2018 (11) TMI 473 - AT - Income Tax

Eligibility of deduction u/s 80IA - Buffer agency granting work contract of local bodies on behalf of the Government of Gujarat and not as a developer of infrastructure facility Held that - As decided in GUJARAT URBAN DEVELOPMENT COMPANY LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX 2014 (9) TMI 82 - ITAT AHMEDABAD the appellant is doing the work of a concern engaged in work which is in the nature of a works contact awarded by any person (including the Central or State Government) and executed by it - As per the amended Explanation below section 80IA(13) with retrospective effect from 1.4.2000; the work should not be of the nature (emphasis supplied) of contract and not only contract. Here the project costs and source thereof not being revenue of the appellant, it being not affected by the actual cost and efficiency of work, the assets created and the source not being of the appellant at any stage and it being entitled to a fixed remuneration for its professional services; it clearly is falling in the excluded category as per the amended Explanation below section 80IA(13); and therefore, not eligible for deduction. - Decided against assessee.

Summary

Issues Involved:
Delay in filing appeal due to misplaced files, Disallowance of claim under section 80IA(4) of the Income Tax Act, 1961.

Delay in Filing Appeal:
The assessee's appeal was found to be time-barred by 123 days due to misplaced files. The assessee explained that organizational changes in the finance department led to the misplacement of files, causing a delay in filing the appeal. The Tribunal considered this reasonable cause and condoned the delay, proceeding to dispose of the appeal on merit.

Disallowance of Claim under Section 80IA(4):
The primary issue revolved around the disallowance of a claim amounting to ?1,97,04,712 under section 80IA(4) of the Income Tax Act, 1961. The Revenue pointed out that a similar issue had been addressed in the preceding year, where the Tribunal confirmed the disallowance. The Tribunal referred to its earlier order where it upheld the disallowance based on the assessee not bearing any risk or consequences arising from the project. Citing the precedent set by the Jurisdictional High Court, the Tribunal rejected the assessee's appeal, as the facts were identical to the previous case. The Tribunal concluded that there was no merit in the appeal and dismissed it accordingly.

This judgment highlights the importance of timely filing of appeals and the significance of consistent application of legal principles in similar cases. The decision emphasizes the need for taxpayers to substantiate their claims with relevant evidence and adhere to the statutory provisions to avoid disallowances.