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TMI Blog2022 (8) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The regular assessment for the captioned year was also completed on 22-12-2008. Subsequently, a search action under section 132 of the Act was carried out at the premises of the assessee company and on 24-05-2010, disallowing the deduction claimed under section 80IA(4)-. From the facts placed on record, we observe that there was no incriminating material found during the course of search on the basis of which deduction claimed under section 80IA(4) was disallowed by the Ld. Assessing Officer and also confirmed by Ld. CIT(Appeals). The Department has not been able to produce any material to suggest / substantiate that the assessment order was passed on the basis of any incriminating material found during the course of search. Therefore, in view of well settled proposition of law that completed assessment can be interfered by the Assessing Officer while making assessment u/s. 153A only on the basis of some incriminating material unearthed during the course of search documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made in the course of original assessment, we are of the considered view that in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airing of road 11 Repairing of road 12 Job No. SR/Rajkot/204-05/15 Repairing of road 13 Tender No. 49 Repairing of road 14 Providing WBM asphalt carpet 15 Providing WBM asphalt carpet 16 Providing WBM asphalt carpet 17 Providing WBM asphalt carpet 18 Providing WBM asphalt carpet 19 Agreement No. ADB/2 Mahua Road Repairing only 23 Agreement No. CE/6. Repairing of road 25 Agreement No. CE/6. Repairing of road 26 Agreement for Road Repairing only. 28 Agreement for Road Repairing only. 29 Agreement for Road Repairing only. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67 Supplying and laying Dl delivery line in command area of Tandalja OHT (VMC Department) 68 Khedbrahma Ta. Chack Dam Nala Plaguing work (K14) Dist. Sabarkatha (GWSSB) 69 Earthwork in bank cutting for formatting including side drains between JLR-WSJ in Connection with Jetalsar Wanshjhaliya GC Project 70 PMGSY Pkg GJ -11-03 Ta. Kodinar 71 SR to Manavadar Sardargadh road widening and strengthening tp intermediate lane by prov. WBM seal coat by HMP and PF Km 2/0 to 4/0 73 Arambhada - 2 Industrial Zone WBM Rasta by Paver finisher using asphalt (GIDC Rajkot) 74 2006-07 action plan re-carpet road by using Paver in Central Zone (Rajkot Manager Palika) 75 Holenda Umrali Road (Km 0/0 to 3/100) Ta. Rajkot (Panchayat R B Division Rajkot) 76 SR to Thana Golal Amarpar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 SR to Dwarka Okha Road CH No. 6 between Km 233/4 to 237/0 By Prov. 37.5 mm IBM 0.18 Cum/10 Sqm Seal coat by paver HMP PF 6 SR to Dwarka Mithapur Road CH No. 6 between Km 236/2 to 239/4 By Prov. 37.5 mm IBM 0.18 Cum/10 Sqm Seal coat by paver finisher (Job No. JMN/SR/2005-06/17) 7 Construction and Maintenance of Rural Roads under PMGSY Pkg. No. GJ-1008Ta. Khambhaliya/Kalyanpur Dist. Jamnagar 8 Construction and Maintenance of Rural Roads under PMGSY Scheme Block: 9 Construction and Maintenance of Rural Roads under PMGSY Scheme Block: 10 Srto Limbadi-Rangurgadh-Charkala-Dwarka Road SH No. 6 Bet. Km. 28/4 to 34/4 By Prova. 37.50 mm IBM 0.18 Cum/10 Sqm Seal coat By HMP PF (Job No. JMN/SR/2004-05/19) 11 Srto Limbadi-Rangurgadh-Charkala-Dwarka Road SH No. 6 Bet. Km. 17/4 to 20/0 By Prova. 37.50 mm IBM 0.18 Cum/10 Sqm Seal coat By HMP PF (Job No. JMN/SR/2005-06/16) 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' vis-a-vis 'development contract' for deduction u/s 80IA(4) of the Act. In the said case of M/s HAL, Hon'ble Apex Court had held that no element of ownership or right of property is produced in the case of 'work contract'. 4. The Ld. CIT(A) has erred in law and on facts in deleting the addition made by the A.O. of Rs. 270,600/- U/s 40A(2)(b) of the I.T. Act. 5. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 6. It is, therefore, prayed that the order of the CIT(A) be set aside and that of the A.O. be restored to the above extent. AY 2006-07 1. The Ld.CIT(A) has erred in law and on facts in allowing the deduction U/s 80IA(4) in respect of various projects by treating the assessee as developer instead of 'work contracts' as treated by the A.O. 2. On the facts and circumstances of the case, the ld. CIT(A) has erred in interpreting the provision of section 80IA(4) of the Act whereby the vital conditions to ,be fulfilled such as findings on new infrastructure facility and requirement of eligible income to be derived from use of the said infrastructure fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment work on contractual basis. Copies of P L account and balance sheet, which were filed originally with the return filed u/s. 139(1) of the Act were also filed. Various issues were discussed at length. On perusal of details called for during the course of assessment it is seen that the assessee's receipts on which deduction u/s. 80IA(4) has been claimed, mainly consists of works contract with the Govt. and it's enterprises and Semi Govt. Bodies. On perusal of computation of income, filed along with the return of income it is noticed that the assessee has claimed deduction u/s. 80IA(4) of the Act on the profit derived from such contracts executed. In view of the provisions of section 80IA(4) of the Act the deduction is allowable to any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facilities. On perusal of the provision of section 80IA(4) of the Act, viewed in the light of the explanation, inserted after sub section (13) of section 80IA, which clarifies the provision of section 80IA(4), the assessee is apparently not eligible for deduction claimed under section8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of law. This has never been the intention of the Hon. ITAT and the assessee is trying to look for an interpretation to continue with its wrong claim of deduction which is not intended to be the interpretation of the provisions of section 153A as discussed in the said order of the Hon. Tribunal. Hence, If any wrong claim has been made in the income originally assessed, that has to be withdrawn because such deduction is part of the income originally assessed. The explanation inserted after sub section (13) of section 80IA been substituted by the Finance (No. 2) Act, 2009, with retrospective effect from 01.04.2000. In the said explanation it is clearly mentioned that Explanation--for the removal of doubts, if it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub section (4) which is in the nature of a works contract awarded by any person (including the Central or State Government) and executed by the undertaking or enterprise referred to in sub section(l). As mentioned earlier, it is clear from the details provided by the assessee that the assessee is a works contractor who receives regular amounts in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rase for removal of doubt , meaning there by that it only clarifies which is always intended to be the meaning of the provisions of section 80IA(4) of the Act. Since, the original assessment was completed prior to insertion of this explanation the then Assessing Officer did not had the benefit or occasion to examine the claim of the assessee in the light of intention and meaning of the provision as clarified by the said Explanation. Subsequently a Search was conducted in the case of the assessee on 24.06.2010 and after examining the documents found at the premises of the assessee during the course of search, it was observed that the assessee was not eligible for deduction under section 80IA (4) as clarified by the said Explanation. It would therefore, be incorrect to say that this was not a finding of the Search. Further, the claim of the assessee was examined during the course of present assessment proceedings and it was found that the findings of the Search that the assessee is not eligible for such deduction, is correct in view of the said provisions of section 80IA(4) of the Act. It would also be most relevant to mention that the issue of eligibility of the assessee for deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these decisions could be understood only after perusal of each of the decisions as a whole and not in piece meals. The extracts reproduced by the appellant were just to make them suitable for his own purpose. The Hon'ble Tribunals and the courts in the cases of Anil Kumar Bhatia 211 Taxman 453 (Delhi), Filatex Ltd. (2014) 49 Taxmann.com 465 (Delhi), Sunny Jacob Jewellers Wedding Centre 362 ITR 664(Kerala) and Hotel Mariya (2011)332 ITR 537 (Kerala) are in agreement that according to the provisions of Section 153A, the A.O. is obliged to issue notice u/s 153A in respect of 6 Assessment Years preceding the year in which search has been initiated. Thereafter, he has to assess or reassess the total income of these six years as provided u/s 153A (1)(b). It was further clarified that only the assessments or assessments pending on the date of initiation of the search or requisition shall abate. The second proviso does not contain any word or words to the effect that no reassessment shall be made in respect of completed assessments. The courts have unanimous view that the language is clear in this behalf and therefore, literal interpretation should be followed. The Bombay Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontentions and perused the material on record. In the case of PCIT v. Meeta Gutgutia [2018] 96 taxmann.com 468 (SC), Supreme Court held that invocation of section 153A to re-open concluded assessments of assessment years earlier to year of search was not justified in absence of incriminating material found during search qua each such earlier assessment year. In the case of Pr. CIT v. Saumya Constructions 81 Taxman.com 292 (Gujarat), the Gujarat High Court held that under section 153A, an assessment has to be made in relation to search or acquisition, namely, in relation to material disclosed during search requisitioned. If no incriminating material was found during search, no addition can be made on basis of material collected after the search. The Delhi High Court in the case of Kabul Chabla (2015) 380 ITR 573 (Delhi High Court) has held that completed assessment can be interfered by the Assessing Officer while making assessment u/s. 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which ware not produced or not already disclosed or made in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial found during the course of search. 10. In the instant case, we observe that for assessment year 2005-06, return of income was filed on 31-10-2005 declaring total income of Rs. 61,18,044/- wherein deduction u/s 80-IA of Rs. 1,48,64,424/- has been claimed. The regular assessment for the captioned year was also completed on 31-12-2007. Subsequently, a search action under section 132 of the Act was carried out at the premises of the assessee company and on 24-05-2010, disallowing the deduction claimed under section 80IA(4) of 1,48,64,424/-. From the facts placed on record, we observe that there was no incriminating material found during the course of search on the basis of which deduction claimed under section 80IA(4) was disallowed by the Ld. Assessing Officer and also confirmed by Ld. CIT(Appeals). 11. Similarly, for assessment year 2006-07, return of income was filed on 13-11-2006 declaring total income of Rs. 48,19,136/- wherein deduction u/s 80-IA of Rs. 2,62,16,961/- has been claimed. The regular assessment for the captioned year was also completed on 22-12-2008. Subsequently, a search action under section 132 of the Act was carried out at the premises of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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