATION OF RS. 8,55,54,748/- IN THE COMPUTATION OF TOTAL INCOME. T HUS, PRIOR PERIOD EXPENSE IS CLAIMED AT RS.2,34,79,830/- WHICH COMPRISES OF T HE FOLLOWING AMOUNTS:- GENERAL OVERHEAD & PLANT RUNNING EXPENSES R S. 10,22,608/- REVERSAL OF CENTAGE INCOME RS. 19,69, 682/- INTEREST ON BOT ASSET RS.2,0 4,87,540/- THIS AMOUNT OF RS.2,34,79,830/- WAS ADDED BY THE ASSESSING OFFICER IN COMPUTING THE TOTAL INCOME BY NOT ACCEPTING THE EXP LANATION OF ASSESSEE. THE ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 3 LD. CIT(A) DELETED THE ADDITION OF RS.19,69,682/- B Y ACCEPTING THE EXPLANATION OF ASSESSEE. IN RESPECT OF GENERAL OVER HEAD & PLANT RUNNING EXPENSES OF RS. 10,22,608/-, NO FINDING IS GIVEN BY THE LD CIT(A). IN RESPECT OF INTEREST ON BOT ASSET OF RS. 2,04,87,540/-, THE LD CIT(A) ACCEPTED THAT DUE TO AMENDMENT IN THE METHOD OF DEPRECIATION ON BOT A SSET VIDE NOTIFICATION DATED 17.04.2012, WORKING OF INTEREST IS REVISED BU T NO BREAK UP OF THIS INTEREST AND WHETHER THE SAME HAS BEEN PAID IS PROV IDED AND THEREFORE, SHE CONFIRMED THE DISALLOWANCE. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE IN RESPECT OF THE AMOUNT OF RS.10,22,608/-, THE SAME COMPRISE OF GENERAL OVERHEAD EXPENSES OF RS.2,96,486/- AND PLANT RUNNING EXPENSE S OF RS.7,26,122/-. THE GENERAL OVERHEAD EXPENSES ARE MAINLY ON ACCOUNT OF LEGAL EXPENSES, STAFF WELFARE EXPENSES, TELEPHONE EXPENSES, TRAVELLING EX PENSES, VEHICLE EXPENSES, SALARY EXPENSES, ETC. PERTAINING TO AY 2012-13, THE EXPENDITURE FOR SAME WAS APPROVED BY THE APPROPRIATE AUTHORITY DURING THE YE AR AND THUS CRYSTALLIZED DURING THE YEAR. THE SAME IS THE CASE IN RESPECT OF PLANT RUNNING EXPENSES. THUS, THESE EXPENSES ARE ALLOWABLE IN THE YEAR UNDE R CONSIDERATION. OTHERWISE ALSO, THE TAX RATE BEING THE SAME, IT MAK ES NO DIFFERENCE WHETHER THE EXPENDITURE IS ALLOWED IN THE CURRENT YEAR OR I N THE PREVIOUS YEAR. FURTHER WHEN THE PRIOR PERIOD INCOME OF RS. 12,03,52,172/- IS ASSESSED TO TAX IN THE YEAR UNDER CONSIDERATION, THE PRIOR PERIOD EXPENDIT URE CLAIMED BY THE ASSESSE CANNOT BE DISALLOWED. RELIANCE IS PLACED ON THE DEC ISION OF THE HONBLE RAJASTHAN HIGH COURT IN CASE OF PCIT VS. RAJASTHAN STATE SEED CORPORATION LTD. (2016) 386 ITR 267 WHEREIN IT WAS HELD AS UNDER: INSOFAR AS THE PRIOR PERIOD EXPENSES IS CONCERNED A FINDING OF FACT HAS BEEN RECORDED BY THE APPELLATE AUTHORITIES THAT APP ROVAL FOR PAYMENT OF THE SAID EXPENDITURE WAS GIVEN DURING THE YEAR UNDE R APPEAL THEREFORE ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 4 THE LIABILITY CRYSTALLIZED DURING THE YEAR AND SIMI LAR METHOD WAS BEING REGULARLY FOLLOWED BY THE ASSESSEE CONSISTENTLY AND WHEN THERE IS A