ITO WD 3(1), THANE V. NCC SMC INDU JV, THANE

ITA 7227/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3372 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 04-12-2014
• Court: TRIBUNAL
• Department Lawyers: VINITA MENON
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 7227/M/2014 ( AY 2010 - 2011) ITO, WARD 3(1), R.NO.3, 6TH FLOOR, ASHER IT PARK, ROAD NO.16A, WAGALE INDL ESTATE, THANE (W). / VS. M/S. NCC SMC INDU JV, 101, AKRUTI SMC, LBS MARG, KHOPAT, THANE - 400601. ./ PAN : AAGFN7582H ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SMT. VINITA MENON, DR / RESPONDENT BY : SHRI NEELKANTH KHANDELWAL / DATE OF HEARING : 25.08.2016 / DATE OF PRONOUNCEMENT : 31 .08.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 4.12.2014 IS AGAINST THE ORDER OF THE CIT (A) - 1, MUMBAI DATED 8.8.2014 FOR THE ASSESSMENT YEAR 2010 - 2011. IN THIS APPEAL, REVENUE RAISED THE SOLITARY GROUND WHICH READS AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) - I, THANE HAS NOT APPRECIATED THE FACTS AND DELETED THE ADDITION MADE U/S 80IA(4). 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. NIL AFTER CLAIMING DEDUCTION U/S 80IA(4) OF THE ACT AMOUNTING TO RS. 1,39,98,216/ - . AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT, WHEREIN THE SAID DEDUCTION WAS DISALLOWED AND DETERMINED THE ASSESSED INCOME AT RS. 1,39,98,216/ - . AGGRIEVED, ASSESSEE CARR IED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) GRANTED RELIEF AND DIRECTED THE AO TO ALLOW THE CLAIM. AGGRIEVED WIT H THE SAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUND. 2 4. DURING THE PROCEEDINGS BEFORE THE TRIBUNAL, AT THE OUTSET LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ONLY ISSUE RAISED IN THIS APPEAL RELATES TO THE ALLOWABILITY OF DEDUCTION U/S 80IA(4) OF THE ACT QUA THE ISSUE IF THE ASSESSEE IS A DEVELOPER OR NOT. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT AN IDENTICAL ISSUE CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL IN THE PRECED ING AY 2009 - 2010, VIDE ITA NO.3070/M/2014, DATED 3.2.2016, WHEREIN THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE VIDE PARAS 7 AND 8 OF ITS ORDER. 5. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE AY 2009 - 2010 (SUPRA), WE FIND, PARAS 7 AND 8 OF THE SAID TRIBUNALS ORDER (SUPRA) ARE RELEVANT IN THIS REGARD. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAME ARE EXTRACTED AS U NDER: - 7. WE HAVE CONSIDERED RIVAL CONTENTION AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE ORDER OF THE TRIBUNAL IN THE CASE OF GROUP CONCERNS OF THE ASSESSEE PLACED ON RECORD, AS WELL AS THE ORDER OF HONBLE BOMBAY HIGH C OURT IN THE CASE OF ABG HEAVY INDUSRIES LTD 189 TAXMANN 54. WE FOUND THAT THE CIT (A) HAS DEALT WITH EACH AND EVERY OBJECTION / OBSERVATION OF THE AO AND AFTER RECORDING DUE FINDING REACHED TO THE CONCLUSION THAT THE ASSESSEE WAS ENGAGED IN THE INFRASTRUC TURE PROJECT AND NOT MERELY ACTING AS A CONTRACTOR. THE DETAILED FINDINGS RECORDED BY THE CIT (A) AT PARA 4 AS REPRODUCED ABOVE, HAVE NOT BEEN CONTROVERTED BY DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL ON RECORD. WE ALSO FOUND THAT THE CIT (A) HAD CONS IDERED EACH AND EVERY PROJECT UNDERTAKEN BY THE ASSESSEE AND RECORDED A FINDING TO THE EFFECT THAT THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH THE LOCAL AUTHORITY FOR EXECUTION OF NEW INFRASTRUCTURE FACILITY IE A WATER SUPPLY PROJECT. ALL THE WORKS ST ARTING FROM CONCEPTION TO COMMISSIONING HAVE BEEN TAKEN OVER BY THE APPELLANT IN CONTRADISTINCTION TO THE PART OF WORK WHICH NORMALLY HAPPENS IN A CASE OF WORKS CONTRACT. THE APPELLANT IS ALSO LIABLE FOR FINANCIAL REQUIREMENTS AS IS EVIDENT FROM THE BANK GUARANTEE OFFERED AND INSURANCE COVER OBTAINED. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS RECORDED BY CIT (A) IN REACHING TO THE CONCLUSION THAT ASSESSEE WAS NOT WORKING AS A CONTRACTOR BUT AS A DEVELOPER OF THE INFRASTRUCTURE PR OJECT. WE HAD ALSO GONE THROUGH THE TERMS AND CONDITIONS OF WORK ORDER OF WATER SUPPLY AND DRAINAGE DEPARTMENT, PIMPRI CHINCHWAD CORPORATION, PUNE ALONG WITH DETAILED TENDER NOTICE OF DIRECT PIPELINE FROM PAWANA DAM, AGREEMENT DATED 30 TH APRIL, 2008 BETWE EN PIMPRI CHINCHWAD MUNICIPAL CORPORATION AND NCC - SMC - INDU(JV), AGREEMENT OF JOINT VENTURE DATED 25 TH APRIL, 2008 AND DETAILED TENDER OF DIRECT PIPELINE PROJECT PAWANA DAM. AS PER THE TERMS AND CONDITIONS OF THE WORK ORDER, WE FOUND THAT ASSESSEE HAS WO RKED AS DEVELOPER AND NOT AS A CONTRACTOR. FURTHERMORE, THE TRIBUNAL IN CASE OF GROUP CONCERNS OF THE ASSESSEE SMC INFRASTRUCTURE PVT LTD VIDE ORDER DATED 14.11.2014 HAVE DECIDED THE IN FAVOUR OF THE ASSESSEE......... ....... ........ ........ 8. WE ALSO FOUND THAT IN THE TRIBUNAL IN THE CASE OF NCC - SMC (JV) AND M/S. SMC UNITY (JV), ITA NO.4842/MUM/2006 AND ITA NO.514/MUM/2009, RESPECTFULLY DECIDED THE ISSUE OF 80IA IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 20.6.2014. THE TRIBUNAL IN CASE OF NCC SMC UNIT (JV), ITA NO.7398/MUM/2011, VIDE ORDER DATED 25.6.2014 HAS 3 ALSO DECIDED THE SIMILAR GROUND IN FAVOUR OF THE ASSESSEE. THE H BENCH OF MUMBAI TRIBUNAL IN CASE OF M/S. SMC INFRASTRUCTURE PVT LTD, ITA NO.5503/MUM/2011 HAS ALSO DECIDED THE ISSUE OF DEDUCTIO N U/S 80IA(4) IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THESE ORDERS OF THE TRIBUNAL, WE DO NOT FIND ANY MERIT IN THE ACTION OF THE AO FOR DISALLOWING ASSESSEES CLAIM FOR DEDUCTION U/S 80IA BY WRONGLY OBSERVING THAT ASSESSEE WAS WORKING AS A CONT RACTOR AND NOT AS A DEVELOPER OF THE INFRASTRUCTURE PROJECT. 6. CONSIDERING THE ABOVE SETTLED NATURE OF THE ISSUE AND RESPECT FOLLOWING THE DECISION OF THE TRIBUNAL ON IDENTICAL ISSUE, WE ARE OF THE OPINION, THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND RAISED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONO UNCED IN THE OPEN COURT ON 3 1 S T AUGUST, 2016. S D / - S D / - ( AMIT SHUKLA ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 3 1 .08.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI