Koya & Company Construction Ltd., Hyd, Hyderabad V. DCIT, Circle-2(1), Hyd, Hyderabad

MA 52/HYD/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4978 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 19-08-2016
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER M.A. NO. 52/HYD/2016 (ARISING OUT OF ITA NO. 507/HYD/2015) ASSESSMENT YEAR: 2006-07 M/S. KOYA & COMPANY CONSTRUCTION LTD., HYDERABAD [PAN: AACCK3240R] VS DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD (APPLICANT) (RESPONDENT) FOR ASSESSEE : SHRI K.C. DEVDAS, AR FOR REVENUE : SMT. SUMAN MALIK, DR DATE OF HEARING : 23-09-2016 DATE OF PRONOUNCEMENT : 28-10-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS MISCELLANEOUS APPLICATION IS PREFERRED BY ASS ESSEE IN ITA NO. 507/HYD/2015, A REVENUES APPEAL. THIS PET ITION WAS PREFERRED REQUESTING THE TRIBUNAL TO PASS APPROPRIATE ORDERS TO RECTIFY CERTAIN MISTAKES APPARENT FROM RECORD. 2. THE MAIN GROUND IN THE APPEAL ORIGINALLY WAS THAT WHETHER ASSESSEE IS ENTITLED TO DEDUCTION U/S. 80IA(4) OF THE IN COME TAX ACT [ACT] IN RESPECT OF INFRASTRUCTURE FACILITY IN THE AREAS OF WATER PROJECTS. VIDE ORDERS DT. 22-03-2012, RELATING TO AYS. 2003-04, 2 M.A. NO. 52/HYD/2016 2004-05, 2005-06 & 2006-07, THE ITAT HELD THAT ASSESSE E IS ENTITLED FOR DEDUCTION U/S. 80IA(4) BUT, HOWEVER, RESTOR ED THE MATTER TO THE FILE OF AO TO SEGREGATE THE WORK CONTRACTS A ND INFRASTRUCTURE PROJECT CONTRACTS AND ALLOW THE CLAIM ON CONTRACTS PERTAINING TO INFRASTRUCTURE PROJECTS. IN THE CONSEQUE NTIAL ORDERS, AO RELYING ON THE LATER JUDGMENT OF THE GUJARAT HIGH CO URT, DENIED THE DEDUCTION. ON AN APPEAL, LD.CIT(A) WITHOUT GIVING ANY FINDING ON THE ISSUE SET ASIDE BY THE ITAT, HAS ALLOW ED THE DEDUCTION TO ASSESSEE. ON AN APPEAL BY REVENUE, THE I TAT RESTORED THE APPEAL TO THE FILE OF CIT(A) WITH THE OBSERV ATION THAT WE EXPECT THE LD.CIT(A) TO EXAMINE ALL CONTRACTS AN D GIVE A FINDING ON EACH OF THE CONTRACTS AND DETERMINE THE ISSUE OF DEDUCTION IN A MUCH MORE DEFINITE WAY BY WAY OF A SPEAKING ORDER. ASSESSEE IS NOW IN MISCELLANEOUS APPLICATION. 3. THE RELEVANT PARAGRAPHS OF MISCELLANEOUS APPLICATI ON ARE REPRODUCED HERE UNDER: 9. THE APPELLANT ALSO DREW THE ATTENTION OF THE HO N'BLE TRIBUNAL ON 22/6/2016 THAT IN PARA 31 OF ITS ORDER DATED 22/3/2 012 THE TRIBUNAL HAS CATEGORICALLY HELD THAT THE APPELLANT IS ENTITL ED TO DEDUCTION U/S. 80IA(4). 10. IN AN APPEAL PREFERRED BY THE DEPARTMENT ON SIM ILAR GROUNDS FOR THE SUCCEEDING ASSESSMENT YEARS 2007-08, 2008-09 AND 20 09-10 THE TRIBUNAL PASSED SIMILAR ORDERS SETTING ASIDE THE IS SUE TO THE FILE OF THE ASSESSING OFFICER. 11. THE CONSEQUENTIAL ORDERS PASSED BY THE DCIT, CI RCLE(2)(1), GIVING EFFECT TO THE ORDERS OF THE TRIBUNAL FOR ASSESSMENT YEARS 2007-08, 2008- 09 AND 2009-10 ALLOWING THE CLAIM WERE ALSO FILED B EFORE THE TRIBUNAL. 12. THE APPELLANT FURTHER DREW THE ATTENTION OF THE HON'BLE TRIBUNAL TO THE VARIOUS ORDERS PASSED IN THE CASE OF SUSHI HITECH C ONSTRUCTIONS, TAHER ALI INDUSTRIES, KMC CONSTRUCTIONS LTD., AND OTHER T RIBUNAL ORDERS WHEREIN SIMILAR CLAIM FOR DEDUCTION U/S. 80IA(4) WA S ALLOWED. 3 M.A. NO. 52/HYD/2016 13. THE ORDER OF THE TRIBUNAL IN THE MATTER OF SUSH I HITECH CONSTRUCTIONS WAS RELIED UPON AND A COPY OF THE ORDER WAS PLACED AT PAGES 260 TO 268. THIS ORDER OF THE TRIBUNAL, THE APPELLANT RELIABLY LEANS WAS UPHELD BY THE JURISDICTIONAL HIGH COURT OF ANDHRA PRADESH. 14. THE APPELLANTS SUBMISSIONS THAT THE AFORESAID ORDERS OF THE TRIBUNAL IN SUSHI HITECH CONSTRUCTIONS WHICH WERE ALLOWED AN D THE ORDERS IN THE APPELLANTS OWN APPEALS FOR ASST. YEARS 2007-08 TO 2009-10 AND ALSO THE CONSEQUENTIAL ORDERS PASSED BY THE A.C.I.T. ALLOWIN G THE DEDUCTION U/S. 80IA(4) HAS NOT BEEN CONSIDERED BY THE HON'BLE TRIB UNAL, WHILE PASSING THE ORDER FOR THE ASSESSMENT YEAR 2006-2007. THE H ON'BLE TRIBUNAL AT PARA 7 OF ITS ORDER HELD AS UNDER: WE EXPECT THE LEARNED CIT(A) TO EXAMINE ALL CONTRAC TS AND GIVE A FINDING ON EACH OF THE CONTRACTS AND DETERMINE THE ISS UE OF DEDUCTION IN A MUCH MORE DEFINITE WAY, BY WAY OF A SPEAKING ORDER. ACCORDINGLY THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURP OSES. 15. THE APPELLANT SUBMITS THAT INADVERTENTLY THE HO N'BLE TRIBUNAL HAD NOT NOTICED THE CONSEQUENTIAL ORDERS PASSED BY THE D.C.I.T. ALLOWING THE DEDUCTION U/S. 80IA(4) OF THE I.T. ACT FOR THE ASSE SSMENT YEARS 2007-08 TO 2009-10 AND THEREFORE AN ERROR CREPT INTO THE ORDER OF THE TRIBUNAL WHICH CALLS FOR RECTIFICATION AND THE APPELLANT PRAYS THA T THE HON'BLE TRIBUNAL PASS ORDERS AS DEEM FIT. 16. THE APPELLANT FURTHER SUBMITS THAT THE ORDER OF THE TRIBUNAL IN THE APPELLANTS OWN CASE, AS WELL AS THE COORDINATING B ENCHES ARE BINDING, AS HELD BY THE SUPREME COURT IN THE CASE OF HONDA S IEL POWER PRODUCTS VS. CIT REPORTED IN 295 ITR 468. 4. LD. COUNSEL REITERATED THE SUBMISSIONS MADE IN THE PETITION, WHERE AS LD. DR OBJECTED TO AS THE ISSUE WAS RESTORED TO THE CIT(A) FOR FRESH ADJUDICATION. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND ORDER OF THE BENCH. AS BRIEFLY STATED ABOVE, ORIGINALLY THE ITAT, WHILE GIVING A FINDING THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80IA(4) ON THE INFRASTRUCTURE PROJECTS, HAS RESTORED THE ISSUE OF SEGRE GATION OF CONTRACTS AND QUANTIFICATION OF DEDUCTION TO THE FILE OF THE AO TO EXAMINE AND DETERMINE AFRESH. IT SEEMS ASSESSEE HAS FURNISHED THE RELEVANT DETAILS TO THE AO. HOWEVER, AO WITHOUT FOL LOWING THE 4 M.A. NO. 52/HYD/2016 DIRECTIONS OF THE ITAT, DENIED THE DEDUCTION BASED ON SUBSEQUENT JUDGMENT OF HONOURABLE GUJARAT HIGH COURT. IT WAS CON TENDED BEFORE THE LD.CIT(A) BY ASSESSEE THAT AO HAS TRAVERSED BEYOND THE DIRECTIONS OF THE ITAT. EVEN THOUGH THE SUBMISSIONS WE RE EXTRACTED BY THE CIT(A) IN THE ORDER, WITHOUT GIVING AN Y FINDINGS THE CLAIM WAS ALLOWED. ON APPEAL BY THE REVENUE, THE ITAT FELT THAT CIT(A) SHOULD HAVE GIVEN THE FINDINGS AS DIRECTED BY THE ITAT. THE ORDER OF ITAT IN PARA 7 IS AS UNDER: 7. WE HAVE PERUSED THE FACTS ON RECORD AND CIRCUMSTANCES IN THIS CASE, THE LEGAL PRINCIPLES AR ISING HEREIN AND WE ARRIVE AT OUR CONSIDERED VIEW THAT SO FAR AS THE LEGAL PARAMETERS ARE CONCERNED, IT HAS BEEN VERY ELABORAT ELY ANALYSED BY THE ITAT IN THE ASSESSEES OWN CASE THAT IF THE ASSESSEE IS CONDUCTING DEVELOPMENTAL ACTIVITIES, THEN THE DEDUC TION IS ALLOWABLE, BUT IF IT IS ONLY RELATE TO THE WORK CON TRACTS, THEN SUCH DEDUCTION IS NOT ALLOWABLE. WE ALSO FIND AS PER THE MA FILED BY THE ASSESSEE THE TRIBUNAL HAD DIRECTED THE AO TO SEGREG ATE AS REGARDS THE TOTAL CONTRACTS WHICH ONE IS DEVELOPMENT CONTRA CTS AND WHICH ARE ONLY WORKS RELATED CONTRACTS. CONTRACTS WHICH A RE DEVELOPMENT CONTRACTS, TO THAT EXTENT DEDUCTION IS ALLOWABLE U/ S 80IA OF THE ACT. AO WITHOUT EXAMINING THE NATURE OF CONTRACT AS DIRE CTED HAS TREATED ALL OF THEM AS WORK CONTRACTS. COMING TO T HE ORDER OF THE LEARNED CIT (A), ALL THESE AFORESAID PARAMETERS WER E TO BE EXAMINED AND PUT FORTH IN HIS OTHERWISE ELABORATE A ND EXTENSIVE ORDER. BUT HOWEVER, FOR REASONS BEST KNOWN TO HIM, THOUGH HE HAS ALLOWED THE SAID DEDUCTION TO THE ASSESSEE, BUT THE REASONS FOR ALLOWING THOSE DEDUCTIONS WERE NOT AT ALL FORTHCOMI NG IN HIS ORDER. THE ORDER OF THE LEARNED CIT (A) IS NOT AT ALL A SP EAKING ORDER, NOR IT HAS EXPRESSED IN ANY WAY ALL THE COGENT REASONS FOR WHICH THE ASSESSEE IS ELIGIBLE FOR THE DEDUCTION CLAIMED FOR. IT IS A MATTER OF JUDICIAL EXERCISE AND KNOWLEDGE THAT AS PER THE RUL ING OF THE APEX COURT IN SEVERAL CASES, THE QUASI JUDICIAL AUTHORIT Y ARE SUPPOSED TO PROVIDE A SPEAKING ORDER WHEREBY THE WAY OF THOUGHT IS SPECIFICALLY MENTIONED THEREIN AND IF IT IS NOT A S PEAKING ORDER, THEN IT IS BAD IN LAW. THIS SO BECAUSE THE MENTAL PROCES S AND THOUGHT LEADING TO THE DECISION IS VERY MUCH UNCLEAR. IN TH E INSTANT CASE, THOUGH THE ASSESSEE HAS GONE BEFORE THE ITAT, WE FI ND IN OUR CONSIDERED VIEW THE ORDER OF THE ITAT IS ESSENTIALL Y CLARIFICATORY IN NATURE REGARDING THE LEGAL POSITION OF THE ASSESSEE , BUT IT IS NOT DECISIVE IN NATURE SO AS TO CLEARLY DECIDE WHETHER IN THE GIVEN FACTS AND SITUATION, THE ASSESSEE IS ELIGIBLE FOR DEDUCTI ON OR NOT. NEITHER WE FIND THE CIT (A) HAS GIVEN A REASONED ORDER FOR HIS DECISION. 5 M.A. NO. 52/HYD/2016 THEREFORE, UNDER THE CIRCUMSTANCES AND IN THE INTER EST OF JUSTICE, WE FIND IT DEEM AND PROPER TO SEND THIS FILE BACK T O THE CIT (A) TO GIVE A FINDING ABOUT THE NATURE OF THE CONTRACTS UN DERTAKEN BY THE ASSESSEE AND WHETHER THE SEGREGATION UNDERTAKEN BY THE ASSESSEE VIS--VIS THE DEVELOPMENT CONTRACT AND WORK CONTRAC TS IS CORRECT OR NOT. WE EXPECT THE LEARNED CIT (A) TO EXAMINE ALL C ONTRACTS AND GIVE A FINDING ON EACH OF THE CONTRACTS AND DETERMINE TH E ISSUE OF DEDUCTION IN A MUCH MORE DEFINITE WAY, BY WAY OF A SPEAKING ORDER. ACCORDINGLY THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. 6. SINCE THE ISSUE WAS RESTORED TO CIT(A) FOR PASSING A SPEAKING ORDER, WE ARE OF THE OPINION THAT NO APPARENT MISTAKE HA S OCCURRED SO AS TO RECTIFY THE SAME. MOREOVER, THE ISSU E IS ONE OF THE FACTS OF SEGREGATING THE WORK CONTRACTS AND INFRASTR UCTURE FACILITY, SO THE CO-ORDINATE BENCH DECISIONS CANNOT BE APPLIED WITHOUT EXAMINING THE FACTS. EVEN THOUGH IN SUBSEQUENT YEARS ON SIMILAR PROJECTS, AO HAS ALLOWED THE DEDUCTION, IT IS I N THE DOMAIN OF THE AO TO ALLOW THE DEDUCTION ON THE BASIS OF THE FAC TS. THOSE ORDERS CAN BE A GUIDING FACTOR IN ALLOWING SIMILAR SUCH PROJECTS IN THIS YEAR, BUT FILING OF THE ORDERS IN LATER YEARS AND CO-ORDINATE BENCH DECISION DOES NOT AUTOMATICALLY ENTITLE ASSESSEE TO CLAIM DEDUCTION, UNLESS THE FACTS ARE EXAMINED BY THE AUTHORITI ES. AS ALREADY STATED, AO HAS NOT FOLLOWED THE DIRECTIONS OF THE ITAT AND DENIED THE DEDUCTION AGAIN IN THE CONSEQUENTIAL ORDER. THEREFORE, IT IS FOR THE CIT(A) TO CONSIDER THE ASSESSEES CONTENTIO NS. EVEN THOUGH THE LD.CIT(A) ALLOWED THE APPEAL OF ASSESSEE, N O REASONS WERE GIVEN AND NO FINDINGS WERE GIVEN ON THE WORK CONTRACTS/INFRASTRUCTURE PROJECTS CONSIDERED BY HIM. TH IS FORUM HAVING ALLOWED THE CONTENTIONS OF ASSESSEE ON THE CLAIM OF 80IA(4), HAS RESTORED THE ISSUE TO AO EARLIER ITSELF TO SEGREGATE THE ELIGIBLE CONTRACTS/PROJECTS. IN VIEW OF THAT, THE BENCH HAS RESTO RED THE MATTER TO THE FILE OF THE CIT(A) TO RE-EXAMINE THE ISSUE AND DETERMINE THE ISSUE OF DEDUCTION IN A MUCH MORE DEFIN ITE WAY BY 6 M.A. NO. 52/HYD/2016 WAY OF SPEAKING ORDER. WE ARE OF THE OPINION THAT TH ERE IS NO MISTAKE IN THE DIRECTIONS GIVEN WHICH REQUIRE ANY MODI FICATION. HOWEVER, WE MAKE IT CLEAR THAT LD.CIT(A) CAN CONSIDER THE CONSEQUENTIAL ORDERS PASSED IN ASSESSEES OWN CASE I N OTHER YEARS AND ON THOSE PROJECTS THE DEDUCTION CAN BE ALLOWED ALON G WITH OTHER PROJECTS WHICH SATISFY THE CONDITIONS. WE ARE OF THE OPINION THAT THERE IS NO MERIT IN MISCELLANEOUS APPLICATION RAIS ED AND HENCE REJECTED. 7. IN THE RESULT, MISCELLANEOUS APPLICATION IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER, 2016 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 28 TH OCTOBER, 2016 TNMM COPY TO : 1. M/S. KOYA & COMPANY CONSTRUCTION LTD., NO.12-2-831/38, 72 MIGH MEHDIPATNAM, HYDERABAD. 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1 ), HYDERABAD. 3. CIT (APPEALS)-2, HYDERABAD. 4. CIT-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.