FINDING RECORDED BY THE APPELLATE AUTHORITIES THAT THE EXPENDITURE CRYSTALLIZED DURING THE YEAR, WAS WRITTEN IN THE BO OKS THIS YEAR AND ON YEAR TO YEAR BASIS WAS CLAIMED IN THE SAME MANNER A ND FASHION WAS RIGHTLY CLAIMED AND ALLOWED DURING THE YEAR, IS A F INDING OF FACT. IN OUR VIEW THE DELETION OF DISALLOWANCE IS BASED O N MATERIAL EVIDENCE ON RECORD AND IS A FINDING OF FACT, NO QUESTION OF LAW MUCH LESS SUBSTANTIAL QUESTION OF LAW CAN BE SAID TO EMERGE. WE FIND NO P ERVERSITY OR ILLEGALITY IN THE ORDER IMPUGNED SO AS TO CALL FOR INTERFERENC E OF THIS COURT. 4. THE LD AR FURTHER PLACED RELIANCE ON CIT VS. EXC EL INDUSTRIES LTD. 358ITR 295 (SC), SAURASHTRA CEMENT & CHEMICAL INDUS TRIES LTD. VS CIT 213 ITR 523 (GUJ.) AND RAJASTHAN STATE INDUSTRIAL DEVEL OPMENT & INV. CORPN. LTD. VS. ACIT (66 & 354/JP/08, DATED 30-09-2008 FOR AY 2004-05 AN D 138 & 235/JP/09 FOR AY 05-06 DATED 08-01-2010). IT WAS FURTHER SUBMITTED THAT IN ASSESSEES OWN CASE, THE TRIBUNAL FOR AY 2011-12 HA S ALLOWED THE PRIOR PERIOD EXPENDITURE CLAIMED BY THE ASSESSEE AS PER THE FIND ING GIVEN IN PARA 6.2, PG 7-8 OF ITS ORDER. 5. IN SO FAR AS CLAIM OF INTEREST ON BOT ASSET IS C ONCERNED, IT WAS FURTHER SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION BECAUSE OF AMENDMENT IN SCHEDULE XIV OF THE COMPANIES ACT, 1956, THE METHOD OF RECOGNITION OF REVENUE AND AMORTIZATION OF TOLL ASSET WAS CHANGED. AS A RESULT OF SUCH CHANGE, ASSESSEE RECOGNIZED PRIOR PERIOD TOLL INCOM E OF RS.1187.70 LACS AND ALSO THE PRIOR PERIOD INTEREST EXPENDITURE OF RS.20 4.88 LACS. THUS, WHEN THE AO HAS TAX THE PRIOR PERIOD TOLL INCOME, THE PRIOR PERIOD INTEREST EXPENDITURE CANNOT BE DISALLOWED. THE RELEVANT PAPER IN THIS CO NNECTION IS PLACED AT PB ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 5 12-17. SINCE THE NOTIFICATION FOR THE CHANGE OF THE METHOD OF RECOGNITION OF REVENUE/ AMORTIZATION WAS NOTIFIED ON 17.04.2012, T HE PRIOR PERIOD INTEREST CRYSTALLIZED DURING THE YEAR AND THEREFORE, THE SAM E IS ALLOWABLE AS EXPENDITURE DURING THE YEAR. IT WAS SUBMITTED THAT THE LD. CIT(A) ACCEPTED THIS FACT BUT STILL SHE DISALLOWED THE EXPENDITURE IGNORING THAT THE CLAIM OF INTEREST IS ONLY IN RESPECT OF THE LOAN OBTAINED FO R CREATION OF THE TOLL ASSET. HENCE, THE DISALLOWANCE CONFIRMED BY LD. CIT(A) IN VIEW OF THE ABOVE FACTS AND ALSO IN VIEW OF THE JUDGMENTS REFERRED ABOVE IS UNJUSTIFIED AND THE SAME BE DELETED. 