2018 (8) TMI 1969 - AT - Income Tax

Deduction u/s 80IA - contact work performed by the assessee does not fall within the definition of new infrastructure facility u/s 80IA and is in contravention to CBDT Circular No. 4/2010 dated 18.05.2010 - CIT-A allowed the claim - HELD THAT - AO allowed the claim of the assessee to the extent of 50% by holding that work undertaken by the assessee for Widening to four lanes is eligible for deduction but he held that the work undertaken by the assessee for strengthening of existing two lane carriageway in km. 27.80 to km. 61.00 Jagatpur-Chandikhol Section of National Highway No.5 in the State of Orissa is not eligible for such deduction and since this is a combined contract and separate profit is not determinable, he held that 50% of the entire profit is for such work in respect of strengthening of existing two lane carriageway and to this extent, he disallowed the claim of the assessee. When we examine this legal position in the light of this fact that in all earlier years, the AO has himself allowed the claim of the assessee in the orders passed by him u/s 143 (3), there is no infirmity in the order of CIT (A) and hence, we decline to interfere.

Summary

Issues:
Appeals filed by revenue against CIT (A) orders for A.Y. 2013-14 & 2014-15; Claim u/s 80IA eligibility for infrastructure facility; Consistency principle in allowing deduction.

Analysis:
The appeals were filed by the revenue against the CIT (A) orders for the assessment years 2013-14 and 2014-15. The main contention raised by the revenue was regarding the eligibility of the claim u/s 80IA for the infrastructure facility. The revenue argued that the work performed by the assessee did not fall within the definition of a new infrastructure facility as per CBDT Circular No. 4/2010. On the other hand, the assessee supported the order of the CIT (A) through various grounds raised in the C.Os. The learned AR of the assessee pointed out the consistency in allowing the deduction u/s 80IA in earlier years and cited relevant tribunal orders to support the claim. The revenue, however, failed to point out any factual differences or rebut the principle of consistency.

The tribunal examined the facts and noted that the CIT (A) had followed two tribunal orders in similar cases where the deduction u/s 80IA was in dispute for infrastructure work. The tribunal found no difference in facts between those cases and the present case. The AO had allowed the claim partially, holding that only 50% of the profit was eligible for deduction due to the nature of the work undertaken. However, considering the principle of consistency and the fact that in earlier years, the AO had allowed the claim of the assessee, the tribunal upheld the order of the CIT (A) and dismissed the appeals of the revenue and the C.Os. of the assessee.

In conclusion, the tribunal found no infirmity in the order of the CIT (A) and declined to interfere based on the principle of consistency in allowing the deduction u/s 80IA. The appeals filed by the revenue and the C.Os. filed by the assessee were dismissed, and the tribunal pronounced the order in the open court as per the mentioned date.