9911796707
TMI Blog2023 (10) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was claimed by assessee which happens to be one of its constituent member. In our view, the statue is unambiguous and clear which only provides that the enterprise in whose favour the work has been allotted or agreement has been entered shall alone be entitled to claim deduction under section 80IA(4) of the Act. Therefore, in our view, the contention raised by the ld. DR for the Revenue is in accordance with the law and therefore, this legal issue is required to be decided in favour of the Revenue. However, the co-ordinate Bench of the Tribunal in the case of M/s. KNR Constructions [ 2021 (5) TMI 724 - ITAT HYDERABAD] has decided the issue in favour of the assessee. In our view, the above said proposition cannot be said to be binding on this Bench in view of the fact that in later decision of Dilip Kumar and Company [ 2018 (7) TMI 1826 - SUPREME COURT] Thus it is clear that in case a person seeking the deduction under the provisions of the Act, then onus is on the assessee to prove strictly that assessee fulfills all the parameters laid down by the statute for claiming the deduction. In the present case, admittedly, the agreement was not entered between the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Central or State or Local authorities and invest their own funds to develop such facilities will only be eligible for benefit of deduction. 2.1. As the facts and issues in both the appeals are same, except the amounts involved, we are reproducing the facts of appeal in ITA No.184/Hyd/2018 for the sake of brevity. 3. The brief facts of the case are that assessee company is in the business of undertaking contracts for Civil Works and infrastructure projects. The return of income was filed on 30-09-2013, admitting a total income of Rs. 9,08,12,280/- arrived after claiming deduction for Rs. 19,31,63,096/- u/s. 80IA(4) of I.T.Act. While finalizing the assessment order, the AO partially disallowed the said deduction, to the extent of Rs. 2,47,52,506/- on the premise that the assessee is not eligible for deduction u/s. 80IA(4), on the profits derived from the projects/works executed as a of constituent of AOP/Joint Ventures. In the process, the AO did not consider the plea of the assessee to follow the decision of ITAT, Visakhapatnam, in the case of India Vs ITO (in ITA No.540 of 2009), to the effect that a constituent is eligible for deduction u/s. 80IA(4), on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s engaged in infrastructural activity of various kind, as enumerated in this order and among the works the company was awarded, some are shown to be awarded directly as a main contractor/builder, while some were awarded to JVs/Consortia, but executed by assessee company as constituent of the said iv, in proportion to their share. On these lines, the assessee claimed deduction of Rs. 19,31,63,096/- u/s. 80IA(4), stating to represent the profits from the eligible projects for the year under reference. The AO examined these projects as regard to their eligibility for deduction 80IA(4), with reference to the conditions as stipulated in provisions of section 80IA(4) and the observations of judicial decisions. Though satisfied with the eligibility of profits of 7 of such projects representing profits of Rs. 19.31 crores for the year under reference, the 'AO restricted the benefit of deduction u/s. 80IA(4), to the profits related to direct projects. Thus, the AO disallowed the deduction claimed on profits of Rs. 2,47,52,506/-, other ground that the said amounts represent the profits attributable to One project / work awarded to JVs, where The assessee company is only a constituent and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of binding precedent of the order of the Tribunal as also the merits of appellant's claim as to its eligibility, the AO did not allow the deduction for the reason that an appeal has been preferred against the order of the ITAT. There is no further discussion on merit/eligibility. Turning to the facts of the present case, the AO, having examined the nature of income that are attributable to the projects awarded to JVs but executed by the assessee, as constituent, worked out the amount of profit attributable to such projects at Rs. 2,47,52,506/-. Claim of deduction u/s. 80IA(4) to this extent was held to be not allowable as deduction in the hand bf the constituent, which is contrary to the decision given by Hon'ble ITAT, Vishakapatnam in the case of M/s.Transtroy India Ltd Vs ITO (supra). As per the said decision, the assessee, being the constituent of the JVs/Consortia, having executed the contracts, was clearly held to be justified in claiming the deduction u/s. 80IA(4). Thus, the facts of the present case, being akin to the facts of case in M/s.Transtroy India Ltd., the assessee is considered eligible for deduction u/s. 80IA(4) on profits attributable to the projects exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also referred to the decision of Jurisdictional Tribunal in the case of Hindustan Ratna JV Vs. ITO, Ward-6(2), Hyderabad ITA No.372/HYD/2013, AY 2009-10, dated 18-12-2013, wherein it was held as under: In other words, we can safely conclude that there is no sub-contract between iv and the constituents and since the iv has been formed only to procure contract works from the Government and the contract is being executed by the constituent partners in their sharing ratio 60:40 as per the terms of iv, it cannot be said that the iv is a contractor and its constituents are sub-contractors. 5.3.3 Thus, based on the ratio of the judicial decisions cited, it is reasonable to hold that the AO is not justified in denying the deduction u/s. 80IA(4) on the profits of JVs to the assessee, as a constituent of the said JVs, disregarding the decision of [ITAT, Vishakapatnam, which was not stayed in its operation and as such is binding on the AO. It is not correct on the part of the AO to not implement the said order, merely on the ground that such decision was not accepted by department. Further, the order of Allahabad High Court upheld the allowance of claim of deduction u/s. 80IA(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's status as a developer or a mere works contractor u/s. 80IA(4) and 80IA Explanation; respectively. We note that the Assessing Officer detailed discussion in page No.9 of the assessment order has made it clear that the assessee itself satisfies all the three components of development, operation, and maintenance thereof along with financial involvement and risk factor involved in the corresponding infrastructure projects. The Revenue s argument raised before us goes contrary to the assessment findings therefore. We thus are of the opinion that there is neither any irregularity nor illegality in the order of the CIT(Appeals) s identical findings allowing the assessee's sec.80-IA deduction claim. Both these lower appellate orders are upheld therefore. 12. It was submitted that the Tribunal is bound by the decision of the co-ordinate bench of the Tribunal and therefore, the relief should be granted to the assessee. In the alternative, it was also submitted by the ld. AR that the appeal of the Revenue is academic in nature as there is no tax effect even if the relief is granted by the ld.CIT(A) is withdrawn. For the above said purposes, he has drawn our attention to par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, the co-ordinate Bench of the Tribunal in the case of M/s. KNR Constructions (supra) has decided the issue in favour of the assessee. In our view, the above said proposition cannot be said to be binding on this Bench in view of the fact that in later decision of the Hon ble Supreme Court in the case Commissioner of Customs (Import) Vs. M/s. Dilip Kumar and Company, the issue has been decided by the Hon'ble Supreme Court in Paras 40 to 42 which read as under : 40. After considering the various authorities, some of which are adverted to above, we are compelled to observe how true it is to say that there exists unsatisfactory state of law in relation to interpretation of exemption clauses. Various Benches which decided the question of interpretation of taxing statute on one hand and exemption notification on the other, have broadly assumed (we are justified to say this) that the position is well settled in the interpretation of a taxing statute: It is the law that any ambiguity in a taxing statute should ensure to the benefit of the subject/assessee, but any ambiguity in the exemption clause of exemption notification must be conferred in favour of revenue and such e ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
