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TMI Blog2014 (5) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... d company - The status of the contractee was very much before the AO – the reopening cannot be permitted – Decided in favour of Assessee. - Special Civil Application No. 2161 of 2014 - - - Dated:- 5-5-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Petitioner : Mr. S. N. Soparkar, Sr. Adv. with Mr. B. S. Soparkar, Adv. For the Respondents : Mr. Sudhir M. Mehta, Adv. ORDER (Per : Honourable Mr. Justice Akil Kureshi) We have heard the learned counsel for the parties for final disposal of the petition. Petitioner has challenged a notice dated 24.8.2012 issued by the respondent Assessing Officer seeking to reopen the assessment of the petitioner for the assessment year 2008-09. Brief facts are as under: The petitioner is a company registered under the Companies Act. The petitioner is engaged in the business of developing infrastructure facilities. For the assessment year 2008-09, the petitioner filed its return of income on 27.9.08 declaring nil income. The petitioner was assessed under section 115JB of the Income Tax Act, 1961 ( the Act for short) and paid tax of Rs.51.09 lacs (rounded off). The petitioner had claimed deduction under section 80IA(4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty or any other statutory body as required in section 80IA(4)(i) (a) of the Act. GSRDC was a company and not a statutory body nor local authority. Thus, the condition laid down in section 80IA(4)(i)(a) of the Act was not fulfilled. The assessee only subcounteracted the project allotted to GSRDC by the state Govt. Thus in view of the nonfulfillment of condition of section 80IA, the deduction allowed to the tune of Rs.4,15,19,662/- was irregular and liable to be disallowed. The under assessment of Rs.4,15,19,662/- involved income Tax as under: IT@ 30% on Rs.41519662 : Rs.1,24,55,898/- Surcharge @ 10% : Rs. 12,45,589/- Ed. Cess @ 30% of IT + SC : Rs. 4,11,044/- Total IT : Rs.14,11,14,531 Less IT charges u/s 115JB : Rs. 51,09,690 +Int. u/s.234B@ 1% PM on Rs.9002841 for 4/08 to 9/10 i.e. 30 months (30)% : Rs. 27,00,852 Total short levy of income tax : Rs. 1,17,03,693 2. As per section 80IA(1) of the Act, any income derived from the eligible business sis eligible for hundred percent deductions. Without prejudice to the facts and observation made in subpara (1) above, it was also observed that total receipts of Rs.41519662/- shown as derived from eligible bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o an agreement with the Central Government, State Government or local authority or any other statutory body was not examined. In any case, the amount of Rs.1.98 crores (rounded off) received by the assessee did not pertain to toll collection. Such income, therefore, cannot be said to have been derived from development of infrastructure facility. In this respect, he relied on the following decisions: (1) In the case of Sharavathy Steel Products P. Ltd v. ITO, 347 ITR 371 (Karn.). (2) In the case of CIT v. Le Passage to India Tour and Travels P. Ltd., 335 ITR 69 (Delhi). (3) In the case of CIT v. Maharani Packaging (P) Ltd., (2012) 24 taxmann.com. 204 (HP). The counsel also referred to a decision of the Karnataka High Court in the case of CIT v. Rinku Chakraborthy, reported in (2012) 20 taxmann.com 609 (Kar.) to contend that the taxpayer should not be allowed to take advantage of the oversight or mistake committed by the taxing authority. Having thus heard the learned counsel for the parties, if we peruse the reasons more closely, the Assessing Officer desired to disallow the assessee s claim for deduction under section 80IA(4) of the Act on two grounds. Firstly, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.8.2010 during the assessment, where it was pointed out to the Assessing Officer as under: 1. G.S.R.D.C. has paid Rs.2,04,77,266/- for Toll free passage of two wheelers and three wheelers vehicles over the ROB constructed by us. There was agitation by the people from Baroda and nearby places for levy of Toll tax on two wheelers and three wheelers at the relevant time during F.Y. 2002-03. The Government after considering the agitation permitted Toll free passage of two wheelers and three wheelers vehicle over the ROB undertaking to pay us the Toll charges for such vehicles. G.S.R.D.C. Is considering the passage of two wheelers and three wheelers periodically and as per its working pay us the Toll charges for such vehicle on which TDS is made. The payment by G.S.R.D.C. Is therefore, not payment for any work contract executed by us. But it is also Toll income. 2. The Government of Gujarat or G.S.R.D.C. Or other Banks/Financial Institutions have not participated for financial loans. The Company has arranged financial requirement for the project from its shareholders through quashi equity deposits which is shown in Balance Sheet as unsecured loans. 3. As per Concession Agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee as the assessee has produced the documentary evidence in respect of the eligibility of deduction claimed u/s.80IA(4) of the Act. 6. After considering the details income of assessee is computed as under: Gross total income : Rs.4,15,19,662/- Less:Deduction u/s 80IA : Rs.4,15,19,662 Total : Rs. Nil Calculate tax on book profit (Rs.4,50,98,755/) u/s.115JB i.e. Rs.10% of Book Profit Tax is worked as MAT u/s.115JB 7. Assessed u/s.143(3) of the I.T.Act. Issue demand notice and challan charge interest u/s.234B and 234C of the I.T.Act.Give credit for the prepaid taxes if any. It can thus be seen that the sole claim of the assessee for deduction under section 80IA(4) of the Act came up for consideration during scrutiny assessment. On being satisfied that the assessee was entitled to such claim, the assessment order was passed. Any attempt on the part of the Assessing Officer now to revisit such a claim would be based on a mere change of opinion. The Supreme Court in the case of CIT v. Kelvinator of India Ltd., 320 ITR 561 (SC) observed as under: On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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