2017 (7) TMI 956 - HC - Income Tax

Allowing the deduction u/s 80IA to the assessee on the basis of return filed after the issue of notice u/s 153A - Held that - Tribunal has justified deduction under Section 80IA on the basis of return filed under Section 153A by observing that for the assessment year 2009-10 and onwards, the time for filing revised return has not expired and, therefore, claim for deduction under Section 80IA if not made earlier could have been made in the revised return. Once it could have been claimed in revised return under Section 139 (1), the same could have also been claimed under Section 153 (A). Sri Manish Misra, learned counsel for appellant contended that return under Section 153 (A) is not a revised return but it is a original return. If that be so, then in our view, deduction under Section 80IA, if otherwise admissible, always could have been claimed and we are not shown any authority otherwise to take a different view. Therefore, in both way, deduction under Section 80IA , if otherwise admissible, could have been claimed by Assesses. Whether Assesses is not Developer but Contractor ? - Held that - Tribunal has confirmed findings of fact recorded by CIT (A) holding that Assesses is a Developer and not a Contractor and the otherwise findings recorded by A.O have been reversed by CIT (A). Since it is a finding of fact concurrently recorded by CIT (A) and Tribunal, which has not been shown perverse on contrary to record. No substantial question of law. Assessee appeal allowed.

Summary

Issues involved:
1. Justification of deduction under Section 80IA based on return filed under Section 153A.
2. Validity of the order of CIT (A) regarding the classification of the assessee as a "Developer" instead of a "Contractor."

Analysis:

Issue 1:
The appeal under Section 260A of the Income Tax Act, 1961 questioned the validity of allowing deduction under Section 80IA based on a return filed under Section 153A for the assessment year 2009-10. The Tribunal justified the deduction by stating that the time for filing a revised return had not expired, allowing the claim for deduction under Section 80IA to be made in the revised return. The appellant argued that the return under Section 153A was original, not revised. However, the court held that if the deduction under Section 80IA was admissible, it could have been claimed in both the original and revised returns. Consequently, the court ruled in favor of the assessee, affirming the Tribunal's view.

Issue 2:
The second substantial question of law pertained to the classification of the assessee as a "Developer" rather than a "Contractor." The CIT (A) and Tribunal concluded that the assessee was a developer based on detailed findings and evidence presented. The CIT (A) extensively discussed the issue, citing relevant circulars and case laws to support the classification. The Tribunal concurred with the CIT (A) and emphasized that contracts involving design, development, financial involvement, and maintenance could not be considered simple works contracts. The Tribunal upheld the findings that the assessee was a developer, not a mere contractor. As these findings were based on facts and legal positions, the court found no infirmity in the decision. Therefore, the issue of the assessee's classification as a developer was settled in favor of the assessee by both the CIT (A) and the Tribunal, and the appeal was dismissed.

In conclusion, the High Court of Allahabad upheld the Tribunal's decisions regarding the justification of deduction under Section 80IA and the classification of the assessee as a developer, dismissing the appeal.