6. THE LD DR IS HEARD WHO HAS RELIED ON THE FINDING S OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, REGARDING GENERAL OVERHEAD AND PLANT RUNNING EXPENSES, IT HAS BEEN CONTENDED THAT THESE EXPENDITURE WERE APPR OVED BY THE APPROPRIATE AUTHORITY DURING THE YEAR AND THUS HAS CRYSTALLIZED DURING THE YEAR. IT IS NOTED THAT SIMILAR CONTENTION HAS BEEN TAKEN BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES, HOWEVER THERE IS NO FINDING WHIC H HAS BEEN RECORDED WHICH DEMONSTRATE THAT THESE EXPENSES HAVE BEEN APPROVED AND CRYSTALLIZED DURING THE YEAR. IN THE RESULT, WE ARE SETTING ASIDE THE MATTER TO THE FILE OF THE AO TO EXAMINE THE SAID CLAIM OF THE ASSESSEE AND THE L ATTER SHALL BE AT LIBERTY TO RAISE THE CONTENTIONS SO ADVANCED BEFORE US INCLUDI NG THE LEGAL PRECEDENTS WHICH HAVE BEEN RELIED UPON. 8. REGARDING INTEREST ON BOT ASSET IS CONCERNED, IT IS THE CONTENTION OF THE LD AR THAT THE SAME HAS BEEN CRYSTALLIZED DURIN G THE YEAR AND THEREFORE, THE SAME IS ALLOWABLE AS EXPENDITURE DURING THE YEA R. THE LD CIT(A) HAS ACCEPTED THE SAID FACT BUT AT THE SAME TIME, IN ABS ENCE OF DETAILS OF SUCH ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 6 INTEREST EXPENDITURE AND WHETHER THE SAME HAS BEEN ACTUALLY PAID OR NOT HAS NOT ALLOWED THE CLAIM OF THE ASSESSEE. THE DETAILS OF SUCH INTEREST EXPENDITURE IS NOT AVAILABLE ON RECORD EXCEPT THE FACT THAT SUC H INTEREST IS IN RESPECT OF LOAN OBTAINED FOR CREATION OF TOLL ASSETS. WHERE S UCH INTEREST IS PAID TO ANY PUBLIC FINANCIAL INSTITUTION OR STATE FINANCIAL COR PORATION OR STATE INDUSTRIAL INVESTMENT CORPORATION AS DEFINED IN SECTION 43B, T HEN IN SUCH A SCENARIO, THE LD CIT(A) IS CORRECT TO HOLD THAT UNLESS SUCH INTER EST HAS BEEN SHOWN AS ACTUALLY PAID, THE SAME CANNOT BE ALLOWED. HOWEVER , IN ABSENCE OF SPECIFIC DETAILS, IT IS DIFFICULT TO DETERMINE THE SAME. WE ARE ACCORDINGLY SETTING-ASIDE THE MATTER TO THE FILE OF THE AO TO EXAMINE THE SAM E AFRESH. IN THE RESULT, THE GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PUR POSES. 9. REGARDING GROUND NO. 3, BRIEFLY THE FACT OF THE CASE ARE THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80IA AT RS.4,70,61,3 22/- IN RESPECT OF TOLL PROJECT. THE AO OBSERVED THAT ESTABLISHMENT EXPENSE S OF RS.24,43,65,716/- AND ADMINISTRATIVE EXPENSES OF RS.5,11,24,469/- IS NOT ALLOCATED AGAINST THE INCOME ON WHICH DEDUCTION U/S 80IA IS CLAIMED. HE T HEREFORE, WORKED OUT PROPORTIONATE INDIRECT EXPENSES AGAINST SUCH INCOME AT RS.2,58,80,837/- CALCULATED AS UNDER AND ACCORDINGLY REDUCED THE CLA IM OF DEDUCTION U/S 80IA TO THAT EXTENT:- (A) NET RECEIPTS FROM ELIGIBLE PROJECTS RS. 61,67, 83,000/- (BOT TOLL COLLECTIONS) (B) TOTAL TURNOVER RS. 7,04,20,18,000/- (C ) INDIRECT EXPENSES (I) OTHER EXPENSES RS. 5,11,24,469/-. (II) PAYMENT & PROVISION FOR EMPLOYEES RS. 2 4,43,65,716/- TOTAL INDIRECT EXPENSES RS. 29,54,90,185/- (NOT ALLOCATED TO 80IA UNITS BY ASSESSEE) ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 7 PROPORTIONATE INDIRECT EXPENSES TO BE APPORTIONED T O 80IA UNITS ON THE BASIS OF TURNOVER: 29,54,90,185 X 61,67,83,000 = RS.2,58,80,837/- 7,04,20,18,000 10. THE RELEVANT FINDING OF THE CIT(A) IS REPRODUCE D AS UNDER: 5.