Sugam Construction Pvt.Ltd., Ahmedabad V. The ACIT.,(OSD)Circle-8, Ahmedabad

ITA 968/AHD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8474 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: P M MEHTA
• Keywords: Fair market value; Bad and doubtful debts
• Section: 43B; 143(3); 80G; 12AA; 6

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 968/AHD/2013 / ASSESSMENT YEAR : 2009-10 M/S. SUGAM CONSTRUCTION PRIVATE LIMITED, 4 TH FLOOR, ARUN COMPLEX, OPP. C.U. SHAH COLLAGE, ASHRAM ROAD, AHMEDABAD-09 PAN : AACCS 6759 H VS ACIT (OSD), CIRCLE 8, AHMEDABAD ./ ITA NO. 1612/AHD/2013 / ASSESSMENT YEAR : 2009-10 ACIT (OSD), CIRCLE 8, AHMEDABAD VS M/S. SUGAM CONSTRUCTION PRIVATE LIMITED, PAN : AACCS 6759 H / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.M . MEHTA, AR REVENUE BY : SHRI R. P. MAURYA, SR. DR / DATE OF HEARING : 11/09/2017 / DATE OF PRONOUNCEMENT: 18/09/2017 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER:- THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S)-XIV, AHMEDABAD DATED 26.03.2013 FOR ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS IN ITS APPEAL VIDE ITA NO.968/AHD/2013:- 1. THE ORDER PASSED BY THE LEARNED AO IS AGAINST THE LA W, EQUITY AND JUSTICE. 2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN UPHOLD ING THE DISALLOWANCE MADE BY THE LD. AO OF INTEREST EXPENSES CONSIDERING AS EXCESSIVE PAYMENT TO THE PERSONS SPECIFIED U/S 40A(2)(B) OF THE ACT OF R S.15,65,236/-. ITA NOS. 968 & 1612/AHD/2013 ASSESSEE & REVENUE - SUGAM CONSTRUCITON PVT LTD AY : 2009-10 2 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE DISALLOWANCE MADE BY THE LD. AO OF CAR HIRE CHARGES OF RS.1,02,000/- U/S 40A(IA) OF THE ACT. 3. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN ITS APPEAL VIDE ITA NO. 1612/AHD/2013:- 1. (A) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS TO HOLD THAT ASSESSEE WAS 'DEVELOP & BUILDER' ELIGIBLE TO CLAIM DEDUCTION U/S.80IA(4) OF THE ACT. (B) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS TO IGNORE THAT ASSESSEE W AS ESSENTIALLY ENGAGED IN ONLY EXECUTION OF 'PROJECTS' ENVISAGED BY VARIOU S CENTRAL & STATE GOVERNMENT AGENCIES/ DEPARTMENT AND HENCE, SQUARELY IN THE NATURE 'WORKS CONTRACT', AS LAID DOWN IN EXPLANATION TO PR OVISION OF SECTION 80IA(4) INSERTED VIDE FINANCE ACT 2009 W.E.F. 01.04.20 00. (C) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS TO IGNORE THAT ASSESSEE WA S RAISING RA BILLS ON VARIOUS CENTRAL/STATE GOVERNMENT AGENCIES/ DEPARTME NT IN RESPECT OF CONTRACTS UNDER CONSIDERATION WHICH CLEARLY ESTABLI SHED THAT ASSESSEE WAS MERELY 'EXECUTOR' AND NOT DEVELOPER OF THE PROJECTS . 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, A HMEDABAD HAS ERRED IN LAW AND ON FACTS TO ALLOW DEDUCTION U/S. 8 0G OF THE ACT @RS.2,50,000/- AS AGAINST RS.1,46,458/- COMPUTED BY ASSESSEE ITSELF DURING ASSESSMENT PROCEEDINGS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. C OMMISSIONER OF INCOME- TAX (APPEALS)-XIV, AHMEDABAD MAY BE SET-A-SIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 4. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION & D EVELOPMENT OF UNDER- BRIDGES, CANALS ETC. FOR THE YEAR UNDER CONSIDERAT ION, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.21,45 ,917/- AFTER CLAIMING DEDUCTION OF RS.52,45,490/- U/S 80-IA OF THE INCOME -TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE CASE OF THE ASSESSEE WAS PICKED ITA NOS. 968 & 1612/AHD/2013 ASSESSEE & REVENUE - SUGAM CONSTRUCITON PVT LTD AY : 2009-10 3 UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S. 143(3) OF THE ACT WAS FRAMED VIDE ORDER DATED 05.12.2011. WHILE FRAMING T HE ASSESSMENT, THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.98,61,410/- BY MAKING VARIOUS ADDITIONS/DISALLOWANCES AS UNDER: - TOTAL INCOME AS PER RETURN OF INCOME - RS.2145917/ - 1. DISALLOWANCE U/S 43B - RS. 245237/- 2. DISALLOWANCE OF INTEREST U/S 40A(2)(B) - RS.1565236 /- OF THE ACT 3. DISALLOWANCE OF DONATION - RS. 538001/- 4. DISALLOWANCE OF INTEREST ON TDS, FBT, - RS. 1952 9/- SERVICE TAX ETC. 5. DISALLOWANCE OF CAR HIRE CHARGES - RS. 102000/- U/S 40A(IA) OF THE ACT 6. DISALLOWANCE OF CLAIM FOR DEDUCTION - RS.5245490/ - U/S 80IA RS.9861410/- 5. AGGRIEVED BY THE ORDER OF THE LD. ASSESSING OFFI CER, ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A), WHO HAS GIVEN PARTIAL RELIEF TO THE ASSESSEE; HOWEVER, CONFIRMED THE ADDITIONS MADE BY THE ASSESS ING OFFICER U/S 40A(2)(B) OF THE ACT OF RS.15,65,236/- AND DISALLOW ANCE OF CAR HIRE CHARGES OF RS.1,02,000/- U/S 40(A)(IA) OF THE ACT AND DELET ED THE REST OF THE ADDITIONS / DISALLOWANCES MADE BY THE LD. ASSESSING OFFICER. 6. AGGRIEVED, BOTH THE ASSESSEE AND THE REVENUE ARE IN APPEAL BEFORE US. ASSESSEE BEING AGGRIEVED BY THE ORDER OF THE LD. CI T(A) IN CONFIRMING THE ADDITIONS MADE BY THE LD. ASSESSING OFFICER WHILE T HE REVENUE IS AGGRIEVED BY THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDI TIONS MADE BY THE LD. ASSESSING OFFICER. 7. FIRST GROUND RAISED BY THE ASSESSEE IS AGAINST T HE ORDER OF THE LD. CIT(A) IN UPHOLDING THE DISALLOWANCE MADE BY THE LD . ASSESSING OFFICER U/S 40A(2)(B) OF THE ACT OF RS.15,65,236/-. ITA NOS. 968 & 1612/AHD/2013 ASSESSEE & REVENUE - SUGAM CONSTRUCITON PVT LTD AY : 2009-10 4 7.1 THE BRIEF FACTS OF THE CASE IN THIS REGARD ARE THAT DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE HAS SUBMITTED THAT THE AS SESSEE-COMPANY HAD ENTERED INTO AGREEMENTS FOR DEVELOPMENT OF INFRASTR UCTURE WITH VARIOUS GOVERNMENT BODIES SUCH AS AUDA, AMC, INDIAN RAILWAY S ETC ASSESSEE- COMPANY WAS AWARDED VARIOUS CONTRACTS FOR CONSTRUCT ION OF UNDER BRIDGES. ALL SUCH CONTRACTS ARE REQUIRED TO BE COMPLETED WIT HIN THE TIME LIMIT STIPULATED AND IN CASE OF DELAY OR DEFAULT TO COMPL ETE WORK IN STIPULATED TIME LIMIT, THERE ARE TERMS IN THE CONTRACTS FOR LE VY OF PENALTY FOR DELAY IN EXECUTION OF WORK. IT WAS COSTLY AFFAIRS TO ASSESSE E-COMPANY TO PAY FOR DEFAULT FOR EXECUTION OF WORKS FOR WHICH IT HAD TO INCUR PENALTY, WHICH ULTIMATELY PUT ASSESSEE-COMPANY IN BLACKLIST BY THE VARIOUS GOVT. DEPARTMENT, WHICH, RESULTED INTO MAKE THE SITUATION DIFFICULT TO THE APPELLANT TO GET ANY NEW CONTRACTS. THE ASSESSEE-CO MPANY HAD CASH CREDIT FACILITIES OF RS. 50. 00 LACS AND BANK GUARANTEE FA CILITIES OF RS. 225.00 LACS WERE FROZEN BY THE BANKERS OF THE APPELLANT COMPANY I. E. STATE BANK OF INDIA W.E.F. 12-04-2008. THEREFORE, THE ASSESSEE-CO MPANY PUT INTO HEAVY FINANCIAL CRISIS. DUE TO SUDDEN FREEZE OF CREDIT FA CILITY, THE ASSESSEE- COMPANY PUT INTO ACTUATE FINANCIAL CRISIS. AS NUMBE RS OF LITIGATIONS WERE GOING ON AGAINST THE APPELLANT COMPANY, NO ONE WAS READY IN THE MARKET TO PROVIDE THE FINANCE TO THE COMPANY CONSIDERING UNCE RTAINTY OF REPAYMENT OF LOANS. SINCE IT WAS DIFFICULT TO RUN THE BUSINES S IN ABSENCE OF REQUISITE FINANCE, THE ASSESSEE-COMPANY HAS OFFERED HIGHER RA TE OF INTEREST. SOME OF THE SHARE HOLDERS HAVING MINORITY INTEREST IN THE C OMPANY HAD AGREED TO PROVIDE LOAN TO THE ASSESSEE-COMPANY AFTER TAKING H IGH RISK OF BAD DEBTS. FOR TAKING SUCH HUGE RISK, SHAREHOLDERS HAVE CHARGE D SOME HIGHER INTEREST. THERE WERE DISPUTES AMONGST THE MANAGEMENT OF THE C OMPANY AND VARIOUS PARTIES HAVE ISSUED NOTICES FOR WINDING UP OF THE C OMPANY. UNDER THESE CIRCUMSTANCES, ASSESSEE-COMPANY HAS BORROWED THE MO NEY AT THE HIGHER RATE OF INTEREST. ITA NOS. 968 & 1612/AHD/2013 ASSESSEE & REVENUE - SUGAM CONSTRUCITON PVT LTD AY : 2009-10 5 7.2 ASSESSEE-COMPANY HAS PAID INTEREST TO COMPANIES WHICH WERE IN THE TAX SLABS OF 30.90%, WHILE COMPANY HAD NOT LIABLE T O TAX, BUT HAVE TO PAY MAT LIABILITY @18.54% WHICH ULTIMATELY ADJUSTED AGA INST TAX LIABILITIES OF SUBSEQUENT YEARS. SO, THERE ARE NO OTHER BENEFITS T O ASSESSEE TO MAKE PAYMENT AT HIGHER RATE OF INTEREST TO LENDERS TO AV OID OR REDUCE ANY TAX LIABILITY. CONSIDERING THE FINANCIAL SITUATION, VAR IOUS LITIGATIONS AGAINST THE ASSESSEECOMPANY AND TO COMPLETE THE ONGOING PROJEC TS IN TIME TO AVOID HEAVY PENALTY AND RISK OF BLACK LISTED AS DEFAULTER IN VARIOUS DEPARTMENT OF GOVERNMENT, WHICH WOULD NOT ABLE TO GET ANY CONTRAC T IN FUTURE, GOVERNMENT CIRCUMSTANCES OF THE ASSESSEE-COMPANY TH ERE WAS NO OTHER OPTION BUT TO BORROW THE MONEY AT HIGHER RATE. THE ASSESSEE HAS MADE INTEREST PAYMENT TO VARIOUS PERSONS, THE TAX LIABIL ITIES OF THOSE ARE AS UNDER:- SR. NO. NAME OF DEPOSITORS TAX (1) NIKOLIAN SECURITY AND FINANCE PRIVATE LIMITED 30.90% (2) TITAN TECHNOLOGIES PVT. LIMITED 30.90% (3) NICOLIAN INC. 30.90% (4) BHAILALBHAI B. PATEL 20.00% WHILST ASSESSEE-COMPANY WAS TAXED @ 18.54% UNDER TH E MAT WHICH IS AVAILABLE FOR SET OFF IN SUCCEEDING YEARS. IT W AS NOT THE CASE OF THE REVENUE THAT THERE IS ANY COLORFUL DEVICES TO AVOID THE TAX OR REDUCE THE TAX BURDEN. THE LD. A.O. HAS ALSO NOT ALLEGED THAT EXPENDITURE IS NOT INCURRED FOR THE PURPOSE OF BUSINESS. ASSESSEE HAS SUBMITTED DETAILE D REPLY DATED 19.08.2011 TO THE LD. A.O. EXPLAINING THE JUSTIFICATION OF PAY MENT OF INTEREST WITH COMPLETE CHART OF INTEREST ACCOUNT OF THE RELATED P ARTIES. LD. COUNSEL FOR THE ASSESSEE ALSO DRAW OUR ATTENTION THAT THE LD. AO HA S ERRED IN CONSIDERING THE COMPANY AS RELATIVE U/S 40A(2)(B) OF THE ACT. ITA NOS. 968 & 1612/AHD/2013 ASSESSEE & REVENUE - SUGAM CONSTRUCITON PVT LTD AY : 2009-10 6 SEC. 40(A)(2) READ AS UNDER: (1) THE PROVISIONS OF THIS SECTION SHALL HAVE EFFECT NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER PROVISION OF THIS ACT RELATING TO THE COMPUTATION OF INCOME UNDER THE HEAD 'PROFITS AND G AINS OF BUSINESS OR PROFESSION'. (2) (A) WHERE THE ASSESSES INCURS ANY EXPENDITURE IN RESPECT OF WHICH PAYMENT HAS BEEN OR IS TO BE MADE TO ANY PERSON REF ERRED TO IN CLAUSE (B) OF THIS SUB-SECTION, AND THE ASSESSING OFFICER IS OF OP INION THAT SUCH EXPENDITURE IS EXCESSIVE OR UNREASONABLE HAVING REG ARD TO THE FAIR MARKET VALUE OF THE GOODS, SERVICES OR FACILITIES FOR WHIC H THE PAYMENT IS MADE OR THE LEGITIMATE NEEDS OF THE BUSINESS OR PROFESSION OF T HE ASSESSEE OR THE BENEFIT DERIVED BY OR ACCRUING TO HIM THEREFROM, SO MUCH OF THE EXPENDITURE AS IS SO CONSIDERED BY HIM TO BE EXCESSIVE OR UNREASONABLE S HALL NOT BE ALLOWED AS A DEDUCTION. (B) THE PERSONS REFERRED TO IN CLAUSE (A) ARE THE FOL LOWING, NAMELY : (I) WHERE THE ASSESSEE IS AN INDIVIDUAL ANY RELATIVE O F THE ASSESSEE (II) WHERE THE ASSESSEE IS A COMPANY, ANY DIRECTOR OF THE COMPANY, FIRM, ASSOCIATION OF PERSONS OR HINDU PARTNER OF TH E FIRM, OR MEMBER UN-DIVIDED FAMILY OF THE ASSOCIATION OR FAMILY, OR ANY RELATIVE OF SUCH DIRECTOR PARTNER OR MEMBER; 7.3 LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THA T FROM THE READING OF ABOVE REFERRED SECTION, IT IS CRYSTAL CLEAR THAT IN THE CASE OF COMPANY, PAYMENT TO DIRECTOR OF THE COMPANY OR ANY RELATIVE OF DIRECTOR WOULD COVER AND IN THE CASE OF ASSESSEE-COMPANY, THE PAYMENT WA S MADE TO THE COMPANIES WHICH HAD NO SUBSTANTIAL INTEREST IN THE COMPANY AND THEREBY, THERE WAS NO LOSS ON THE PART OF THE REVENUE AS ALL THE AFORESAID ASSESSEES PAID TAX ON INTEREST RECEIPT @ 30.90%. LD. COUNSE L FOR THE ASSESSEE ALSO SUBMITTED THAT IT IS WELL SETTLED PRINCIPLE THAT TH E TAX AUTHORITIES HAS NOT TO SEE TRANSACTIONS FROM THEIR POINT OF VIEW, BUT THAT OF A PRUDENT BUSINESS MAN. SO, THE ASSESSEE-COMPANY HAS PAID INTEREST CON SIDERING THE UNCERTAINTY OF REPAYMENT OF INTEREST AND PRINCIPAL AMOUNT, UNAV AILABILITY OF BANK FINANCE ETC ITA NOS. 968 & 1612/AHD/2013 ASSESSEE & REVENUE - SUGAM CONSTRUCITON PVT LTD AY : 2009-10 7 7.4 WE HAVE GONE THROUGH THE RECORD AND IMPUGNED OR DER. WHEN LD AR WAS ASKED THAT COMPANY OUGHT TO HAVE TAKEN LOAN FRO M THE BANK AT LOWER RATE OF INTEREST THEN WHY COMPANY HAS PAID THIS MUC H OF HIGH INTEREST TO THE PERSON SPECIFIED U/S.40A(2)(B) OF THE ACT. IN REPLY LEARNED AR STATED THAT NO BANK HAS GIVEN THEM LOAN WHEN BENCH SPECIFICALLY AS KED WHETHER HE HAS ANY DOCUMENTARY PROVE IN SUPPORT OF HIS CONTENTION SUCH AS REFUSAL LETTER FROM THE BANK FOR GRANT OF LOAN. HE STATED THAT HE DOES NOT HAVE ANY SUCH DOCUMENT. THEREFORE, IN THE ABSENCE OF ANY CONCRETE PROOF WE DO NOT FIND ANY FORCE IN THE ARGUMENTS OF THE LD. AR. SO IN THE SE CIRCUMSTANCES, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED 8. SO FAR AS SECOND GROUND OF ASSESSEES APPEAL REL ATING TO DISALLOWANCE OF CAR HIRE CHARGES OF RS.1,02,000/- U/S 40(A)(IA) OF THE ACT IS CONCERNED, THE ASSESSEE HAS BEEN FAILED TO SUBMIT ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE ITS CLAIM EITHER BEFORE THE LOWER AUTH ORITIES OR EVEN BEFORE US. THEREFORE, WE ARE NOT INCLINED TO INTERFERE WITH TH E ORDER PASSED BY THE LD. CIT(A) IN THIS BEHALF REGARDING THE DISALLOWANCE OF CAR-HIRE CHARGES AMOUNTING TO RS.1,02,000/- U/S 40(A)(IA) OF THE ACT . ACCORDINGLY THE SECOND GROUND OF ASSESSEES APPEAL IS THEREFORE DISMISSED. 9. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. 10. NOW, WE COME TO REVENUES APPEAL. THE SUBSTANT IVE GRIEVANCE OF REVENUES APPEAL IN GROUND NO.1 IS AGAINST OF THE O RDER OF LD. CIT(A) IN HOLDING THAT THE ASSESSEE WAS A DEVELOPER AND BUIL DER ELIGIBLE TO CLAIM DEDUCTION U/S 80IA(4) OF THE ACT. 10.1 AT THE TIME OF HEARING, LD. COUNSEL FOR THE AS SESSEE CONTENDED THAT THE ISSUE IN QUESTION IS SQUARELY COVERED BY THE DECISI ON OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 200 1-02, 2005-06 TO 2008-09, ORDER DATED 21.12.2012, WHEREIN THE ITAT HAS HELD A S UNDER:- ITA NOS. 968 & 1612/AHD/2013 ASSESSEE & REVENUE - SUGAM CONSTRUCITON PVT LTD AY : 2009-10 8 ON THE BASIS OF THIS EXAMINATION WE, THEREFORE, GI VE A FINDING THAT IT WAS WRONG ON THE PART OF THE AO TO HOLD THAT THE ASSESSE E HAS MERELY ACTED AS A CONTRACTOR. BY ANALYZING THE NATURE OF WORK EXECUTE D BY THE ASSESSEE, IT CAN BE GATHERED THAT THE ASSESSEE HAD ACTED AS A DEVELO PER. THE ASSESSEE HAS UNDERTAKEN THE RESPONSIBILITY OF EXECUTION OF THE W ORK. THE ASSESSEE HAS DEVELOPED ITS OWN DESIGN AND ON GETTING APPROVAL AP PLIED THE TECHNOLOGY FOR COMPLETION OF INFRASTRUCTURE FACILITY. TERMS AND CO NDITIONS OF THE AGREEMENT EXECUTED WITH CERTAIN GOVERNMENT DEPARTMENTS HAVE A LSO ESTABLISHED THAT THE RISK IN EXECUTION OF WORK HAS ALSO BEEN UNDERTA