Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (2) TMI 71 - ITAT AHMEDABADUnexplained cash credit u/s.68 - CIT(A) deleted the addition admitting fresh evidence u/r 46A - Held that:- As now the assessee has informed that the labour charges have actually been paid in the subsequent years & drew the attention on certain evidences to corroborate that the balance outstanding amount had already been paid as on date, therefore should have been allowed. At this stage of second appeal, it is not possible to examine the veracity of such documents which were not placed before the AO. Therefore considering it proper as also justifiable to again restore this issue back to the file of the AO, so that the Revenue Department can examine the correctness of the claim that the amount in question in fact was not an amount as qualified u/s.68, but the impugned amounts were in the nature of the amounts which are qualified u/s.41(1). By adopting the recourse of setting aside to assessment stage , the grievance of infringement of Rule 46A is also addressed. After ascertaining that the amounts in question in fact were the liabilities to be paid by the assessee and not cash deposits or loans, the AO is then directed to verify the correctness of the claim now as that those liabilities were squared up by making the payment in the years to come - in favour of revenue for statistical purposes. Rejection of Deduction u/s.80-IA - project of infrastructure - whether the assessee’s nature of work had fallen under the definition of a “contractor” or a “developer” - Held that:- The total turnover of the assessee was received mainly in respect of development of arch-bridges, made over railway-track or under bridges on Delhi Ghaziabad Section & execution of “RCC Box Bridge” by applying pushing method for passing under main track and executed contract & also provided under-bridge below railway-track. On the basis of this examination it was wrong on the part of the AO to hold that the assessee has merely acted as a contractor as by analyzing the nature of work executed by the assessee, it can be gathered that the assessee had acted as a developer. The assessee has undertaken the responsibility of execution of the work. The assessee has developed its own design and on getting approval applied the technology for completion of infrastructure facility. Terms and conditions of the agreement executed with certain Government Departments have also established that the risk in execution of work has also been undertaken by the assessee. The Revenue Department has wrongly interpreted the word “owned” in section 80IA(4)(i)(a). Thus to conclude the act do not prescribe that the infrastructure 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 agreement to transfer the same after the settled period. The assessee’s execution of work fall within first category, i.e. developing of infrastructure facility. The decisions of ABG Heavy Industries(2010 (2) TMI 108 - BOMBAY HIGH COURT), Koya & Company (2012 (5) TMI 158 - ITAT HYDERABAD), Radhe Developers (2007 (6) TMI 316 - ITAT AHMEDABAD) and Bharat Udyog Ltd. (2008 (6) TMI 225 - ITAT BOMBAY-F) thus support the stand taken by the assessee - thus the assessee is eligible for the deduction u/s.80IA - in favour of assessee. Disallowance on account of freight and warehouse charges u/s.40(a)(ia) - CIT(A) deleted the addition - Held that:- As decided in CIT vs. J.K. Construction Co. [2013 (2) TMI 54 - GUJARAT HIGH COURT] under a situation when the TDS amount is duly deposited in the Government Exchequer before the due date of filing of return, then the provisions of section 40(a)(ia) are not to be invoked for the purpose of disallowance of expense. In the present case, on the basis of the undisputed fact that the TDS was deposited within the said prescribed date, therefore we hereby dismiss this ground of the Revenue - in favour of assessee. Deduction u/s 80IA - civil work executed at Mazgaon Dock Ltd. (MDL) - Held that:- As in respect of the civil work executed at MDL the nature of work was found to be a repair work. The assessee has not demonstrated that there was development of any infrastructure facility. Facts as culled out from the records reflect that the assessee had carried out the civil work like excavation, concrete flooring and also provided steel enforcement bar for RCC flooring, etc.. Since the basic condition is that for the purpose of claim of deduction u/s.80IA(4) an Enterprise should develop an infrastructure facility as defined in Explanation and the work executed with Mazgaon Dock Ltd. was not within the said definition, therefore the nature of civil work executed did not qualify for deduction u/s.80IA(4) - against assessee. Disallowance of expenditure under mutual agreement - allowed only Rs 1 Lac only - Held that:- Revenue Authorities have appreciated the evidence and thereafter arrived at the conclusion that there was no justification for claim of an amount Rs.1 lac due to lack of factual as also legal corroboration. The assessee has not substantiated its claim in respect of an outstanding liability per-say of Rs.1 lac, therefore in the absence of any cogent evidence, the factual finding of the authorities below affirmed and dismiss this ground - against assessee. Disallowance of deduction on account of liquidated damages retained by the appellant’s customer - Held that:- The assessee has furnished the copy of account of MDL in its book & a letter of the Chief Manager (CW) dated 08/06/2005, wherein as per the subject the assessee has executed “Concrete flooring with anchor plate in Alcok Yard in between existing Gantry rail track” and retained liquidated damages provisionally at 6% amounting to Rs.1,73,106/-. Later on, an amount of Rs.41,497/- was refunded. The MDL has deducted Rs.1,31,610/- as per letter dated 10.10.2008 as liquidated damages. Thus in terms of the provisions of section 41(1), the assessee is under obligation to account for the impugned claim in Asst.Year 2008-09. See Rotork Controls India Pvt.Ltd.(2009 (5) TMI 16 - SUPREME COURT OF INDIA) - in favour of assessee. Disallowance of deduction on account of depreciation on motor cars - the cars in question were in the name of the directors - Held that:- As decided in CIT vs. Aravali Finlease Ltd. [2011 (8) TMI 814 - GUJARAT HIGH COURT] that although the vehicle was registered in the names of the Directors but it was asset of the assessee, hence depreciation on the said vehicle is to be allowed. Also see ITO vs. Electro Ferro Alloys Ltd. [2011 (10) TMI 495 - ITAT, AHMEDABAD ] - in favour of assessee.
|