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. DURING THE YEAR, THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80IA AT RS.4,70,61,322/- IN RESPECT OF TOLL PROJECT. THE ASSESSING OFFICER HELD THAT THE ESTABLISHMENT E XPENSES UNDER THE HEAD 'PAYMENT TO AND PROVISION FOR EMPLOYEE' AT RS.24,43 ,65,716/- AND 'ADMINISTRATIVE EXPENSES' AT RS. 5,11,24,469/- WERE NOT CHARGED TOWARDS INCOME DISCLOSED FROM VARIOUS TOLL ROAD PROJECTS. T HE ASSESSING OFFICER ALLOCATED THESE EXPENSES PROPORTIONATELY TO ROAD/BR IDGE PROJECTS. THE CIT(A) IN THE PREVIOUS YEAR ON IDENTICAL FACTS DISM ISSED THE CONTENTION OF THE APPELLANT THAT AS NO WORK OR EXPENDITURE RELATI NG TO BOT PROJECTS HAS BEEN INCURRED, NO PROPORTIONATE ALLOCATION SHOULD B E MADE. FURTHER, THE CIT(A) THEN DETERMINED THE EXPENDITURE UNDER THESE HEADS ALLOCABLE TO THE BOT PROJECTS AND DEDUCTION UNDER SECTION 80IA(4 ) WAS MODIFIED ACCORDINGLY. IN THE PRESENT PROCEEDINGS, IT WAS SUB MITTED THAT THE ISSUE HAS BEEN DECIDED BY THE HON'BLE ITAT, JAIPUR FOR AS SESSMENT YEAR 2011- 12 (IN ITA NO. 558/JP/2015). IN THE PRESENT PROCEEDINGS, IT WAS SUBMITTED THAT T HE HON'BLE ITAT IN ITS ORDER FOR ASSESSMENT YEAR 2011-12 AT SET ASIDE THE MATTER TO THE FILE OF THE AO TO APPORTION THE EXPENDITURE ON THE BASIS OF TURNOVER AND NOT INCOME WHICH HAS BEEN DONE BY THE AO. THE AR FURTHE R SUBMITTED THAT THE EXPENDITURE OF RS. 24.43 CRORES TOWARDS PAYMENT TO PROVISION FOR EMPLOYEES ALLOCATED BY THE AO RELATED TO THE HEAD O FFICE AS WELL AS 31 ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 8 UNITS OF THE ASSESSEE'S CORPORATION AND OUT OF THES E 31 UNITS, 26 UNITS ARE RELATED TO THE CONSTRUCTION WORK AND NO TOLL COLLEC TION TAKES PLACE. IT WAS CONTENDED THAT ONLY IN 5 UNITS BOTH CONSTRUCTION AN D TOLL COLLECTION TAKES PLACE, HENCE THE EXPENDITURE OF OTHER 26 UNITS SHOU LD NOT BE CONSIDERED FOR ALLOCATION. THIS ISSUE WAS ALSO DECIDED BY MY P REDECESSOR IN FAVOUR OF THE ASSESSEE IN A.Y11-12.THE AO IS DIRECTED TO CONS IDER THE ALLOCATION OF THESE UNITS ONLY. IT WAS FURTHER SUBMITTED THAT RS. 25 LACS PAID FOR STAMP DUTY FOR SHARE INCLUDED IN THE ADMINISTRATIVE EXPEN SE OF RS. 5.11 CRORES HAS ALREADY BEEN DISALLOWED IN THE COMPUTATION, AO TO VERIFY THE SAME AND MODIFY ACCORDINGLY. THUS THE DISALLOWANCE MADE BY THE AO IS CONFIRMED, SUBJECT TO THE ABOVE ADJUSTMENTS. THE GR OUND OF APPEAL IS PARTLY ALLOWED. 11. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE CORPORATION IS HAVING UNIT WISE AS WELL AS PROJECT WISE ACCOUNTING SYSTEM. AT THE YEAR END, ACCOUNTS OF THE UNITS ARE CONSOLIDATE D AT HEAD OFFICE AND BALANCE SHEET AND PROFIT & LOSS ACCOUNT IS PREPARED . IN RESPECT OF BOT PROJECTS, COMPANY HAS AWARDED THE WORK OF TOLL COLL ECTION TO THE CONTRACTOR WHO PAYS THE TOLL COLLECTION CHARGES AS PER THE TER MS OF THE AWARD. ALL EXPENSES ON SALARY/ADMINISTRATION ETC. IS BORN BY T HE CONTRACTOR. THEREFORE, THE CORPORATION DOES NOT INCUR ANY EXPENDITURE ON S ALARY OR ON ADMINISTRATION OF THE BOT COLLECTION WORK PROJECT. ONLY SMALL EXPENDITURE IS INCURRED IN THE BOT COLLECTION WORK WHICH IS DEBITE D IN WORKING OUT THE ELIGIBLE PROFIT OF THE BOT UNDERTAKING. THUS, THE C ORPORATION INCURS ONLY MEAGER TOLL EXPENDITURE, INTEREST COST IN RESPECT O F BOT ASSETS AND PROPORTIONATE COST OF BOT WORK IN RESPECT OF BOT PR OJECTS. ALL THESE EXPENSES HAVE BEEN CONSIDERED WHILE WORKING OUT THE ELIGIBLE PROFIT. ONCE ALL THE DIRECT AND INDIRECT EXPENSES INCURRED HAVE BEEN ACCOUNTED FOR IN CALCULATING THE ELIGIBLE PROFIT, THERE CANT BE FUR THER ALLOCATION OF PROPORTIONATE EXPENSES IN RESPECT OF EMPLOYEES COST AND ADMINISTRATIVE ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 9 EXPENSES INCURRED AT HEAD OFFICE AND AT VARIOUS UNI T OFFICES. HENCE, THERE CANNOT BE ANY DISALLOWANCE OUT OF THE CLAIM U/S 80I A MADE BY THE ASSESSEE. 12. IT WAS FURTHER SUBMITTED THAT SIMILAR ISSUE WAS CONSIDERED BY THE TRIBUNAL IN AY 2011-12 WHERE THE ASSESSEE HAS MADE 3 CLAIMS, FIRSTLY THAT THE TURNOVER TAKEN BY THE AO IS INCORRECT, SECONDLY THAT ASSESSEE HIMSELF HAS CONSIDERED THE EXPENDITURE AGAINST THE INCOME ELIGI BLE FOR DEDUCTION U/S 80IA AND THIRDLY THAT THE ALLOCATION OF HEAD OFFICE EXPENDITURE AS DONE BY THE LOWER AUTHORITIES IS NOT CORRECT. THE HONBLE I TAT FOUND MERIT IN THE CONTENTION OF ASSESSEE BUT SET ASIDE THE ISSUE TO A O TO VERIFY THE FIGURES FROM THE ACCOUNTS OF ASSESSEE. IN THE YEAR UNDER CO NSIDERATION, THERE IS NO DISPUTE ON THE TURNOVER. THEREFORE, THE ISSUE IS WH EN ASSESSEE HAS ALREADY ALLOCATED THE INDIRECT EXPENDITURE IN RELATION TO T HE TOLL PROJECT IN WORKING OUT THE INCOME, THE ESTABLISHMENT EXPENSES AND THE ADMI NISTRATIVE EXPENSES INCURRED AT HEAD OFFICE AND UNIT OFFICE CANNOT BE A LLOCATED IN ARRIVING AT THE INCOME OF TOLL PROJECTS. THEREFORE, THE DIRECTION O F LD. CIT(A) TO CONSIDER THE ALLOCATION OF THESE EXPENDITURE IN RESPECT OF 5 UNI TS WHERE BOTH THE CONSTRUCTION AND TOLL COLLECTION TAKES PLACE IS UNJ USTIFIED. 13. THE RELEVANT FINDING OF THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR A.Y 2011-12 ( ITA NO. 558/JP/2015 AND OTHERS DATED 08.09.2016) IS AS UNDER:- FROM THE AFORESAID SUBMISSIONS IT IS EVIDENT THAT THE CONTENTION OF THE ASSESSEE AGAINST DISALLOWANCE OF DEDUCTION ARE THRE E FOLD. FIRSTLY, THE TURNOVER AS TAKEN BY THE AO AND THE LD. CIT (A) IS INCORRECT. SECONDLY, THE ASSESSEE HIMSELF HAS CONSIDERED THE EXPENDITURE AGAINST THE INCOME ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA. T HIRDLY, THE ALLOCATION OF HEAD OFFICE EXPENDITURE AS DONE BY THE LOWER AUT HORITIES IS NOT CORRECT. THEREFORE, THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 10 DISALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 80 IA. WE FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. HOWEVER, THE FIGURES ARE REQUIRED TO BE VERIFIED FROM THE ACCOUN TS OF THE ASSESSEE. THEREFORE, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE ON THIS ISSUE. THE ISSUE OF CLAIM OF DEDUCTION UNDER SECTIO N 80IA IS RESTORED BACK TO THE FILE OF THE AO TO VERIFY THE CONTENTION OF THE ASSESSEE AS MADE IN THE WRITTEN BRIEF. IN CASE THE AO FINDS THA T THE FIGURES AS GIVEN IN THE WRITTEN BRIEF MATCHES WITH THE BOOKS OF ACCO UNT OF THE ASSESSEE, HE WOULD ACCORDINGLY RECOMPUTE THE DEDUCTION ALLOWA BLE TO THE ASSESSEE. NEEDLESS TO SAY THAT THE AO WOULD GIVE SU FFICIENT OPPORTUNITY TO THE ASSESSEE FOR FURNISHING THE EVIDENCES IN SUP PORT OF ITS CLAIM. THESE GROUNDS OF THE ASSESSEE ARE ALLOWED FOR STATI STICAL PURPOSES. 14. THE LD DR IS HEARD WHO HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CONTENTION OF THE LD AR IS THAT ONCE ALL THE DIRECT AND INDIRECT EXPENSES INCURRED HAVE BEEN ACCOUNTED FOR IN CALCUL ATING THE ELIGIBLE PROFIT, THERE CANT BE FURTHER ALLOCATION OF PROPORTIONATE EXPENSES IN RESPECT OF EMPLOYEES COST AND ADMINISTRATIVE EXPENSES INCURRED AT HEAD OFFICE AND AT VARIOUS UNIT OFFICES. HOWEVER, THERE IS NOTHING AVA ILABLE ON RECORD IN TERMS OF WORKING OF ELIGIBLE PROFITS AND ACCOUNTING OF EXPEN SES IN RELATION TO ELIGIBLE PROJECTS. FOLLOWING THE DECISION OF THE COORDINATE BENCH REFERRED SUPRA, THE MATTER IS REMANDED BACK TO THE FILE OF THE AO TO EX AMINE THE ABOVE SAID CONTENTIONS OF THE LD AR AND TO SEE WHETHER THE ASS ESSEE HAS MADE PROPER ALLOCATION OF EXPENSES. IN THE RESULT, THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ITA NO. 56/JP/2018 M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. VS. ITO 11 ORDER PRONOUNCED IN THE OPEN COURT ON 17/05/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 17/05/2018. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-6(1) , JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 56/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR