M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV), JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE- 4, JAIPUR

ITA 569/JPR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6102 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH
• Keywords: Business expenditure; Rectification of order
• Section: 143(3); 80IA; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B 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. 568/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) B-141, ROAD NO. 9D, VKI AREA, JAIPUR. CUKE VS. THE ITO, WARD 4(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABAK 5143 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 569 & 570/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 & 2014-15 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) B-141, ROAD NO. 9D, VKI AREA, JAIPUR. CUKE VS. THE ACIT, CIRCLE- 4, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABAK 5143 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGRAWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI JAI SINGH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 31/07/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 05/08/2019 VKNS'K@ ORDER ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 2 PER: VIJAY PAL RAO, J.M. THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED A GAINST THREE SEPARATE ORDERS OF THE LD. CIT(A)-2, JAIPUR ALL DAT ED 15.03.2018 FOR THE ASSESSMENT YEARS 2012-13 TO 2014-15. FOR THE ASSESS MENT YEAR 2012- 13 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.9,01,730/- MADE BY LD. AO ON ACCOUNT OF INTEREST ON MOBILIZATI ON ADVANCE BY UPHOLDING THE SAME AS 'MISTAKE APPARENT FROM RECORD '. APPELLANT PRAYS THAT THE FACT OF INCURRENCE OF INTEREST EXPEN DITURE BY ASSESSEE IS NOT IN DISPUTE AND THUS THE ISSUE OF AL LOWABILITY THEREOF IN THE HANDS OF ASSESSEE AT BEST CAN BE TER MED AS 'DEBATABLE' AND IT CANNOT AT ALL BE TREATED AS MIST AKE APPARENT FROM RECORD AND THEREFORE DISALLOWANCE OF INTEREST EXPENSES BY PASSING RECTIFICATION ORDER U/S 154 IS NOT IN ACCOR DANCE WITH LAW AND ORDER SO PASSED IS VOID AB INITIO. 1.1 THAT, THE LD.CIT(A) HAS FURTHER ERRED IN UPHOLD ING THE ACTION OF LD.AO IN MAKING 'REASSESSMENT' IN THE GUISE OF ' RECTIFICATION' BY IGNORING THE FACT THAT INTEREST EXPENDITURE CLAI MED BY ASSESSEE WAS ALLOWED IN THE ASSESSMENT COMPLETED U/S 143(3) AFTER EXAMINING THE FACTS AND MATERIAL AVAILABLE ON RECOR D, THUS THE ORDER SO PASSED U/S 154 DESERVES TO BE HELD BAD IN LAW. WITHOUT PREJUDICE TO ABOVE AND IN THE ALTERNATIVE: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF INTE REST ON ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 3 MOBILIZATION ADVANCE BY LD.AO BY COMPLETELY IGNORIN G THE UNDISPUTED FACT THAT INTEREST OF RS.9,01,730/- WAS ACTUALLY PAID BY THE ASSESSEE AND MERELY BECAUSE THE PRINCIPAL AMOUN T (ON WHICH INTEREST IS PAID) WAS DISBURSED TO SUB CONTRACTOR ( M/S KIRAN INFRA ENGINEERS LTD.) TOWARDS EXECUTION, THE ASSESSEE CAN NOT BE DENIED DEDUCTION OF INTEREST PAID BY IT ON THE GROUND THAT INTEREST SHOULD BE CLAIMED BY SUB CONTRACTOR WHEN THE SAME WAS NEIT HER INCURRED NOR PAID BY SUB CONTRACTOR. APPELLANT PRAYS IMPUGNE D ORDER DESERVES TO BE HELD BAD IN LAW AND CONSEQUENT DISAL LOWANCE DESERVES TO BE DELETED. 2.1 LD. CIT(A) HAS FURTHER ERRED IN NOT APPRECIATIN G THE FACT THAT DEDUCTION U/S 80IA WAS NOT AVAILABLE TO THE SUB-CON TRACTOR ON CONTRACT ACTIVITY, THUS THE SOLE BASIS OF ID. AO OF MAKING DISALLOWANCE OF INTEREST IS CONTRARY TO THE FACT AN D THEREFORE DISALLOWANCE DESERVES TO BE DELETED. 2.2 THAT , LD.CIT(A) HAS FURTHER ERRED IN CONFIRMIN G THE DISALLOWANCE OF RS.9,01,730/- BY IGNORING THE FACT THAT IT ULTIMATELY REMAINS A REVENUE NEUTRAL EXERCISE IN AS MUCH AS IF THE SAME IS NOT ALLOWED TO ASSESSEE, THEN THE SAME SHAL L BE CLAIMED BY AND ALLOWABLE TO THE SUB CONTRACTOR M/S KIRAN IN FRA ENGG. LTD. WHOSE TAXABLE INCOME SHALL REDUCE TO THAT EXTENT MO RE PARTICULARLY WHEN BOTH THE ENTITIES, I.E. THE ASSES SEE AND M/S KIRAN INFRA ENGG. LTD. ARE IN SAME TAX BRACKET OF 3 0%. AND CONTRACT ACTIVITIES UNDERTAKEN BY M/S KIRAN INFRA E NGG. LTD., ARE NOT ELIGIBLE FOR EXEMPTION U/S 80IA, THUS NO USEFUL PURPOSE WOULD BE SERVED IN CLAIMING THE DEDUCTION IN WRONG HANDS. 3. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF APPEAL. ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 4 2. THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE MAD E BY THE AO OF RS. 9,01,730/- ON ACCOUNT OF INTEREST ON MOBILIZATI ON ADVANCE RECEIVED BY THE JOINT VENTURE FROM RAIL VIKAS NIGAM LTD. (IN SHORT RVNL) FOR THE EXECUTION OF WORK AWARDED. THE BRIEF FACTS LEADING TO THE DISPUTE ARE THAT THE ASSESSEE IS AN AOP, WORKS AS JOINT VENTURE BETWEEN M/S KIRAN INFRA ENGINEERS LTD. (IN SHORT KIEL) AND M/S RACHAN A CONSTRUCTION COMPANY. THE ASSESSEE AOP/JOINT VENTURE IS ENGAGED IN THE BUSINESS OF CONTRACT WORK AWARDED BY RVNL. AS PER THE JOINT VEN TURE AGREEMENT BETWEEN THE TWO PARTNERS DATED 31.10.2011 THE PARTI ES AGREED TO DISTRIBUTE THE SHARE AND RESPONSIBILITY BETWEEN THE LEAD PARTNER OF KIEL AND THE OTHER PARTNER OF M/S RACHANA CONSTRUCTION C O. IN THE RATIO OF 80:20. THE LEAD PARTNER OF KIEL TOOK THE RESPONSIBI LITY TO EXECUTE AND COMPLETE PROJECT AS WELL AS ADMINISTRATION, FINANCI AL AND LEGAL DOCUMENTATION RELATED TO THE PROJECT WHEREAS THE OT HER JOINT VENTURE PARTNER TOOK THE RESPONSIBILITY TO PROVIDE TECHNICA L SUPPORT TO THE LEAD PARTNER IN EXECUTION OF EARTH AND BRIDGE WORK. THER EFORE ALL THE EXECUTION WORK OF THE PROJECT AWARDED BY THE RVNL W AS TO CARRIED OUT BY THE KIEL. THE AO WHILE PASSING THE ASSESSMENT OR DER U/S 143(3) ON 22.01.2015 ACCEPTED THE RETURN OF INCOME OF THE ASS ESSEE. SUBSEQUENTLY THE AO ISSUED NOTICE DATED 17.08.2015 U/S 154 OF THE ACT ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 5 TO RECTIFY THE MISTAKE IN RESPECT OF THE CLAIM OF I NTEREST OF RS. 9,01,730/- CLAIMED AND ALLOWED IN THE PROFIT AND LO SS ACCOUNT. THE AO THEN PASSED THE ORDER U/S 154 OF THE ACT WHEREBY TH E SAID INTEREST OF RS. 9,01,730/- WAS DISALLOWED AND INCOME OF THE ASS ESSEE WAS ENHANCED TO RS. 13,73,340/-. THE ASSESSEE CHALLENGE D THE ACTION OF THE AO BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE CLAIM OF INTEREST ON MOBILIZATION FUNDS RECEIVED FR OM RVNL IS DEBATABLE ISSUE AND DOES NOT FALL IN THE AMBIT OF MISTAKE AP PARENT ON RECORD. HE HAS FURTHER CONTENDED THAT THE EXPENDITURE INCURRED ON ACCOUNT OF INTEREST PAID RVNL IS NOT IN DISPUTE THEN THE ISSUE OF ALLOWABILITY OF THE SAME CANNOT BE TREATED AS MISTAKE APPARENT ON RECOR D WHICH CAN BE RECTIFIED U/S 154 OF THE ACT. THE LD. AR HAS FURTHE R CONTENDED THAT SINCE THE ENTIRE WORK WAS TO BE EXECUTED BY KIEL AND ALSO TO DEAL WITH FINANCIAL AND ADMINISTRATION MATTER THEREFORE, THE SAID FUND WAS HANDED OVER TO THE SAID LEAD PARTNER OF THE JOINT VENTURE TO BE USED FOR EXECUTION OF THE WORK OF THE JOINT VENTURE. ONCE TH E SAID MOBILIZATION ADVANCE RECEIVED FROM THE RVNL WAS UTILIZED FOR EXE CUTION OF THE WORK AWARDED THEN THE INTEREST ON THE SAID ADVANCE IS AN ALLOWABLE EXPENDITURE OF THE ASSESSEE AOP. IN SUPPORT OF HIS CONTENTION, HE HAS ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 6 RELIED UPON THE DECISION OF HONBLE SUPREME COURT I N CASE OF T.S. BALARAM, ITO VS. M/S VALKART BROTHERS 82 ITR 50 (SC ) AND SUBMITTED THAT THE HONBLE SUPREME COURT HAS HELD T HAT A MISTAKE APPARENT ON RECORD MUST BE AN OBVIOUS AND PATENT MI STAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTA KE APPARENT FROM THE RECORD. THUS, THE LD. AR HAS SUBMITTED THAT THE ISS UE OF ALLOWABILITY OF INTEREST IS BEYOND THE SCOPE OF RECTIFICATION OF MI STAKE APPARENT ON RECORD U/S 154 OF THE ACT. HENCE, THE IMPUGNED ORDE R PASSED BY THE AO IS BEYOND THE JURISDICTION AND LIABLE TO BE QUASHED . 3.1. ON MERITS:- THE LD. AR HAS SUBMITTED THAT AS PER THE AGREEMENT THE PARTNER THE JOINT VENTURE AGREEMENT THE EXPENDITURE IN RESP ECT OF EXECUTION OF THE CONTRACT WORK HAS TO BE INCURRED FROM THE AMOUN T RECEIVED AS MOBILIZATION ADVANCE FROM RVNL. THEREFORE THE SAID FUND WAS HANDED OVER TO THE LEAD PARTNER WHO HAS TOOK THE RESPONSIB ILITY OF EXECUTION OF THE WORK AND TO INCUR ALL THE EXPENDITURE IN RESPEC T OF EXECUTION OF THE CONTRACT WORK. THE INTEREST PAID TO RVNL IS ALLOWAB LE BUSINESS EXPENDITURE AS THE SAID AMOUNT WAS GIVEN ONLY FOR E XECUTION OF THE ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 7 CONTRACT WORK AWARDED AND WAS ACTUAL UTILIZED FOR E XECUTION OF THE WORK THEREFORE, IT IS ALLOWABLE BUSINESS EXPENDITURE. TH E LD. AR HAS FURTHER SUBMITTED THAT KIEL HAS BEEN REGULARLY ASSESSED TO TAX AND IS PAYING TAX @ 30% OF THE PROFIT DECLARED INCLUDING THE PROF IT EARNED ON THE WORK SUB-CONTRACTED BY THE ASSESSEE. HE HAS POINTED OUT THAT THE DEDUCTION CLAIMED U/S 80IA OF THE ACT BY THE KIEL I S ONLY IN RESPECT WIND MILL PLANT AND THEREFORE, NO SUCH DEDUCTION WA S CLAIMED IN RESPECT OF CONTRACT INCOME. THUS, THE CONTRACT INCOME OF KI EL IS ALSO SUBJECTED TO THE HIGHEST RATE OF TAX AND THERE IS NOT REVENUE EFFECT EVEN IF THE SAID AMOUNT OF INTEREST IS ALLOWED IN THE HAND OF T HE KIEL. HE HAS REFERRED TO THE RETURN OF INCOME FILED BY THE KIEL IN SUPPORT OF HIS CONTENTION THAT THE KIEL HAS ALSO PAID TAX @ MAXIMU M MARGINAL RATE. THE LD. AR HAS SUBMITTED THAT EVEN ON MERITS THIS I NTEREST EXPENDITURE IS ALLOWABLE IN THE HAND OF THE ASSESSEE AOP WHEN E XPENDITURE IS INCURRED FOR THE BUSINESS OF THE AOP. 4. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THAT THE ASSESSING OFFICER HAS GIVEN THE REASONS IN THE NOTICE ISSUED U/S 154/155 AND POINTED THAT THE MOBILIZATION ADVANCED RECEIVED FRO M THE RVNL WAS DISBURSED TO LEAD PARTNER NAMELY KIEL AND THEREFORE , THE INTEREST ON THE SAID AMOUNT PAID TO RVNL CAN BE CLAIMED ONLY IN THE HAND OF KIEL ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 8 AND NOT ALLOWABLE DEDUCTION IN THE HAND OF THE ASSE SSEE AOP. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AO IS JUSTIFIED IN PASSING THE RECTIFICATION ORDER U/S 154 OF THE ACT. 4.1 ON MERITS THE LD. DR HAS SUBMITTED THAT SINCE T HIS AMOUNT OF MOBILIZATION ADVANCE WAS DISBURSED TO THE LEADING P ARTNER M/S KIEL AND REMAINED WITH THE SAID PARTNER THEREFORE, THE INTER EST IN RESPECT OF THE SAID AMOUNT CANNOT BE ALLOWED IN THE HAND OF THE AS SESSEE. THOUGH THE SAID PARTNER AS NOT CLAIMED THE SAID EXPENDITURE AG AINST THE INCOME TO ENJOY THE BENEFIT OF DEDUCTION U/S 80IA OF THE ACT. HE HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE FIRST OBJECTION OF THE ASSE SSEE AGAINST THE ORDER PASSED U/S 154 OF THE ACT BY THE AO IS THAT THE SAI D ORDER IS BEYOND THE SCOPE OF RECTIFICATION OF MISTAKE APPARENT ON RECOR D. THE LD. AR HAS RELIED UPON THE DECISIONS ON THIS POINT AND CONTEND ED THAT THE CLAIM OF INTEREST PROPOSED TO DISALLOW BY THE AO WHILE PASSI NG THE ORDER U/S 154 IS DEBATABLE ISSUE. THERE IS NO DISPUTE THAT THE SC OPE OF RECTIFICATION U/S 154 OF THE ACT IS VERY LIMITED AND CIRCUMSCRIBED ON LY TO RECTIFY THE MISTAKE APPARENT ON RECORD WHICH DOES NOT REQUIRE A NY LONG DRAWN PROCESS OF REASONING ON THE ISSUE WHICH MAY HAVE TW O VIEWS. THUS ONLY ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 9 THE MISTAKE APPARENT ON RECORD WHICH IS OBVIOUS AND PATENT CAN BE RECTIFIED IN THE PROCEEDINGS U/S 154 OF THE ACT. IN THE CASE IN HAND THE AO HAS GIVEN THE REASONING RUNNING INTO 3 PAGES FOR DISALLOWANCE OF THE CLAIM OF INTEREST IN RESPECT OF MOBILIZATION ADVANC E RECEIVED FROM RVNL IN RESPECT OF THE CONTRACT WORK AWARDED TO THE JOIN T VENTURE. WE HAVE ALREADY DISCUSSED THE FACTS THAT AS PER THE JOINT V ENTURE AGREEMENT THE LEAD PARTNER M/S KIEL TOOK THE RESPONSIBILITY OF EX ECUTION OF THE WORK UNDER THE CONTRACT AND ALSO THE RESPONSIBILITY OF F INANCIAL AND ADMINISTRATIVE AFFAIR FOR EXECUTION OF THE WORK. TH E SECOND PARTNER OF THE JOINT VENTURE NAMELY M/S RACHANA CONSTRUCTION C OMPANY TOOK THE RESPONSIBILITY TO PROVIDE TECHNICAL SUPPORT TO LEAD PARTNER FOR EXECUTION OF EARTH AND BRIDGE. THEREFORE, THE SECOND PARTNER HAD TO PROVIDE ONLY TECHNICAL SUPPORT IN RESPECT OF EXECUTION OF WORK O F EARTH AND BRIDGE. THUS, THE AO WHILE PASSING THE ORDER U/S 154 HAS TA KEN A DECISION ON THE ALLOWABILITY OF CLAIM OF INTEREST AND THEREFORE IT IS NOT A CASE OF APPARENT OBVIOUS AND PATENT MISTAKE ON RECORD WHICH CAN BE RECTIFIED WITHIN THE AMBIT OF SECTION 154 OF THE ACT. THE HON BLE SUPREME COURT IN CASE OF T.S. BALARAM, ITO VS. M/S VALKART BROTHE RS (SUPRA) HAS OBSERVED ON THE POINT OF SCOPE OF RECTIFICATION OF MISTAKE U/S 154 AS UNDER:- ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 10 4. FROM WHAT HAS BEEN SAID ABOVE, IT IS CLEAR THAT TH E QUESTION WHETHER S. 17(1) OF THE INDIAN IT ACT, 1922, WAS AP PLICABLE TO THE CASE OF THE FIRST RESPONDENT IS NOT FREE FROM DOUBT. THE REFORE, THE ITO WAS NOT JUSTIFIED IN THINKING THAT ON THAT QUESTION THE RE CAN BE NO TWO OPINIONS. IT WAS NOT OPEN TO THE ITO TO GO INTO THE TRUE SCOPE OF THE RELEVANT PROVISIONS OF THE ACT IN A PROCEEDINGS UND ER S. 154 OF THE IT ACT, 1961. A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTAB LISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. AS SEEN EARLIER, THE HIGH COURT OF BOMBAY OPINED THAT THE ORIGINAL ASSESSMENTS WERE IN ACCORDANCE WITH LA W THOUGH IN OUR OPINION THE HIGH COURT WAS NOT JUSTIFIED IN GOING I NTO THAT QUESTION. IN SATYANARAYAN LAXMINARAYAN HEGDE VS. MALLIKARJUN BHA VANAPPA TIRUMALE (1960) 1 SCR 890, THIS COURT WHILE SPELLIN G OUT THE SCOPE OF THE POWER OF A HIGH COURT UNDER ART. 226 OF THE CON STITUTION RULED THAT AN ERROR WHICH HAS TO BE ESTABLISHED BY A LONG-DRAW N PROCESS OF REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS CANNOT BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. A DECISION ON DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD [SEE SIDHRAMAPPA ANDANNAPPA MANVI VS. CIT (1 952) 21 ITR 333 (BOM) : TC 8R.1234]. THE POWER OF THE OFFICERS MENT IONED IN S. 154 OF THE IT ACT, 1961, TO CORRECT 'ANY MISTAKE APPARENT FROM THE RECORD' IS UNDOUBTEDLY NOT MORE THAN THAT OF THE HIGH COURT TO ENTERTAIN A WRIT PETITION ON THE BASIS OF AN 'ERROR APPARENT ON THE FACE OF THE RECORD.' IN THIS CASE IT IS NOT NECESSARY FOR US TO SPELL OUT T HE DISTINCTION BETWEEN THE EXPRESSION 'ERROR APPARENT ON THE FACE OF THE R ECORD' AND 'MISTAKE APPARENT FROM THE RECORD'. BUT SUFFICE IT TO SAY TH AT THE ITO WAS WHOLLY WRONG IN HOLDING THAT THERE WAS A MISTAKE APPARENT FROM THE RECORD OF THE ASSESSMENTS OF THE FIRST RESPONDENT. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE ISSUE OF ALLOWABILITY OF THE CLAIM OF INTEREST PAID TO RV NL IS A DEBATABLE ISSUE ON WHICH A DECISION IS REQUIRED ON THE BASIS OF THE RELEVANT FACTS OF THE ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 11 CASE THEN IT IS NOT AN APPARENT MISTAKE ON RECORD W HICH IS OBVIOUS AND PATENT THAT CAN BE RECTIFIED WITHOUT THE PROCESS OF LONG DRAWN REASONING. ACCORDINGLY, WE HOLD THAT THE ORDER PASS ED BY THE AO U/S 154 OF THE ACT DATED 29.12.2015 IS BEYOND THE SCOPE AND JURISDICTION OF THE AO AND CONSEQUENTLY THE SAME IS LIABLE TO BE QU ASHED. 5.1 ON MERITS:- WE FIND THAT THE AO HAS NOT DISPUTED THAT THE SAID INTEREST OF RS. 9,01,730/- WAS PAID BY THE ASSESSEE TO THE RVNL IN RESPECT OF MOBILIZATION ADVANCE RECEIVED FOR EXECUTION OF THE WORK AWARDED BY THE RVNL. IT IS ALSO NOT IN DISPUTE THAT THE WORK WAS A WARDED BY THE RVNL TO THE ASSESSEE AOP AND AS PER THE JOINT VENTURE AG REEMENT THE LEAD PARTNER M/S KIRAN INFRA ENGINEERS LTD. HAD TO EXECU TE THE WORK ON THE GROUND WHEREAS THE SECOND PARTNER I.E. M/S RACHANA CONSTRUCTION COMPANY HAD TO PROVIDE TECHNICAL SUPPORT SERVICE TO THE LEAD PARTNER FOR EXECUTION OF SPECIFIC WORK OF EARTH AND BRIDGE. THEREFORE, THE LEAD PARTNER KIEL HAD TO INCUR ALL THE EXPENDITURE IN EX ECUTION OF THE WORK ON BEHALF OF THE ASSESSEE JOINT VENTURE. IT IS NOTE D FROM THE FINANCIAL STATEMENT OF THE ASSESSEE JOINT VENTURE THAT OUT OF THE TOTAL AMOUNT OF RS. 4.32 CRORES DISBURSED TO KIEL A SUM OF RS. 2.4 CRORES WAS INCURRED DURING THE YEAR UNDER CONSIDERATION IN RESPECT OF E XECUTION OF THE WORK. ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 12 IT IS PERTINENT TO NOTE THAT THE INTEREST OF RS. 9, 01,730/- WAS PAID ON THE ENTIRE AMOUNT OF MOBILIZATION ADVANCE OF RS. 4. 