KEN BY THE ASSESSEE. RATHER, THE ASSESSEE WAS HELD RESPONSIBLE FOR ANY D AMAGE OR LOSS TO THE PROPERTY. WE HAVE ALSO NOTED THAT THE REVENUE DEPAR TMENT HAS WRONGLY INTERPRETED THE WORD 'OWNED' IN SECTION 80IA(4)(I)(A) OF THE IT ACT. AS DISCUSSED HEREINABOVE, WE HEREBY CONCLUDE THAT AN E NTERPRISE WHICH IS EITHER DEVELOPING OR OPERATING OR MAINTAINING THE INFRASTR UCTURE FACILITY IS REQUIRED TO BE OWNED BY A COMPANY OR A CONSORTIUM OF COMPANI ES DULY REGISTERED IN INDIA. THE ACT DO NOT PRESCRIBE THAT THE INFRASTRUC TURE FACILITY IS TO BE OWNED BY SUCH AN ENTERPRISE. THE INFRASTRUCTURE FACILITY IS ALWAYS THE PROPERTY OF THE GOVERNMENT AND AN ENTERPRISE IS BOUND BY THE AG REEMENT TO TRANSFER THE SAME AFTER THE SETTLED PERIOD. THE ASSESSEE'S EXECU TION OF WORK FALL WITHIN FIRST CATEGORY, I.E. DEVELOPING OF INFRASTRUCTURE FACILIT Y. IT WAS INCORRECT ON THE PART OF THE AO TO HOLD THAT THE ASSESSEE BEING FALL EN WITHIN THE FIRST CATEGORY NOT ENTITLED FOR THE DEDUCTION. THE DECISIONS OF AB G HEAVY INDUSTRIES(SUPRA), KOYA & COMPANY (SUPRA), AND RADH E DEVELOPERS (SUPRA) AND BHARAT UDYOG LTD. 118 ITD 336(MUM.) THUS SUPPORT THE STAND TAKEN BY THE ASSESSEE. THE ASSESSEE HAS EXECUTED THE CONSTRU CTION OF INFRASTRUCTURE FACILITY IN RESPECT OF THE GOVERNMENT PROJECTS, AS IS EVIDENT FROM THE LIST OF THE AGREEMENTS PLACED ON RECORD, HENCE IT WAS A FAC TUAL ERROR ON THE PART OF THE AO TO SAY THAT THE ASSESSEE HAD ENTERED IN SOME CONTRACT WITH FEW PRIVATE PARTIES. WE THEREFORE HOLD THAT THE ASSESSEE IS ELI GIBLE FOR THE DEDUCTION U/S.80IA AS CLAIMED OF RS.4,79,508/-. THE GROUND RAI SED IN THIS REGARD FOR THE YEAR UNDER CONSIDERATION IS HEREBY ALLOWED. . . 21. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED VIEW THAT THE NATURE OF WORK EXECUTED BY THE ASSESS EE, AS LISTED AT SL.NOS.1 TO 10 AND 12, HAS ALREADY BEEN DISCUSSED SUPRA AT LENG TH WHILE DECIDING THE APPEAL FOR A.Y.2005-06. WE HAVE EXAMINED THE CONTRAC T AGREEMENT EXECUTED BETWEEN THE ASSESSEE AND THE GOVERNMENT AGENCIES. WE HAVE ALSO EXAMINED THAT THE ASSESSEE HAS APPLIED THE TECHNOLOGY FOR WH ICH HE WAS AWARDED THE CONTRACT. ALTHOUGH THE BILLS OF THE WORK EXECUTED WE RE RAISED BY THE ASSESSEE, BUT THERE WAS AN ELEMENT OF RISK DUE TO THE REASON THAT THE ASSESSEE WAS MADE RESPONSIBLE FOR ANY DAMAGES OR LOSS IN EXECUTION OF THE WORK. AFTER CONSIDERING THE NATURE OF THE WORK AND OTHER ALLIED FACTORS, WE HAVE TAKEN A CONSCIENTIOUS VIEW IN RESPECT OF THOSE PROJECTS THA T THE ASSESSEE IS ENTITLED FOR ITA NOS. 968 & 1612/AHD/2013 ASSESSEE & REVENUE - SUGAM CONSTRUCITON PVT LTD AY : 2009-10 9 THE DEDUCTION U/S.80IA(4) OF THE ACT. IN THE LIKE MAN NER, FOR THE YEAR UNDER CONSIDERATION AS WELL, WE HEREBY HOLD THAT THE ASSE SSEE IS ENTITLED FOR THESE PROJECTS FOR THE CLAIM OF DEDUCTION U/S.80IA. 10.2 WE, THEREFORE, RESPECTFULLY FOLLOWING THE JUDG MENT OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE (SUPR A), ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN THIS REGARD; THEREFORE, THE THIS GROUND OF THE REVENUE IS ACCORDINGLY DISMISSED. 11. THE OTHER SUBSTANTIVE GROUND OF THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) IN GRANTING THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80G OF THE ACT OF RS.2,50,000/-. 11.2 LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT DU RING THE COURSE OF SCRUTINY PROCEEDINGS THE ASSESSEE WAS ASKED TO FURN ISH WORKING AND EXPLANATION REGARDING THE COMPUTATION OF INCOME AND THE DETAILS AS CALLED FOR WERE FURNISHED BY THE ASSESSEE ALONGWITH TAX AU DIT REPORT, WHEREIN THE AUDITORS HAS QUALIFIED CERTAIN ITEMS WHICH WERE TO BE ADDED BACK TO THE TOTAL INCOME. HOWEVER, ASSESSEE VIDE LETTER DATED 19.08. 2011 ADMITTED ITS MISTAKE AND FILED A REVISED COMPUTATION OF INCOME AFTER ADD ING BACK THE AMOUNT OF RS.5,38,001/- TO THE TOTAL INCOME. HOWEVER, IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A), IT WAS SUBMITTED THA T THE ASSESSEE-COMPANY HAS MADE DONATION OF RS.5,00,000/- TO UMIYA MATA KA DVA PATIDAR EDUCATION AND SAMAJ SEVA TRUST, WHICH WAS REGISTERE D U/S 12AA OF THE ACT AND WAS ALSO APPROVED U/S 80G(5) OF THE ACT. THE A SSESSEE-COMPANY ACCORDINGLY CLAIMED DEDUCTION U/S 80G IN THE ORIGIN AL COMPUTATION OF INCOME AND ALSO IN THE REVISED COMPUTATION OF INCOM E. HOWEVER, LD. ASSESSING OFFICER DISALLOWED THIS CLAIM OF THE ASSE SSEE. 11.2 ON APPEAL BEFORE THE LD. CIT(A), LD. CIT(A) AL LOWED THE CLAIM OF THE ASSESSEE U/S 80G(5) OF THE ACT AS THE ASSESSEE WAS PRODUCED BEFORE HIM THE RELEVANT COPIES OF DONATION RECEIPT AND LETTER OF A PPROVAL DATED 09.11.2006 FOR THE PERIOD FROM 01.04.2006 TO 31.03.2009 ISSUED BY THE CIT, GANDHINAGAR ITA NOS. 968 & 1612/AHD/2013 ASSESSEE & REVENUE - SUGAM CONSTRUCITON PVT LTD AY : 2009-10 10 AND THE SAME IS ALSO PLACED ON RECORD. SINCE THE A SSESSEE HAS PRODUCED THE RELEVANT DETAILS FOR GRANTING DEDUCTION U/S 80G OF THE ACT, THE LD. CIT(A) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S 80G OF THE ACT AS CLAIMED BY THE ASSESSEE OF RS .2,50,000/-. WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND ACCORDINGLY DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 12. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. 13. IN THE COMBINED RESULT, THE APPEAL FILED BY THE ASSESSEE AND THE REVENUE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 18 TH SEP, 2017 AT AHMEDABAD. SD/- SD/- AMARJIT SINGH (ACCOUNTANT MEMBER) MAHAVIR PRASAD (JUDICIAL MEMBER) AHMEDABAD; DATED 18/09/2017 **BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION- .. 13/09/2017 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13/09/2017 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER