9911796707
TMI Blog2016 (3) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the valuation report of the DVO, therefore, in absence of any contrary material/evidence brought before us by the revenue authorities that the assessee has paid anything beyond whatever has been disclosed we find no infirmity in the order of the CIT(A) deleting the addition - Decided in favour of assessee Deduction u/s 80IA(4)(i) in respect of profit earned by the assessee from development of infrastructure facilities - Held that:- We find merit in the submission of the Ld. Counsel for the assessee that netting of interest should be allowed for computation of deduction u/s.80IA in the light of the ratio of the decision of Hon’ble Supreme Court in the case of ACG Associated Capitals Vs. CIT [2012 (2) TMI 101 - SUPREME COURT OF INDIA ]. We accordingly set aside the order of the CIT(A) and direct the AO to recompute the deduction u/s.80IA by netting the interest.- Decided in favour of assessee Deduction on account of proportionate interest on diversion of funds for non business purposes - CIT(A) allowed the claim - Held that:- The factual finding given by the CIT(A) that the advances were made to the sub contractors namely Sunil Construction and Ashok Chipre since 2001-02 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for giving various bank guarantees and meeting EMD requirements. In fact, the word 'official' is also mentioned against these workings. In my opinion, the contents of page 7 do not reflect the unaccounted expenses of the appellant and the assessing officer is directed to reduce this sum from the total for assessment year 2010-11 and thereafter work out the expenses incurred on the basis of these papers as additional income of the assessee. - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... the first floor. Further, in the second instance the rate paid by the assessee per sq.ft. is more than the rate per sq.ft. of the sale instance for which the DVO ignored the sale instance. It was further submitted that the assessee being a company provisions of section 56(1)(vii)(b) are not applicable. 6. However, the AO was not satisfied with the explanation given by the assessee and brought to tax the difference between the value determined by the DVO and the value declared by the assessee and made addition of ₹ 4,15,196/- u/s.69B of the I.T. Act, 1961 on account of the property purchased by the assessee during the impugned assessment year. 7. Before CIT(A) it was submitted that no incriminating evidence was found regarding undervaluation of the properties. Further, the AO has not pointed out any discrepancies between the amount spent on making the investments and the amounts reflected in the books as provided u/s.69B. Relying on various decisions it was submitted that the additions made by the AO should be deleted. 8. Based on the arguments advanced by the assessee the Ld.CIT(A) deleted the addition made by the AO u/s.69B. While doing so he held that the AO is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for the flats purchased by it. The appellant succeeds on this ground." 9. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 10. The Ld. Departmental Representative heavily relied on the order of the AO. 11. The Ld. Counsel for the assessee on the other hand while supporting the order of the CIT(A) submitted that the DVO instead of considering comparable cases in the same building has considered sale instances in some different buildings. According to the Ld. Counsel for the assessee a comparison has to be made between an apple and apple and it cannot be made between an apple and an orange. Referring to the decision of Hon'ble Delhi High Court in the case of CIT Vs. Puneet Sabharwal reported in 328 ITR 485 he submitted that addition cannot be made only on the basis of report of the DVO. The primary burden to prove the understatement or concealment of investment is on the Revenue. Referring to the order of the CIT(A) he submitted that the CIT (A) has given a factual finding that in respect of Flat No.7 purchased by the assessee during the impugned assessment year the assessee has made payment of a higher amount than as paid by another purchaser at Flat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . year under appeal, on the basis of papers seized from Technical Director of Joint Venture partner M/s Mahalakshmi Infra-projects Limited, Pune during the action u/s 132( 4) held on. 24-09-2009 instead of allowing appellant's appeal by accepting undisclosed income offered by it for the asst. year 2009-10 & 2010-11 on the basis of papers seized from it's own premises during the course of search conducted on 23-10-2009 1.1 Ld. CIT(A) ought to have appreciated the fact that the Joint Venture/consortium agreement between appellant & it's partner M/s Mahalakshmi Infra-projects Limited was on work sharing basis & not on joint execution basis and as such the control & management of the partners over finance & administration is independent. 1.2 Ld. CIT(A) also erred in upholding the AO's baseless assertion in para 10.4.2 " Page No's 31, 28, 22, & 17 of bundles no.1 seized from residence of Shri. D.A. Bhat are infact documents of M/s B.T.Patil & Sons Belgaum Construction Pvt. Ltd. These documents were sent to Shri D.A. Bhat for the purpose of reconciliation as per periodical reconciliation is very important in these matters related to cash payments." The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on department of Government of Maharashtra undertaken by joint venture comprising of Mahalaxmi Infra Projects Pvt. Ltd. and B.T. Patil and sons, Belgaum Construction Company Ltd. The said seized documents contain details of total speed money paid in respect of Ghodzhari project upto 04-02-2009. The total speed money paid in respect of Ghodzhari Project as on 04-02-2009 amounts to ₹ 43,83,64,000/-. 50% of the above amounting ₹ 21,91,82,000/- relates to MIPL and the balance 50% of ₹ 21,91,82,000/- to B.T. Patil and sons, Belgaum Construction Company Ltd. MIPL and its JV partner B.T. Patil and sons, Belgaum Construction Company Ltd. admitted that ₹ 43,83,64,000/- is the total unexplained expenditure related to Ghodzhari project and their 50% share is ₹ 21,91,82,000/-. However, the assessee company and its J.V. Partner have declared additional income for A.Yrs. 2009-10 and 2010- 11 when the actual unexplained expenses relate to A.Yrs. 2007-08, 2008-09 and 2009-10. 16. The AO noted that it is the claim of the assessee company and its J.V. Partner that the unexplained payments mentioned in the documents seized from Shri D.A. Bhat, technical director of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to prove that speed money expenses are shared equally by the assessee company and B.T. Patil & sons. 17. The AO further noted that in respect of the search conducted at the assessee's premises, an excel file was found, the hard copy of which was printed and seized as bundle No.1 containing 17 pages. The entries in these pages reflected unexplained expenses as payable, which was contrary to the evidences seized at Shri Bhat's premises which showed that unexplained expenses were actually incurred and paid. The said file was created on 21-10-2009, i.e. two days prior to the date of search. Cash of ₹ 2 crores was deposited in Mahavir Cooperative Bank on 21-10-2009. The statement recorded on 23-10- 2009 u/s.132(4) of Shri B.B. Patil, Managing Director of the assesseecompany was a verbatim repetition of the statement of Shri R.D. Shinde, Managing Director of appellant's JV partner, Mahalaxmi Infraprojects Ltd. (statements reproduced at paragraph 9.5 of the assessment order) 18. The assessing officer was of the belief that all the above action was in consequence to prior information passed on to the assessee by its JV partner, Mahalaxmi Infraprojects Ltd. Therefore, since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Based on the above evidences, the assessing officer, worked out the year-wise allocation of the assessee's share out of the total speed money payments which is as under: A.Y.2007-08 A.Y.2008-09 A.Y.2009-10 Total Total speed money paid 550.35 lakhs 2981.35 lakhs 851.94 lakhs 4383.64 lakhs Assesee's share,i.e.50% 275.175 lakhs 1490.675 lakhs 425.97 lakhs 2191.82 lakhs 22. As against the above working, the AO observed that the assessee had disclosed unexplained expenses relating to Ghodzari Project for A.Yrs. 2009-10 and 2010-11 as under : A.Y. Additional income disclosed by the assessee towards unexplained expenses 2009-10 Rs.9,31,00,000/- 2010-11 Rs.12,60,82,000/- Total Rs.21,91,82,000/- 23. In view of the above, the AO held that unexplained expenses in the form of speed money payments should be taxed in the year of payment. According to the AO as per his analysis the speed money for A.Y. 2007-08 comes to ₹ 550.35 lakhs out of which share of the assessee company is ₹ 275.175 lakhs. He therefore asked the assessee to explain as to why the amount of ₹ 275.175 lakhs should not be added to the total income of the assessee. Similarly, he note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for reconciliation from time to time. According to the AO, there are irrefutable evidences to prove that the speed money payments have actually been made on the respective dates and are not projected expenses. Further there are evidences to prove that the speed money have been made at pre tender stage in order to get the contract allotted. Although Shri D.A. Bhat is the technical director, however, he is also involved in financial matters of the MIPL. The assessee has not submitted any supporting evidence in support of its contention that the said expenses have been paid after receipt of RA bills. According to the AO the paper/document should be read as a whole and all the contents of the papers are presumed to be true and correct unless contrary is proved. The assessee is accepting the figures of pages 39 and 40 but not accepting the dates of pages 39 and 40. Therefore, the contention of the assessee is contradictory. 27. As regards the contention of the assessee that Shri D.A. Bhat had retracted from his statement u/s.132(4) which according to him was given under tremendous mental tension and pressure the AO noted that the statement u/s.132(4) has immense evidentiary value. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the instant case, genuine seized documents are the ones seized from Shri D.A.Bhat and they prove that the speed money has been actually paid on the dates mentioned in the seized documents. 10.6.10. It is also pertinent to note that Page No's 9 to 12 seized from Shri D.A.Bhat relate to speed money payments of Rs.l,41,85,000/- in respect of Koyna Project. M/ s Mahalaxmi Infraprojects Ltd being 51 % shareholder in the said project has admitted 51% of Rs.l,41,85,000/- as its additional income for AY 2010-11. Based on the same documents, assessee company being 49% shareholder in Koyna Project has admitted 49% of Rs.l,41,85,000/- amounting to ₹ 69,50,650/- for AY 2010-11. When assessee has admitted additional income of ₹ 69,50,650/- on the issue of unexplained expenses related to Koyna project based on the documents seized from Shri D.A.Bhat. How can assessee contend that the documents seized from Shri D.A.Bhat depicting speed money payments related to Ghodzari project are incorrect and unreliable? As discussed above, seized documents can never be half true. They are either fully true or fully untrue. Just because evidences relate to earlier years which may attract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d penalty for AY's 2007-08 and 2008-09, assessee would have shifted the unexplained expenses to future years. 11.6. However, in view of concrete evidences as discussed in earlier paras of this order, unexplained expenses have to be taxed in the year of payment only. 11.7. To conclude, there are irrefutable evidences seized from residence of Shri D.A.Bhat to prove that the speed money payments have actually been made on the respective dates and by no stretch of imagination they are projected expenses. The evidences found at the business premises of assessee company showing the unexplained expenses as payable are fabricated evidences and they are sham documents. It is a settled law that fabricated evidences and sham documents do not have any evidentiary value. The evidentiary value of documents which are in the handwriting of Shri D. A. Bhat, correctness of which was acknowledged by him u/s.132 (4) cannot be underscored. 11.8 In the light of the foregoing discussion, unexplained expenses related to A.Y. 2007-08 amounting to ₹ 275.175 lakhs are hereby brought to tax." 28. Before CIT(A) it was argued that the assessee company and Mahalaxmi Infraprojects had formed a jo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee's premises were of superior evidence since the documents seized from Shri DA Bhat's residence did not have any evidentiary value and further these were never brought to the assessee's notice and the assessee was not allowed to rebut the assessing officer's presumptions regarding them. It was accordingly submitted that the additions made on the basis of documents seized from Shri D A Bhat's premises were erroneous and deserved to be deleted. 31. Alternatively it was contended that the assessing officer was not justified in taxing the additional undisclosed income offered on protective basis for assessment years 2009-10 and 2010-11 after shifting of such income to the earlier assessment years. 32. However, the CIT(A) was not satisfied with the explanation given by the assessee and upheld the action of the AO by observing as under : "28. I have given careful consideration to the contentions of the appellant with reference to the facts of the case. The issue regarding unexplained expenses in Ghodzhari project was dealt with by me exhaustively in the case of Mahalaxmi Infraprojects Ltd. Vide my appellate order No. No.KOP/661 to 667/11-12 dated 30/10/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal or retraction the earlier stated facts in most of the cases, may be conclusive and can be acted upon. Specific provisions of the Income-tax Act as contained under sections 132(4), 133A(5), etc., provide that statements recorded m the income-tax proceedings have evidentiary value. Though they have evidentiary value, yet they are not always conclusive proof. The Supreme Court in the case of Avadh Kishore Das v. Ram Gopal AIR 1979 SC 861 has held that evidentiary admissions are not conclusive proof of the facts admitted and may be explained or shown to be wrong, but they do raise an estoppel and shift the burden of proof on to the person making them. The Supreme Court further held that unless shown or explained to be wrong, they are an efficacious proof of the facts admitted. 59. In the instant case the explanation given by Shri D. A. Bhat was retracted by him vide a letter written to the Addl. DIT (Inv.) on 11/10/2009. Shri D. A. Bhat is an employee Director of the appellant company. This letter is written just a day before the final statement of Shri Ravindra D. Shinde, Promoter and Managing Director of the appellant company, was recorded u/s.132(4) on 12/10/2009. In the lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed plea of retraction of the assessee on the ground that neither the ground of coercion or duress nor the ground of involuntary statement was proved to have existed at the time of recording of the statement. This decision of the Tribunal goes to indicate that admissions or confessions made in the statements recorded during search or survey, without there being any other evidence to support such admissions, can successfully be made use of to assess the income, unless they are proved to be involuntary or are proved to have been taken under duress, coercion, misconception, etc. Further, instead of retracting initial statements or admissions in a bald manner, one has to bring on record cogent reasons or evidences, because In the absence of this even after retraction matters may be decided against him on the basis of initial statement itself. Generally, as compared to a subsequent statement whereby earlier admitted facts or positions are retracted, the first statement must be presumed to be more reliable for the reason that such was the statement which was recorded first in point of time and was made on the spot. Possibility of an afterthought or to concoct an explanation and fabr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shinde did not question the authenticity of documents in respect of the figures mentioned and written therein and accepted the same. In fact these documents have been relied upon to make claims about shifting of expenses incurred in respect of amounts recorded against an entity 'AB'. He merely stated that the impugned amounts in respect of Ghodzhari project related to financial years 2007 -08, 2008-09 and 2009-10, and that expenses pertaining to Koyna project related to the financial year 2009-10 for the reason that major amounts were realised from these projects when R.A. Bills were accepted and corresponding funds were released by the concerned authorities. That part of explanation of Shri Ravindra D. Shinde is found to be incorrect by the Assessing Officer with reference to the documents maintained by Shri D. A. Bhat. The assessing officer has elaborately and ably demonstrated, after a scrutiny of all the seized material at hand, the reasons for not accepting the explanation of Shri Ravindra D. Shinde. 63. As already mentioned, Shri D A Bhat is a trusted and loyal employee of the appellant company apart from being a close confidant of the Managing Director, Shri R D S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contains the details like identity of the persons who have made the payments on behalf of B T Patil and Sons and the dates on which the payments were made. It also gives the balance of payment as on 14/04/2007. Page 17 has similar contents as on page 28. This was faxed by B T Patil and Sons to Shri D A Bhat and it shows the state of affairs of various payments as on 18/07/2007. Page 16 is a summary sheet of payments made by the partners in the joint venture as on 28/01/2008. As against these overwhelming evidences, the appellant merely states that the payment of ₹ 43 crores is highly unreasonable. Shri Shinde dismissed the evidence gathered during the course of search which shows that expenses have been incurred during the previous year relevant to assessment years 2007-08, 2008-09 and 2009-10 to the tune of ₹ 2191.82 lakhs (50% of total expenses of ₹ 4383.64 lakhs) and made a disclosure of additional income for the previous years relevant to assessment years 2009-10 and 2010-11 of ₹ 1801. 19 crores only. In view of the discussion above and the reasons mentioned in paragraphs 7.14 on pages 12- 13 of the assessment order for the assessment year 2010-11 (corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible for keeping a detailed record on all monetary transactions undertaken on behalf of the joint venture. As per the terms of joint venture, both the members in the joint venture were entitled to 50% of all receipts. It is also evident from the papers seized that both joint venture partners were equally responsible to incur the incidental expenses in equal measures. The statements of Shri D A Bhat are corroborated by undisputable evidences which depict the amount of payments, dates of the payment, details of the payer and recipients. The documents seized from Shri Bhat's residence reflect that the appellant had sent speed money statements to Shri D A Bhat for reconciliation from time to time. It is also a fact that the Director of the appellant's company Shri B B Patil and the Director of Mahalaxmi Infraprojects Ltd, Shri R D Shinde have admitted to payment of speed money under section 132(4) on the strength of the papers found in the premises of Shri D A Bhat. However, for the purpose of allocating it to respective assessment years, both partners in the joint venture synced in unison and say that the amounts were payable or paid in the previous years relevant to assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The evidences found in the residence of one of the Directors in the joint venture to whom part of Ghodzhari Project was awarded and on whose behalf speed money was paid to various persons viz. Shri D A Bhat, overwhelmingly overrule the evidentiary value of the documents found in the premises of the appellant who was one of the partners m the joint venture. The evidence found with the appellant is non-contemporaneous and appears to be prepared from the documents seized earlier. Moreover, they have been prepared after the original search has taken place. Therefore, the dates, figures etc. were more prone and liable to be manipulated than the original contemporaneous documents found from the residence of the Director of the joint venture of which the appellant is a partner. Under these circumstances, I hold that the evidentiary value of the documents seized from the appellant's residence is inferior than the evidentiary value of the documents seized from the residence of one of the Directors of the joint venture of which the appellant is a partner. The evidences created by the appellant are unreliable and are meant to create confusion and obstruct the judicial process. 34. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement he submitted that Shri Bhat in his answer to question no. 4 has stated that an expenditure of 10 to 12% of contract value is incurred to get the contract and immediately in answer to question no. 5 has stated that an expenditure of 6-7% of the contract value is incurred to get the contract. Therefore, such self contradictory statement cannot be relied upon. This reflects the mental pressure and state of mind of the person giving the statement which cannot be relied upon. 36. He submitted that at the end of the statement Shri D. A. Bhat has nowhere certified that the statement is not under mental tension and pressure nor any such question was put forward. Further, the statement of Shri D. A. Bhat has no evidentiary value since the same was not recorded in front of any witness. There is no signature of any witness to the said statement appended anywhere in the statement clearly demonstrates the same. Further the said statement has been retracted immediately within a gap of 18 days and the AO has failed to record any further statement of the said Shri D. A. Bhat after the retraction letter to prove that the earlier statement on 23/09/2009 was true. He submitted that Shri D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pers No. 17, 22, 28 and 31 found at the premises of Mr. D. A. Bhat and alleged by the AO that they belong to assessee and were sent by assessee for reconciliation nowhere mentions the name of the assessee as the sender. It is a mere unproved allegation and presumption. 39. As regards the allegation of the AO that the assessee was aware that search action was going to take place at its premises consequent to the search at MIL and hence the papers found at assessee's premises are fabricated, he submitted that it is the settled position that consequential search takes place immediately and not after a period of one month as in the case of assessee. If the assessee was aware that search action is going to take place at its premises it would have destroyed all the evidence of unexplained expenditure rather than fabricating them as alleged by the AO. Further no cash would have been found nor it would have opened a bank account and deposit substantial cash in it. It is against all human probability. He submitted that even otherwise as per provisions of section292C of the Act it is settled proposition of law that when any document is found in course of search the same is presumed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwise. The papers found at the assessee's premises are supported by the statement of the director of the assessee company and cash found in the bank and premises of the assessee. He accordingly submitted that the said undisclosed income ought to be assessed in the A.Yrs. 2009 - 2010 & 2010 - 2011 as offered by the assessee as against spread over by the AO in A.Yrs. 2007-08, 2008-09 and 2009-10. 43. The Ld. Departmental Representative on the other hand heavily relied on the order of the AO. 44. We have considered the rival arguments made by both the sides. We find identical issue had come up before the Tribunal in the case of the Joint Venture partner of M/s. Mahalaxmi Infra Projects Ltd. We find the tribunal after considering the rival submissions made by both the sides upheld the action of the AO at para 97 of the order in ITA Nos. 2571 to 2577/PN/2012 and ITA Nos. 50 to 56/PN/2013 for A.Yrs. 2004-05 to 2010-11 order dated 09-12-2015. The relevant observation of the Tribunal reads as under : "97. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We find in the instant c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. Departmental Representative also candidly admitted that no such exercise has been done either by the Investigation Wing after the search or by the AO during the course of assessment proceedings. Therefore, it is not correct to hold that the payments noted on the seized papers indicate speed money/bribe paid by the assessee company to various persons. However, considering the presumption laid down in section 132(4A) of the I.T. Act, since these papers are found with the assessee company, therefore, the AO is justified in holding that the assessee company has paid the amount noted on the seized papers and the CIT(A) is justified in upholding the addition. In this view of the matter and in view of the detailed reasoning given by the CIT(A) we uphold the order of Ld.CIT(A) on this issue and the grounds raised by the assessee are dismissed." 45. Since a view has already been taken in the case of one of the Joint Venture partner, therefore, the same view has to be followed in the case of the other Joint Venture partner. Therefore, respectfully following the order of the Tribunal (to which both of us are parties) we uphold the order of the CIT(A) on this issue. Grounds raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. Vs. CIT and CIT Vs. Bharat Rasayan Ltd. reported in 343 ITR 89 submitted that netting of interest is permitted for deduction u/s.80HHC. Referring to the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Ramchandra S. Patel reported in 41 taxmann.com 446 he submitted that the Hon'ble High Court has decided the issue in favour of the assessee and dismissed the appeal filed by the revenue by holding that interest earned on deposit is to be included for the purpose of working of deduction u/s.80IA. He accordingly submitted that netting should be allowed for deduction u/s.80IA. 52. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). 53. After hearing both the sides, we find merit in the submission of the Ld. Counsel for the assessee that netting of interest should be allowed for computation of deduction u/s.80IA in the light of the ratio of the decision of Hon'ble Supreme Court in the case of ACG Associated Capitals Vs. CIT. We accordingly set aside the order of the CIT(A) and direct the AO to recompute the deduction u/s.80IA by netting the interest. Ground raised by the assessee is accordingly allowed. 54. Ground of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. It was explained that after adjustment of bills received from the sub contractors, i.e., Sunil Construction and Ashok Chipre balance amounts continued to remain as advance since 2001-02 and 2002-03. It was argued that the assessee had substantial own funds in the form of reserves and surplus and the payments made by it formed part of such funds. The assessee filed a statement showing amounts paid, bills adjusted and the balance amounts in respect of the sub contractors. The statement of net worth from 1999-2000 to 2000-01 was also filed before CIT(A) which is as under : Asstt. Year Share capital Reserve & surplus Total net worth 99-2000 500.00 983.05 1483.05 2000-01 500.00 1255.43 1755.43 2001-02 500.00 1874.87 2374.87 2002-03 500.00 2242.53 2742.53 2003-04 500.00 1683.36 2183.36 2004-05 500.00 1041.37 1541.37 2005-06 500.00 1572.03 2072.03 2006-07 500.00 1889.88 2389.88 2007-08 500.00 2348.49 2818.49 2008-09 500.00 2578.11 3078.11 2009-10 500.00 2999.86 3499.86 2010-11 500.00 5265.83 5765.83 It was accordingly argued that no disallowance of proportionate interest on diversion of funds for non business purpose is called fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractors namely Sunil Construction and Ashok Chipre since 2001-02 and 2002-03 and therefore disallowance, if any, could have been made in those years and not in this year also could not be controverted by the Ld. DR. Further the finding given by the Ld.CIT(A) that the own capital and free reserves of the assessee company is much higher than the amount of advances given and no interest bearing funds were utilized to carry the load of these advances in the future years also could not be controverted by the Ld. Departmental Representative. In view of the above and in view of the detailed reasoning given by Ld.CIT(A) while deleting the addition and in absence of any contrary material brought to our notice by the Ld. Departmental Representative we do not find any infirmity in the order of Ld.CIT(A). Accordingly, we uphold the order of the CIT(A) on this issue. The ground raised by the revenue is accordingly dismissed. 64. Ground of appeal No.3 by the Revenue reads as under : "3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction on account of proportionate interest on investment in non business activities of ₹ 11,20,935/-." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance Utilities and Power Ltd. 221 CTR 435 (Born). Following this verdict of the Hon 'ble jurisdictional High Court, we hereby affirm the view of the learned CIT(A), this part of the ground of the revenue is therefore, dismissed. Respectfully following the above decision of the Honourable ITAT, Pune, the addition made for the years under consideration also is deleted. This ground of appeal is therefore, allowed." 68. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 69. After hearing both the sides we do not find any infirmity in the order of the CIT(A) who has deleted the addition based on the order of the Tribunal in assessee's own case for A.Yrs. 2003-04 to 2006-07. Since admittedly the own capital and free reserves of the assessee company are far more than the investment in group companies, therefore, respectfully following the order of the Tribunal in assessee's own case for A.Yrs. 2003-04 to 2006-07 and in absence of any contrary material brought to our notice against the order of CIT(A) we find no infirmity in the order of the CITA) deleting the disallowance made by the AO. Accordingly, the ground raised by the revenue is dismissed. 70. Gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07/04/2010 for assessment years 2003-04 to 2006-07 and had decided in favour of the appellant. The relevant portion of this order is reproduced below: ............ Considering the facts and figures and the availability of own funds, the impugned amounts advanced to the said three parties can be said to be out of assessee's own funds, hence, there was no necessity for invoking the provisions of section 36(1)(iii) for such disallowance. The action of the A.O was reversed and the view taken by the learned CIT(A) is hereby affirmed. This ground of the revenue is dismissed. Respectfully following the above decision of the Honourable ITAT, Pune, the addition made for the years under consideration also is deleted. This ground of appeal is therefore, allowed." 74. Aggrieved with such order of the CIT(A) the revenue is in appeal before us. 75. After hearing both the sides we do not find any infirmity in the order of the CIT(A). Admittedly the own capital and free reserves of the assessee company are far more than the advances given to various parties for non business purposes. Identical issue has already been decided by the Tribunal in assessee's own case for A.Yrs. 2003-04 to 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing deduction on account of u/s.80IA(4) of ₹ 2,38,71,620/- which was earlier confirmed by the Ld.CIT(A) for A.Y. 2000-01 & 2001-02 as the assessee is only work contractor and not a developer as per the explanation below 80IA(13). 6(b) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing additional deduction u/s.80IA(4) of the additional deduction 80IA(4) of ₹ 2,80,04,066/-, which is the additional income declared during the course of search proceedings, on account of expenses from unexplained sources which attract provisions of S.69C of the I.T. Act which is not an income from the business undertaking referred in section 80IA(4)." 81. Facts of the case, in brief, are that the AO during the course of assessment proceedings noted that the assessee in the return of income has claimed deduction u/s.80IA of the Act amounting to ₹ 2,38,71,620/-. The AO asked the assessee to explain as to why the deduction u/s.80IA(4) should not be disallowed. It was submitted by the assessee that it has developed different infrastructural facilities in irrigation/water supply/hydro electric power generation projects during the impugned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply 5 Koyna Hydro Power Project Power Generation & Irrigation 6 Koyna Hydro Power Project (for supply, erection & maintenance of crest gates & other embedded parts) Power Generation & Irrigation 7 Koyna Hydro Power Project (for supply & erection of EOT Cranes & electrically operated hydraulic hoists etc.) Power Generation & Irrigation 84. It was explained that for developing the above infrastructure projects the assessee had invested in technical expertise, manpower, material and machinery. The assessee was responsible for risks involved in the process of development of infrastructure projects. Bank guarantees were provided by the assessee as security. Own funds and borrowed funds were utilized in development of these projects. Relying on the decision of the Jaipur Bench of the Tribunal in the case of Om Metals Infra projects Ltd. reported in (2009) 26 DTR (JP)(Trib) 359 and the decision in the case of ABG Heavy Industries Ltd. reported in 322 ITR 323 it was argued that the assessee is entitled to claim deduction u/s.80IA(4). 85. Further, the assessee during the course of appeal proceedings raised certain claim of deduction u/s.80IA(4) in respect of the additional inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant therefore urged that these fresh claims be considered and allowed in appellate proceedings in view of the decision in the case of Goetze (India) Ltd. Vis CIT (2006) 284 ITR 323 (SC). I have gone through the submissions made by the appellant. In connection with the admissibility of the additional ground the Hon 'ble Bombay High Court has explained the decision given in the case of Jute Corporation of India Limited v. CIT [1991] 187 ITR 688 (SC) in CIT, Central-I v. Pruthvi Brokers & Shareholders (P.) Ltd. [2012] 23 taxmann.com 23 (Bombay) and held- (B) It is clear, therefore, that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. 85. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgment. In fact, the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgment does not impinge on the power of the Tribunal under section 254. [Emphasis Supplied by me.] 86. Thus it is clarified that the decision in Goetze India (supra) was limited to the power of the assessing authority to entertain a claim for deduction otherwise than by a revised return and did not impinge on the powers of the appellate authorities. I have already referred to the decisions in Additional Commissioner of Income-tax v. Gurjargravures P. Ltd., [1978] 111 ITR 1 (SC), Jute Corporation of India Limited v. CIT [1991] 187 ITR 688 (SC), Amalgamated Electricity Company Limited v. Commissioner of Income-tax, [1974] 97 ITR 334 (Bom)(FB), and National Thermal Power Company Limited v. CIT [1998] 229 ITR 383 (SC) which clearly uphold the principal enunciated in the case of CIT v. Kanpur Coal Syndicate[1964] 53 ITR 225 (SC), in which the Hon'ble Supreme Court held as under- "If an appeal lies, Section 31 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include Chapter VIA of the said Act while computing the undisclosed income for the block period then the respondent assessee is entitled to claim deduction from its income under section 80IB of the Act. The ratio of this decision applies unequivocally to the provisions of section 153A. Similarly, the Honourable Gujarat High Court in the case of Suman Paper and Boards Ltd. [2009] 314 ITR 119 has held that deduction under section 80IA is available in respect of undisclosed incomes also. Similarly, in the case of Medicor Laboratories Put. Ltd. ITA No. 402/ PN/ 2009, the Honourable Pune Tribunal has upheld the allowability of deduction under Chapter VI A in respect of all additions to the income made in assessment when there was no specific finding that income was required to be taxed under any head other than 'business income'. Hence, the additional claim is allowed. However, the assessing officer is directed to check the computation of the claim and then allow the same. 88. Regarding the claim of the appellant in respect of entitlement of deduction under section 801A(4) in respect of additional income offered for assessment years 2009-10 and 2010-11, I hold that the claim i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red during the course of search proceedings is concerned the Ld. Departmental Representative submitted that the additional income so declared is on account of expenses from unexplained sources which attract provisions of section 69C. Therefore, the CIT(A) was not justified in allowing deduction u/s.80IA(4) on such additional income. He accordingly submitted that the order of the CIT(A) be reversed and that of the order of the AO be restored. 92. The Ld. Counsel for the assessee on the other hand heavily relied on the order of CITA) and the decision of Hon'ble Bombay High Court in the case of ABG Heavy Industries (Supra) and the decision of Pune Bench of the Tribunal in the case of Mahalakshmi Infra Projects Ltd.(Supra). He also relied on the decision of the Tribunal in assessee's own case for A.Y. 2001-02 vide ITA Nos. 1408/PN/2003 and 1409/PN/2003 order dated 28-02-2013 where Tribunal following the decision of Hon'ble Bombay High Court has allowed the claim of deduction u/s.80IA(4). He accordingly submitted that this being a covered matter in favour of the assessee, the grounds raised by the revenue should be dismissed. 93. We have considered the rival arguments made by both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es makes the assessee a party to the main contract work itself and which clearly shows that the assessee on their own right are contractors and not just sub contractors as normally understood. The assessee is the contractor vis-a-vis the portion allotted to them and not only subcontractors, i.e. a direct party to the main agreement. The assessee has entered into a main agreement, in their own right, can claim the benefit of section 80IA. As the assessee being directly under contract to the concern for the work done and are also directly dealing with the Government on whose behalf the assessee are doing the work, they can be considered as main contractors alongwith PEC and are not simply sub contractors vis-a-vis the work undertaken by them. As such the assessee is otherwise fulfilling all the conditions they are entitled to deduction under the provisions of section 80IA. Similar view has been taken by ITAT Indore in the case of Ayush Ajay Construction Ltd. vs ITO 79 ITD 213, wherein the entire project was assigned by the party getting the tender to another company. In such circumstances the ITAT Indore, has held as under: "It is a settled position of law that that while cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled down, by laying stress on ambiguity here and there. If it was proved that, the assessee-company had obtained the status of a tenderer by virtue of a valid assignment, it should not be denied the benefit of deduction provided by the Central Government through introduction of sub-section (4A) of section 80 IA. The action of "A" and the assessee could only be termed as a valid tax planning which was permissible under the law. Therefore, the assessee had fulfilled the requirements provided in section 80IA (4A)(ii) for claiming deduction, and, therefore, the Assessing Officer should have allowed the deduction claimed by the assessee company. 13. It was further clarified on behalf of the assessee that with regards to Bhima Sina Link Tunnel project, the Original Agreement is between the owner and Joint Venture from consisting of the assessee company and M/s.Swapnali Constructions which was formed to Share the work in 60% & 40%. M/s.Swapnali Constructions expressed their inability to undertake the work and had transferred their share of 40% of work to the assessee company on Back to Back Agreement basis for a consideration vide agreement dated 28/04/97. Thus the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allow deduction u/s.80IA(4) of the Act to the assessee with regard to the projects in question for both the years. The matter is disposed off accordingly." 94. So far as ground of appeal No.6(b) is concerned, we find the same also stands decided in favour of the assessee by the decision of the Tribunal in the case of Mahalaxmi Infra Projects Ltd. vide ITA Nos.2571 to 2577/PN/2012 and ITA Nos. 50 to 56/PN/2013 for A.Yrs. 2004-05 to 2010-11. We find the Tribunal in the consolidated order dated 09-12-2015 (to which both of us are parties) has decided the issue in favour of the assessee by observing as under : "127. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee, in the return filed in response to notice u/s.153A, had claimed deduction u/s.80IA(4) amounting to ₹ 7,88,92,588/-. During the course of assessment proceedings apart from reiterating the deduction u/s.80IA(4) as claimed in the original return the assessee also claimed deduction u/s.80IA(4) in respect of additional income so decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A, one of the conditions imposed was that the enterprise must start operating and maintaining the infrastructure facility on or after 1st April, 1995. The same requirement is embodies in sub-cl. (c) of sub-sec. (4) of the amended provisions of sec. 80-IA. On this basis, it was urged that since the assessee was not operating and maintaining the facility, he did not fulfil the condition. This submission is fallacious both in fact and in law. As a matter of fact, the Tribunal has entered a finding that the assessee was operating the facility and this finding has been confirmed earlier in this judgment. That the assessee was maintaining the facility is not in dispute. The facility was commenced after 1st April, 1995. Therefore, the requirement was met in fact. Moreover, as a matter of law, what the condition essentially means is that the infrastructure facility should have been operational after 1st April, 1995. After sec. 80-IA was amended by the Finance Act of 2001, the section applied to an enterprise carrying on the business of (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining any infrastructure facility which fulfils certain conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said decision of the Hon'ble High Court assessee who only develops infrastructural facility (even as a contractor) but does not have an occasion to operate and maintain is also eligible for claim of deduction u/s 80-IA(4) of the Act. The Hon'ble High Court has been pleased to observe that qua such a person the condition stated in sub-section (c) of sec.80-IA(4)(i) has to be read harmoniously with the main provision under which deduction is available to an assessee, who develops; or operates and maintain; or develops, maintains and operates an infrastructural facility. In other words a developer who only develops (i.e., constructs) an infrastructural facility is not envisaged to operate and maintain such facility, cannot be accepted to fulfil the condition in clause (c) of sec. 80-IA(4) since it would be an impossibility. Therefore, in view of the construction placed by the Hon'ble Bombay High Court on the requirements of clause (c) of sec. 80-IA(4)(i) requiring it to be harmoniously read with the main sec. 80-IA(4), we do not find substance in the objection raised by the Revenue. We thus respectfully following the decision of the Hon'ble Bombay High Court on the issue in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions. In this case, search u/s 132(1) of the Act was carried out on 18.12.2008. On the basis of the second proviso to section 153A(1) of the Act, which reads as under :- "Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate." In the present case, the assessments which are pending on the date of initiation of search are for assessment years 2007-08 and 2008-09, and thus such assessments abate. Before us, the Ld. Counsel for the assessee conceded that assessments for assessment years 2003-04 and 2006-07 were not pending on the date of initiation of search and thus the same do not abate as per the aforesaid proviso to section 153A(1) of the Act. The aforesaid position is not disputed by the Revenue also. 10. In the above undisputed fact situation, now we may examine the scope of assessments to be made u/s 153A(1)(b) of the Act for the assessment years 2007-08 and 2008-09, which have abated and for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cs Ltd. (supra), in so far as assessment years 2007-08 and 2008-09 are concerned, the Assessing officer retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A of the Act. In this context, the preliminary issue is as to whether the scope of assessments u/s 153A(1)(b) of the Act for assessment years 2007-08 and 2008-09 can include consideration of assessee's plea to exclude income on account of retention money, considering the fact the returns of income filed by the assessee for assessment years 2007-08 and 2008-09 u/s 139(1) of the Act did not contain any such claim. In the assessments u/s 153A(1)(b) of the Act, assessee claimed that income on account of retention money be excluded in the years when the customers had withheld the retention money and instead tax it in the year of its actual receipt. No doubt, the said claim does not pertain to any incriminating material found in the course of search, so however, on account of the fact that the Assessing Officer retains his original jurisdiction as well in the assessments for the years 2007-08 and 2008-09 to be made u/s 153A(1)(b) of the Act, in our considered opinion, as the following discussion would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut was submitted by way of a letter during the assessment proceedings and therefore following the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT, (2006) 284 ITR 323 (SC), the Assessing Officer was justified in not entertaining such a claim. 15. On this aspect, the learned counsel for the assessee pointed out that in the return of income submitted in response to notice u/s 153A(1)(a) of the Act, assessee had enclosed a Note dated 14.09.2009, a copy of which has been placed in the Paper Book at page 1 to 2, putting-forth its claim for excluding income on account of retention money, but in the computation of income no specific claim was made because the quantification of the claim could not be made in the limited time period allowed to file a return in response to notice u/s 153A(1)(a) of the Act. In the course of the subsequent assessment proceedings, assessee quantified the claim for the respective assessment years and also filed copies of the agreements with the customers which contained the relevant clauses permitting retention of a portion of the contract value. It is pointed out that strictly speaking the judgement of the Hon'ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have carefully considered the rival submissions. The Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) opined that a fresh claim of the assessee can be entertained at the time of assessment only if it is made by way of a revised return of income; and, the aforesaid proposition has been invoked by the income-tax authorities in the present case to deny assessee's claim for exclusion of income on account of retention money, a claim which was made during the assessment proceedings. 19. Factually speaking, we find that in terms of a communication dated 14.09.2009 filed along with the return of income filed in response to notice issued u/s 153A(1)(a) of the Act, assessee inter-alia, stated as under :- "The business of our company is to execute construction contracts. In respect of some of the contracts executed by the company there is a clause in the contract which entitles the customer to retain between 5% to 10% of contract value till the completion of defect liability period contained in the contract which is generally between 12 to 24 months after the completion of the construction. Inadvertently in the original return filed this amount was not exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income itself, though the quantification was absent, and the actual quantification of such claim was made during the assessment proceedings; thus, substantively speaking it cannot be said that assessee made a new claim during assessment proceedings which was not made in the return of income. Considering the above fact situation, in our view, the CIT(A) erred in upholding the action of the Assessing Officer in refusing to entertain the impugned claim based on the judgement of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra). 21. In any case, the judgement of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) does not impinge on the powers of appellate authorities to entertain a fresh claim which was hitherto not preferred by the assessee in the return of income, as explained by the Hon'ble Delhi High Court in the case of Jai Parabolic Springs Ltd. (supra). Accordingly, there was no impediment for the CIT(A) to have entertained the impugned claim especially when the required facts to adjudicate the controversy were already on record. 22. Thus, considered in the aforesaid light, we find no justification for the Revenue to reject a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d we find the same issue has also to be decided in favour of the assessee. It is an admitted fact that the assessee company has debited non genuine expenditure in its books of account and generated cash, a fact which has been accepted by the AO in the assessment order. Therefore, the contention raised by the revenue in the grounds of appeal that the addition on account of expenses from unexplained sources attracts provisions of section 69C and therefore the assessee's income is not income from business of undertaking referred to in section 80IA(4) in our opinion is incorrect. The AO in the assessment order has accepted that the assessee company has debited non genuine expenditure in its books of account. Therefore, once the non genuine expenditure is disallowed correspondingly the business income of the assessee increased on account of disallowance of such expenditure. Therefore, in that event, the deduction u/s.80IA(4) has to increase correspondingly. The decisions relied on by the Ld. Counsel for the assessee on this issue support the case of the assessee where it has been held that if the income goes up because of the addition made in the assessment, the deduction u/s.10A or Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade because of the statutory provisions - Section 43B in the case of the employer's contribution and Section 36(v) read with Section 2(24)(x) in the case of the employee's contribution which has been deemed to be the income of the assessee. The plain consequence of the disallowance and the add back that has been made by the Assessing Officer is an increase in the business profits of the assessee. The contention of the Revenue that in computing the deduction under Section 10A the addition made on account of the disallowance of the Provident Fund / ESIC payments ought to be ignored cannot be accepted. No statutory provision to that effect having been made, the plain consequence of the disallowance made by the Assessing Officer must follow. The second question shall accordingly stand answered against the Revenue and in favour of the assessee." 134. Similarly, the Hon'ble Bombay High Court in the case of CIT Vs. Sheth Developers (P) Ltd. vide ITA No.3724/2010 order dated 27-07- 2012 has held as under : "2. The appellant has formulated the following questions of law for consideration of this court. (1) Whether on the facts and circumstances of the case and in law the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Act. Further, CIT(A) held that in terms of clause (a) of the explanation to Section 158(BB)(1) of the said Act provides that undisclosed income for the block period is to be computed after applying the relevant provisions of the said Act. This would include the provisions of Chapter VIA of the said Act. Section 80IB is a part of Chapter VIA of the said Act. On examination of the evidence the CIT(A) held that the respondent was entitled to the benefit of Section 80IB of the said Act and directed the Assessing officer to recompute the tax payable for the block period 1/4/1995 to 21/2/2002 under Section 158BB of the said Act after giving the benefit of Section 80IB of the said Act. (c) On appeal by the revenue the Tribunal by order dated 12/10/2009 upheld the order of the CIT(A).On merits, the Tribunal held that the benefit of deduction under Section 80IB of the said Act would be available in respect of undisclosed income which is being offered to tax for block period under Chapter XIVB of the said Act in view of retrospective amendment to the explanation to sub section (1) of Section 158BB of the said Act. The Tribunal relied upon the decision of the Madras High Court in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BB(1) of the said Act, the deduction under Section 80IBof the said Act (which is admittedly a part of Chapter VIB of the said Act) is to be allowed for determining the undisclosed income under Chapter XIVB of the said Act. 9. Before considering the rival submissions, it would be convenient to reproduce the amended Explanation to sub section (1) of Section 158BB of the said Act which reads as under: "Explanation- For the purposes of determination of undisclosed income- (a) the total income or loss of each previous year shall, for the purpose of aggregation, be taken as the total income or loss computed in accordance with the provisions of [this Act] without giving effect to set off brought forward losses under Chapter-VI or unabsorbed depreciation under sub-section (2) of Section 32; [Provided that in computing deductions under Chapter VI-A for the purposes of the said aggregation, effect shall be given to set off of brought forward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32;]" It would be pertinent to note that the words "this Act" in parenthesis were substituted by the Finance Act of 2002 with retrospective effect from 1/7/1975 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofits and gains of business or profession. Therefore, the reliance by the revenue upon the decision of the Gujrat High Court in the matter of Fakir Mohmed Haji Hasan (supra) is not correct as the facts of that case are completely distinguishable from the present facts. In the present case, no question of application of section 68,69 and 69A, 69B and 69C of the said Act arises as the same has not been invoked by the Department. It is an admitted position between the parties as reflected even in the order the Assessing officer that undisclosed income was in fact received by the respondent in the course of carrying out its business activities as a builder. The same was returned by the respondent as income arising from profits and gains of business or profession and the same was accepted by the department unlike in the matter of Fakir Mohmad Haji Hasan (supra). 12. In view of the above the order dated 12/10/2009 of the Tribunal cannot be faulted. Therefore, question (1) above is answered in the affirmative in favour of the respondent-assessee and against the appellant-revenue. Question (2) is answered in the affirmative in favour of the respondent-assessee and against the appellant-r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this view of the matter and in view of the detailed reasoning given by the CIT(A) on this issue we find no infirmity in his order. Accordingly, the same is upheld. However, as per the additional ground raised by the assessee, there seems to be some calculation error while computing the deduction u/s.80IA(4). We, therefore, direct the AO to recompute the correct deduction as per law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground raised by the Revenue is accordingly dismissed." 95. Since the facts of the instant case are identical to the facts in the case of Mahalakshmi Infra Projects Ltd. (Supra), therefore, following the decision of the Tribunal in the case of Mahalakshmi Infra Projects Ltd. (Supra), we uphold the order of the CIT(A) on this issue. The grounds raised by the Revenue are accordingly dismissed. 96. Grounds of appeal No.7 & 8 being general in nature are dismissed. ITA No.229/PN/2013 (A.Y. 2008-09) (By Assessee) : 97. Grounds of appeal No.1 to 1.4 by the assessee are as under : "1.0 On the facts and in law, Ld. CIT(A), Kolhapur eared in confirming the shifting of undisclosed income for the asst. years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "Having allowed the deduction u/s.80IA(4) in respect of profit earned by the assessee form development of infrastructure facilities, CIT(A) was not justified in rejecting such deduction in respect of interest income of ₹ 25,90,058/- received from Bank Guarantee deposits given to the project authorities, in respect of such projects. 101. After hearing both the sides, we find the above ground is identical to ground of appeal No.3 in ITA No.228/PN/2013. We have already decided the issue and the ground raised by the assessee has been partly allowed for statistical purposes. Following similar reasonings, this ground by the assessee is allowed for statistical purposes. 102. Ground of appeal No.4 by the assessee reads as under : "Ld.CIT(A) not justified in confirming the addition of ₹ 8,17,500/- made by AO on the basis of evidence seized from premises of technical director of Mahalakshmi Infra-projects during the course of assessment proceedings stating that those were not considered during the course of search." 103. Facts in brief, are that during the course of assessment proceedings the AO noted that the assessee had failed to consider various expenses incurred as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose papers and diaries from Shri D.A. Bhat's residence. iv. Page No. 7 is an estimation of cost which do not have any final implication. 98. I have gone through the contents of pages no. 1 to 5 and 7 of the seized material. Page no. 1 is a summary of payments made to various persons, the total of which is ₹ 3.35 lakhs. Page no. 2 is again a summary of payments made to various persons aggregating to ₹ 2.95 lakhs. Page no. 3 shows various expenses incurred on hotel, gold purchases, plywood purchase, mobile bills of Naveen, Dynapac list etc., which aggregate to ₹ 12,94,772/-. Page no. 4 contains details of expenses incurred by both Mahalaxmi Construction Corporation Ltd. and B T Patil and Sons and the receivable position as on 11/07/2007. The contents on page no. 5 arc details of various expenses including those which are written as 'K' expenses. The total of 'K' expenses is ₹ 26,13,500/- which is incurred on various dates between 26/12/2008 to 24/01/2009. Page no. 7 contains working of interest payment on purchase of tender documents, bank guarantees for EMDs, FDs to be kept for EMDs and EMDs required for procuring mobilization advances. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n dismissed. Following the same reasoning the above ground by the revenue is dismissed. 113. Ground of appeal No.3 by the Revenue reads as under : "3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing addition on account of proportionate interest on advances for non business purposes of ₹ 10,67,853/-." 114. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.4 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning this ground by the revene is dismissed. 115. Ground of appeal No.4 by the Revenue reads as under : "4. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing addition on account of pooja expenses of ₹ 74,062/-." 116. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.5 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been allowed. Following the same reasoning this ground by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese matters related to cash payments." The appellant submits that no opportunity of the hearing was given by the AO with regard to these presumptions. 1.3 Ld. CIT(A) was not justified in concurring with the finding of the AO rejecting the evidence in the form of loose papers seized at the office premises of the appellant holding on mere ipse dixit that such evidence is fabricated. 1.4 Ld. CIT(A) erred in confirming the presumption made by AO in shifting the undisclosed in come to earlier years on the basis of evidence seized from a third party." 121. After hearing both the sides we find the above grounds are identical to grounds of appeal No. 1 to 1.4 in ITA No.228/PN/2013 for A.Y. 2007-08. We have already decided the issue and the grounds raised by the assessee have been dismissed. Following the similar reasonings the above grounds by the assessee are dismissed. 122. The Ld. Counsel for the assessee did not press ground of appeal No.2 for which the Ld. Departmental Representative has no objection. Accordingly, this ground is dismissed as 'not pressed'. 123. Ground of appeal No.3 by the assessee reads as under : "Having allowed the deduction u/s.80IA(4) in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "102. The contention of the appellant cannot be entertained. There is nothing in section 153A or section 139 which allows the assessing officer to extend the time limit for filing of income-tax returns during the regular course. If the contention of the appellant is accepted then, even if the appellant had not filed a return of income for any of the six years contemplated under sections l53A or 153C, the time limit for filing of return of income for all those years would be automatically extended and the same would have to be considered as return filed under section 139 and therefore, all natural consequence under the Act, including the provisions of carry forward and set off of various types of losses would become applicable. It would leave no distinction between the non-filer and a regular filer of return and would result in allowing unprescribed benefits to a delinquent assessee. Therefore, it is held that in respect of the assessment year 2009-10, the appellant should have filed the return of income on or before 31/10/2010. Since this was not done, the appellant was liable to pay interest under section 234A and the same has been rightly charged. This ground of appeal is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest under section 234A from the date of expiry of the notice period given in the notices under section 153A without noting that charging of interest under section 234A is compensatory and that as per the provisions of section 80AC, the assessees ought to have filed returns of income within the due date under section 139(1) and hence the provisions of section 234A(1) is applicable. It is also the case of the Revenue that the Commissioner of Income-tax(Appeals) has failed to note that the order of the Income-tax Appellate Tribunal, B-Bench, Chennai in the case of Dr. V.Jayakumar vs. ACIT, Circle I, Madurai, in ITA Nos.520 to 529(Mds)/2010 is not applicable to these cases since the facts are distinguishable. In the case of Dr. V.Jayakumar, the assessee had paid taxes much before filing the return, whereas in the present cases the assessees have paid taxes under section 140A. The returns of income filed by the assessees on 23-9-2011 cannot be equated with the returns of income required to be filed under section 139(1). It is the case of the Revenue that the assessees have committed default both under sections 234A(1) and 234A(3). It is true that the jurisdictional Tribunal at Chennai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2 by the revenue reads as under : "2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing addition on account of proportionate interest on advances for non business purposes of ₹ 7,83,462/-." 139. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.4 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning this ground by the revenue is dismissed. 140. Ground of appeal No. 3 by the revenue reads as under : "3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing addition on account of pooja expenses of ₹ 78,457/-." 141. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.5 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been allowed. Following the same reasoning this ground by the revenue is allowed. 142. Ground of appeal No. 4(a) and 4(b) by the revenue reads as under : "4(a) On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s 31, 28, 22, & 17 of bundles no.1 seized from residence of Shri. D.A. Bhat are infact documents of M/s B.T.Patil & Sons Belgaum Construction Pvt. Ltd. These documents were sent to Shri D.A. Bhat for the purpose of reconciliation as per periodical reconciliation is very important in these matters related to cash payments." The appellant submits that no opportunity of the hearing was given by the AO with regard to these presumptions. 1.3 Ld. CIT(A) was not justified in concurring with the finding of the AO rejecting the evidence in the form of loose papers seized at the office premises of the appellant holding on mere ipse dixit that such evidence is fabricated. 1.4 Ld. CIT(A) erred in confirming the presumption made by AO in shifting the undisclosed in come to earlier years on the basis of evidence seized from a third party." 146. After hearing both the sides we find the above grounds are identical to grounds of appeal No. 1 to 1.4 in ITA No.228/PN/2013 for A.Y. 2007-08. We have already decided the issue and the grounds raised by the assessee have been dismissed. Following the similar reasonings the above grounds by the assessee are dismissed. 147. The Ld. Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case and in law, the Ld.CIT(A) erred in allowing deduction on account of proportionate interest on diversion of funds for non business purposes of ₹ 10,33,466/-." 156. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.2 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning this ground by the revenue is dismissed. 157. Ground of appeal No.3 by the Revenue reads as under : "3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction on account of proportionate interest on advances for non business purposes of ₹ 6,21,063/-." 158. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.4 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning this ground by the revenue is dismissed. 159. Ground of appeal No. 4 by the revenue reads as under : "4. On the facts and in the circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts were already made and the assessee has not made any declaration of an amount over and above the money already expensed out, the source of ₹ 4,95,00,000/- found in the course of search and seizure was unexplained. In appellate proceedings, the assessee has given a chart showing the source and application of money while working out the disclosure of undisclosed income of ₹ 21.91 crores. The assessee has tried to imply that sufficient amount of cash was available on the working given by him which was sufficient to explain the existence of ₹ 4.95 crores found at its premises as well as in the bank. 39. I have gone through the contents of the chart which shows the source and application of funds. While it is correct that the source and application method will bring out whether a certain amount of unexplained expense out of declaration is available to explain the cash found, the same will have to be reworked upon giving effect to this order. The observation / remark of the assessing officer is not incorrect when he states that the entire unexplained expenses were spent in making various payments. Therefore, the assessing officer is directed to prepare the source an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction on account u/s.80IA(4) of ₹ 18,37,01,176/-, which was earlier confirmed by the Ld.CIT(A) for A.Y. 2000-01 and A.Y. 2001-02 as the assessee is only work contractor and not a developer as per the explanation below 80IA(13). (b) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing additional claim of deduction u/s.80IA(4) of ₹ 95,77,422/, which is the additional income declared during the course of search proceedings, on account of expenses from unexplained sources which attract provision of S.69C of the I.T. Act which is not an income from the business of undertaking referred to in se.80IA(4)." 168. After hearing both the sides we find the above grounds are identical to grounds of appeal No.6(a) and (b) in ITA No.452/PN/2013 filed by the revenue for A.Y. 2007-08. We have already decided the issue and the grounds raised by the revenue have been dismissed. Following the same reasonings the above grounds raised by the revenue are dismissed. 169. Grounds of appeal No.7 and 8 by the revenue being general in nature are dismissed. 170. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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