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TMI Blog2018 (2) TMI 1519X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. In view of that, since assessee ascertains that it has claimed only the deduction on infrastructural projects undertaken by it, AO is directed to examine this aspect and allow the claim after verification as in earlier years. The ground is considered partly allowed for statistical purposes Disallowance u/s.40(a)(ia) - amounts on which TDS was not deducted or TDS deducted but not paid - CIT-A restricted the disallowance only to the amount of TDS deducted and not paid in AY. 2012-13 - Held that:- As the issue is now decided by the Hon'ble Supreme Court of India in the case of Palam Gas Service Vs. CIT [2017 (5) TMI 242 - SUPREME COURT] in which it was held that even the amounts paid during the year are also covered by the provisions of Section 40(a)(ia), the Special Bench decision of the ITAT in the case of Merilyn Shipping and Transport Ltd., Vs. ACIT (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) is no longer a valid one. Consequently, the order of CIT(A), relying on the above, for giving relief is to be set aside. Allowance of deduction u/s. 80IA on the amount disallowed u/s 43B - Held that:- The amount disallowed u/s. 43B will become profits of business in the computation of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 80IA for claim of deduction. 4.1. Before the Ld.CIT(A), assessee not only justified how it was entitled for deduction u/s. 80IA but also relied on the orders of ITAT, Hyderabad 'A' Bench in ITA No. 129/Hyd/2013 dt. 30-08- 2013 for the AYs. 2004-05 to 2009-10 in its own case. Ld.CIT(A) following the above order, gave relief to assessee. 4.2. It was the contention of Ld.DR that assessee is not involved in infrastructural development that is required u/s. 80IA and was only involved in works contract, hence not eligible for deduction. It was the submission of the Ld. Counsel that assessee is involved both as contractor as well as infrastructural developer and the claim was made only the extent of projects which are as infrastructural developer and furnished the details of works undertaken. i. Infrastructural contracts (6 projects) - ₹ 30,25,56,324 ii. Infrastructural Projected executed directly - ₹ 41,42,59,321 4.3. It was submitted that claims were made only on the direct infrastructural projects which were to the extent of ₹ 57.59% and not on full contracts executed by assessee. Further, Ld. Counsel has placed on record the orders in AYs. 2010-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction on infrastructural projects undertaken by it, AO is directed to examine this aspect and allow the claim after verification as in earlier years. The ground is considered partly allowed for statistical purposes. 4.6. Similar is the case in AY. 2013-14 also. The above directions given for AY. 2012-13 will equally apply as the assessee has submitted that the claim in this year is only to an extent of 20%. i. Infrastructure contracts (6 projects) - ₹ 32,93,79,115 ii. Infrastructure Projects executed Directly - ₹ 7,83,29,410 AO is directed to examine this aspect and allow the claim after verification as in earlier years. The ground is considered partly allowed for statistical purposes. Issue of Section 40(a)(ia): 5. In both the years, AO has invoked the provisions of Section 40(a)(ia) to disallow the amounts on which TDS was not deducted or TDS deducted but not paid. Ld.CIT(A) invoking the decision of the Special Bench of ITAT in the case of Merilyn Shipping and Transport Ltd., Vs. ACIT [16 ITR 1] (SB)(Visakha.)(Trib.) has allowed the amounts. While doing so, he however has also restricted the disallowance only to the amount of TDS deducted and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [CM Appeal No. 3774 of 2015 in ITA No. 160 of 2015] dt. 28-08-2015, the disallowance u/s. 40(a)(ia) could not be made, if assessee is not treated as assesseein- default. It was further submitted that assessee is in a position to produce the certificates that the payee has included the amount received from assessee in its returns and has paid entire taxes on the income. Since these issues are not examined by the AO, we are of the opinion that the disallowance u/s. 40(a)(ia) is required to be re-considered by the AO, after giving due opportunity to assessee. For this purpose, orders of AO and CIT(A) on this issue are set aside and the matter is restored to the file of AO. Deduction u/ 80IA: 7. One more issue involved in AY. 2012-13 is with reference to objections of Revenue that CIT(A) erred in allowing the deduction u/s. 80IA on the amount disallowed u/s 43B. The order of Ld.CIT(A) in para 7.3 and 7.4 is as under: "7.3. I have perused the alternate ground raised by the AR. As the disallowance of ₹ 1,68,00,000/- made by the AD as above is sustained vide Para No.7.2. of this order, the profits of the assessee will be increased to this extent. In this regard, the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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