42 CRORES OUT OF WHICH THE DISBURSEMENT WAS MADE TO KIEL OF RS. 4.32 CORES. THUS THE AMOUNT WHICH WAS DISBURSED TO KIEL WAS UTILIZED FOR EXECUTION OF THE WORK. HENCE, THE AMOUNT WHICH WAS UTILIZED BY THE K IEL FOR EXECUTION OF THE WORK OF THE ASSESSEE JOINT VENTURE CANNOT BE CONSIDERED AS UTILIZED FROM THE BUSINESS OF M/S KIEL. FURTHER, TH E AO HAS NOT DISPUTED THE FACT THAT THE SAID AMOUNT WAS RECEIVED AS MOBIL IZATION ADVANCE ONLY FOR THE EXECUTION OF WORK CONTRACT IN QUESTION AND M/S KIEL THE LEAD PARTNER RESPONSIBLE FOR THE EXECUTION OF THE WORK A ND INCURRING ALL THE EXPENDITURE ON BEHALF OF THE JOINT VENTURE HAS ACTU ALLY INCURRED THE EXPENDITURE AND UTILIZED THE SAID AMOUNT ONLY FOR E XECUTION OF THE WORK UNDER THE JOINT VENTURE. ONCE THE SAID AMOUNT WAS N OT UTILIZED BY M/S KIEL OTHERWISE THAN THE EXECUTION OF THE CONTRACT W ORK OF THE ASSESSEE JOINT VENTURE THEN THE INTEREST PAID ON THE MOBILIZ ATION ADVANCE IS AN ALLOWABLE EXPENDITURE IN THE HAND OF THE JOINT VENT URE. IT IS ALSO NOT DISPUTED THAT KIEL IS ALSO PAYING TAX @ 30% THOUGH THE AO POINTED OUT THAT THE SAID INTEREST WAS NOT CLAIMED BY THE KIEL TO MAXIMIZE THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT. WE FIND TH AT THE CONTRACT WORK RECEIVED BY THE KIEL ARE NOT ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 13 AND ONLY THE WIND MILL POWER GENERATION WAS ELIGIB LE U/S 80IA OF THE ACT. THUS, THE SAID REASONING OF THE AO IS CONTRARY TO THE FACTS WHILE DISALLOWING THE CLAIM OF INTEREST. HENCE, IN VIEW O F THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE WE HOLD THAT EVEN ON MERI TS THE CLAIM OF THE INTEREST ON PAID TO RVNL ON MOBILIZATION ADVANCE IS ALLOWABLE EXPENDITURE OF THE ASSESSEE JOINT VENTURE. 6. FOR THE ASSESSMENT YEARS 2013-14 AND 2014-15, TH E ASSESSEE HAS RAISED COMMON GROUNDS ON DISALLOWANCE OF INTEREST P AID TO RVNL AGAINST THE MOBILIZATION ADVANCE RECEIVED THEREFORE , THE SOLITARY ISSUE FOR BOTH THE ASSESSMENT YEARS IS COMMON TO THE ISSU E ON MERITS FOR THE ASSESSMENT YEAR 2012-13. IN VIEW OF OUR FINDING ON THE MERIT OF THE ISSUE FOR THE ASSESSMENT YEAR 2012-13 THE CLAIM OF INTEREST IS ALLOWED AND ADDITION MADE BY THE AO FOR THE ASSESSMENT YEAR S 2013-14 AND 2014-15 ARE DELETED. IN THE RESULT, THESE THREE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/08/2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 05/08/2019. ITA NO. 568 TO 570/JP/2018 M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV) VS. ITO /ACIT 14 * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-A- M/S KIRAN INFRA ENGINEERS LTD. RACHANA (JV), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 4(2), JAIPUR ACIT, CIRCLE-4, 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. 568 TO 570/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR