×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
06-03-2019, Porel Dass Water, Section 80IA(4)(i), 194C, Tribunal Kolkata
The captioned two appeals filed by the assessee pertaining to assessment years 2011-12 and 2012-13 and an appeal filed by the revenue for assessment year 2013-14, are directed against the separate orders passed by the Commissioner of Income Tax (appeals)-5, Kolkata, which in urn arise out of separate assessment orders passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 [in short the ‘Act’].
2. Since the issues involved in all the appeals are common and identical , therefore these appeals have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in I.T.A. No. 2441/Kol/2017, for assessment year 2013-14, have been taken into consideration for deciding the above appeals en masse.
3. All the grounds raised by the Assessee and Revenue were carefully perused by us. Most of the grounds according to us are either of academic or contentious nature. However, to meet the ends of Justice, we confine ourselves to the Core of Controversy, that is, whether the assessee is a developer or mere works contractor and not eligible for deduction u/s 80IA(4)(i) of the Act.
4. The brief facts qua the issue are that during the assessment proceedings, the Assessing Officer noted that the assessee in its return of income had claimed deduction for Rs.70,07,818/- under section 80IA(4)(i) of the Income Tax Act relating to water treatment system plant. During the assessment proceedings, the assessee company was asked to explain as to why it is eligible for deduction under section 80IA(4)(i) of the Act. In response, the assessee company filed the following necessary details and evidences in order to claim its contention regarding applicability of deduction under section 80IA(4)(i) of the Income Tax Act, 1961.
i) Copy of the audit report in form No. 10CCB dated 20.09.2013.
ii) Copy of form No. 29B dated 24.06.2013 for the assessment year 2013-14.
iii)Copy of the work order dated 27.10.2008 for construction.
iv) Copy of the work order dated 21.08.2009.
v) Copy of the work order dated 23.10.2009.
vi) Copy of the work order dated 20.11.2012
vii) Copy of communication dated 28.10 2009 regarding Acceptance cum work order for supply, installation commissioning, operation and maintenance of 90 cu.m/hr. capacity Iron Elimination plant for zone-VII at AA-1 of New Town Kolkata at P.H. Engg. Dte from the Executive, New Town Kolkata Water Supply division-I, PHE Directorate, Govt. of West Bengal.
5. The Assessing Officer, having gone through the above documents submitted by the assessee, noted that the assessee is engaged in ‘works contract’ and therefore not eligible to claim deduction u/s 80IA(4) (i) of the Act. The Assessing Officer also noted from the audited report of the assessee company in form No. 10CCB dated 29.06.2001, in column No. 14(c ) regarding “whether the operation and maintenance of the infrastructure facility has been received on transfer from its developer in accordance with central/state government/ local authority/ any other statutory body.
It is stated ‘ No’.
After going through the above remark in the audit report, the Assessing Officer was of the view that there is no element of ‘operating and maintaining, or developing’ infrastructure facility involved. The Assessing Officer noted that in fact the details submitted by the assessee explained that the assessee is engaged in the ‘ works contract’ and Assessing Officer further noted that it was quite evident that the assessee company has been awarded job of execution of ‘ work contract’ by the state government for design, construction commencing, surface water treatment plant and underground reservoir-cum-pumping station and other allied works as per specification mentioned in such ‘ work contract’ and under the supervision control and guidance of the party which has awarded such contract to the assessee. Therefore, the Assessing Officer noted that as such the assessee has not done any development work of any new infrastructu e facility as claimed by it hence the assessee is merely engaged in the work contract’ of construction of surface water treatment plant, and underground reservoir-cum-pumping station and other allied works awarded to it by by the Government of West Bengal.
The Assessing Officer also noted from form No. 3CD, vide the audited report dated 24.06.2013, wherein t had stated the nature of business of the assessee company as ‘ civil contractor’. Therefore, the Assessing Officer was of the view that the assessee is only engaged in the execution of ‘work contract’ construction of surface water treatment plant awarded to it by the Government of West Bengal.
6. However, the assessee company further filed a letter before the Assessing Officer stating that the assessee company has been carrying out its activity in the projects in different parts as per the copy enclosed with form No. 10CCB. The assessee company also claimed that it fulfilled all the conditions of section 80IA(4)(i) of the Act. Apart from this, the assessee company relied its contention in the case of CIT vs. J.K. Hosiary Factory  159 ITR 85(SC), Mysore Minerals Ltd.  239 ITR 775 (SC), CIT vs. Radha Devi Poddar  185 ITR 544 (Cal) etc.