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2017 (11) TMI 242 - AT - Income TaxDisallowance of deduction u/s. 80IA - Held that - We find that the assessing officer, in this case has passed an order for the impugned Assessment Year, seven days after passing the assessment order for the Assessment Year 2005-06. AO had allowed the claim for deduction of the assessee on 9 projects in that year. A similar disallowance was not made for the Assessment Year 2005-06. No fault was found by the Assessing Officer on any of the projects while noting down the details of each of the seven projects undertaken by the assessee during the year. No adverse inference has been drawn on any of these seven projects that they do not qualify to be infrastructural facilities in terms of section 80 IA(4) of the Act. Under these circumstances, we are of the considered opinion that the submissions of the ld. DR, that the issue should be restored to the file of the assessing officer for examining the eligibility of each project is devoid of merit. Hence we reject the same
Issues Involved:
1. Delay in filing the appeal. 2. Disallowance of deduction under Section 80-IA for Assessment Year 2005-06. 3. Disallowance of deduction under Section 80-IA for Assessment Year 2006-07. 4. Disallowance related to retention money on foreign projects for Assessment Year 2006-07. Issue-wise Detailed Analysis: 1. Delay in Filing the Appeal: The Revenue's appeal was delayed by 16 days. The Tribunal condoned the delay after reviewing the affidavit provided by the Revenue explaining the delay, thereby admitting the appeal. 2. Disallowance of Deduction under Section 80-IA for Assessment Year 2005-06: The assessee, engaged in ground engineering and construction, claimed deductions under Section 80-IA for various projects. The Assessing Officer (AO) allowed deductions on nine projects but disallowed them on four projects, arguing they did not qualify as infrastructure facilities under Section 80-IA(4). The disputed projects included: - Development of a launchpad for GSLV Mark III at Sriharikota. - Development of a Jetty at the Naval Base in Visakhapatnam. - Development of a Bus Terminal Complex for Karnataka State Transport Corporation in Bangalore. - Development of a turbine building for the Kundankulam Nuclear Power Project. The Tribunal noted that the CIT(A) had not provided a detailed reasoning for reversing the AO's findings. Therefore, the Tribunal restored the issue to the AO for fresh adjudication, instructing the AO to consider all submissions and pass a speaking order. 3. Disallowance of Deduction under Section 80-IA for Assessment Year 2006-07: The AO disallowed the deduction under Section 80-IA, arguing that the assessee was a contractor, not a developer. The CIT(A) reversed this decision, following the precedent set in the assessee’s earlier assessment years, which was upheld by the Kolkata Tribunal. The Tribunal confirmed that the assessee was a developer, not merely a contractor, and was eligible for the deduction under Section 80-IA. The Tribunal dismissed the Revenue's argument that the deduction under Section 80-IA(4) is only available for Public-Private Partnership (PPP) models where private parties bring in funds. 4. Disallowance Related to Retention Money on Foreign Projects for Assessment Year 2006-07: The CIT(A) held that the right to receive retention money had not accrued during the assessment year, following the jurisdictional High Court's decision in the assessee’s own case. The Tribunal found no error in this finding and upheld the CIT(A)’s decision, dismissing the Revenue's ground on this issue. Conclusion: - The appeal for the Assessment Year 2005-06 was allowed for statistical purposes, with the issue of deduction under Section 80-IA being remanded back to the AO for fresh adjudication. - The appeal for the Assessment Year 2006-07 was dismissed, upholding the CIT(A)’s decisions on both the deduction under Section 80-IA and the retention money issue.
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