DY COMMISSIONER OF INCOME TAX, PATNA vs. GANADHIPATI CONSTRUCTION PVT LTD, PATNA

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ITA 298/PAT/2023Status: DisposedITAT Patna15 October 2024AY 2019-2012 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, finding that the assessee was indeed a developer engaged in designing, constructing, and maintaining infrastructure. The claim made in the return filed under Section 153A was considered valid, overriding the initial omission in the Section 139 return.

What were the facts?

The Revenue appealed against the CIT(A)'s order allowing deduction under Section 80IA to the assessee, a construction company. The AO denied the claim, viewing the assessee as a works contractor, while the CIT(A) held the assessee to be a developer.

What were the issues?

Whether the assessee qualifies as a developer for Section 80IA deduction, and if a claim made in a Section 153A return is valid even if omitted in the original Section 139 return.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 153A,Section 139

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, PATNA BENCH, PATNA

Before: SHRI RAJPAL YADAV & DR. MANISH BORAD

For Appellant: Shri AK Rastogi, AR
Hearing: 23.09.2024Pronounced: 15.10.2024

Heard together (4 matters)

I.T.A. No. 297/PAT/2023
I.T.A. No. 298/PAT/2023
I.T.A. No. 299/PAT/2023
I.T.A. No. 294/PAT/2023

Read from the judgment's own cause title. This page is filed under one of them.

आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

1.

The captioned appeals filed by the Revenue, pertaining to assessment years 2018-19 to 2021-22 are directed against the orders passed by the Learned Commissioner of Income Tax (Appeals), Patna – 3 (hereinafter referred to as the ‘ld. CIT(A)’) even

2.

As the issue raised are common and pertains to same assessee, these appeals have been heard together and being disposed of by this common order for sake of convenience and brevity.

3. Perusal of grounds of Revenue’s appeal reveals that the sole grievance in all these bunch of appeals by the Revenue relates to allowability of deduction u/s 80IA of the Act. The ld. AO denied the claim u/s 80IA of the Act by observing that the assessee is a works contractor. However, the assessee succeeded before the first appellate authority as ld. CIT (A) has held that the assessee is a developer and has rightly claimed the deduction u/s 80IA of the Act. We for the purpose of adjudication taken up the facts of for A.Y. 2018-19 and our decision shall apply mutatis mutandis to all the remaining instant appeals of Revenue in 297 to 298/Pat/2023.

4.

Revenue has raised following grounds of appeal for A.Y. 2018-19:-

“ 1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A)-3, Patna erred in deleting addition of Rs. 4,47,04,930/- holding that the assessee is eligible to claim deduction u/s 801A as it is a developer and not a contractor.

2. That on the facts and in the circumstances of the case and in law, Ld. CIT(A)-3, Patna failed to appreciate that within the meaning of section 801A of the Income-tax Act, the Bihar Rajya Jal Parishad was a developing agency (developer) who awarded contract work and not the assessee who just executed the contract work awarded by the Bihar Rajya Jal Parishad.

3.

That on the facts and in the circumstances of the case and in law, Ld CIT(A)-3, Patna failed to appreciate that if the assessee had been a developer he would have got liberty to execute the work of construction of Drinking Water Supply Scheme in anywhere in India or abroad whereas, in the case of the assessee it was compelled to execute its work at the site decided by the Bihar Rajya Jal Parishad only that too in accordance with the plan approved by the Bihar Rajya Jal Parishad.

5.

That on the facts and in the circumstances of the case and in law, Ld. CIT(A)-3, Patna failed to appreciate the fact that the auditor in his audit report did not confirmed eligibility of deduction u/s 80IA.

6.

That the order of the Ld. CIT (A) being erroneous in law and on facts to be vacated and the order/notice of the A.O. be restored.

7. That the applicant craves leave to add, alter, delete, modify the grounds of appeal

before the Hon'ble ITAT”

5. Facts in brief are that the assessee is a private limited Company engaged in the business of development and construction. Search and seizure action u/s 132 of the Act was carried out on assessee on 29th October, 2020, being part of Janardhan Prasad Group. The regular return of income u/s 139(1) of the Act furnished on 31st October, 2018, declaring total income of ₹4,47,04,930/-. Subsequent to search notice u/s 153A of the Act was issued and in compliance return of income was furnished on 24th December, 2021, declaring total income of ₹60 lacs after claiming deduction u/s 80IA of the Act at ₹4,47,04,929/- . This deduction u/s 80IA of he Act was not made in the original return filed u/s 139(1) of the Act on 31st October, 2018. During the course of assessment proceedings carried out after valid issuance of notice u/s 143(2) and 142(1) of the Act, ld. AO on going through the available records noticed that the assessee had not claimed deduction u/s 80IA of the Act in the original return and has paid due taxes but now the fresh claim has been made in the return filed in compliance to notice u/s 153A of the Act. The ld. AO was not satisfied with this claim and denied the same and completed the assessment.

7.

Aggrieved Revenue is now in appeal before this Tribunal. Ld. DR vehemently argued supporting the order of the ld. AO.

8.

On the other hand, the ld. counsel for the assessee apart from relying on the finding of the ld. CIT (A) also made reference to the written submissions as well as paper book filed for each of the years. For A.Y. 2018-19, the documents filed by the assessee in the paper book running into 107 pages are mentioned in the index and the same is reproduced below:-

SL Particulars Page No. No. 1. Copy of paper book submitted before CIT(A)-3, Patna along with the following documents:

10.

We notice that the ld. CIT (A) after taking note of the factual aspect of the case namely the audit report u/s 80IA of the Act, audit report on form 10CCB, agreement between the assessee and Bihar Rajya Jal Parisad though its executive engineer, copies of activities undertaken by the assessee pursuant to contract awarded by Government of Bihar found that the assessee has made a rightful claim u/s 80IA of the Act in the return filed in compliance to notice u/s 153A of the Act and such return is treated as a return filed u/s 139 of the Act and that the assessee has fulfilled the necessary conditions for claiming said deduction and also proved that the assessee is a developer and not a work contractor. Since, the findings of the ld. CIT (A) is common for all the assessment years, the one given for A.Y. 2018-19 is reproduced below:-

12.

As far as remaining appeal in 298 & 299/PAT/2023 for A.Y. 2019-20 to 2021-22 are concerned, since the issue raised and facts are verbatim similar, except the change in figures and this fact being not controverted by the learned Departmental Representative, we apply our decision of mutatis mutandis on the remaining appeals in ITA nos. 294, 298 & 299/PAT/2023 for A.Y. 2019-20 to 2021-22.

13.

In the result, all the appeals of the Revenue in 297 to 299/PAT/2023 are dismissed.

Order pronounced in the Court on 15th October, 2024 at Kolkata.

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