ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE2-(2), HYDERABAD vs. SUSHEE INFRA & MINING LIMITED, HYDERABAD

Brief facts are that the assessee is a company and is engaged in the business of development of infrastructure facility and execution of works contracts. For the assessment year 2014-15, it filed its return of income on 29/11/2014 declaring NIL income, after claiming deduction under section 80-lA of the Income Tax Act, 1961 (for short “the Act”) of Rs. 48,54,27,201/-. The assessment was completed under section 143(3) of the Act on 25/03/2016 and the deduction claimed under section 80-lA of the Act was disallowed.

Aggrieved, assessee filed an appeal before the learned CIT(A), who allowed the appeal in favour of the assessee vide order dated 16/06/2017 and the said order was confirmed by a Co-ordinate Bench of the Tribunal vide order in dated 24/10/2018.

4. In the meanwhile, there was a search and seizure operations under section 132 of the Act in the case of the assessee and the group concerns on 21/07/2016. According to the assessee, no incriminating material

In response to the notice under section 153A of the Act on 27/12/2016, on verification of the information available on record, assessee filed a return without offering any additional income as stated by the Managing Director at the time of search. Assessee also filed a letter dated 18.12.2018 before the learned Assessing Officer requesting not to make any disallowance. Assessee also filed copies of the expenditure incurred on all the projects before the learned Assessing Officer and requested not to make any addition. Learned Assessing Officer, however, was of the view that in respect of the project Pranahitha-Chevella Package- 27, the total expenditure incurred was Rs.15,10,59,459/- and out of the said amount, Rs.2,05,28,536/- is not allowable as a deduction on the ground that the vouchers were self-made and the bills and vouchers were found to be doubtful. Learned Assessing Officer accordingly made an addition of Rs. 2,05,28,536/- on that count. Further, the learned Assessing Officer did not consider the eligibility for deduction under section 80-IA of the Act.

Assessee filed appeal before the learned CIT(A) and submitted that the disallowance cannot be made on a mere doubt. It was contended that the disallowance cannot be made as the project cost is properly recorded in the books of account and the details with regard to the expenditure are M/s. Sushee Infra & Mining Limited, batch available and such were also filed. It was further submitted that the learned Assessing Officer during the assessment proceedings, did not find any discrepancy in the maintenance of the books of account nor did he find any disallowable expenditure, and, therefore, simply based on a statement recorded at the time of search, the learned Assessing Officer cannot reach a conclusion in respect of disallowance of the expenditure. He further submitted that since the assessment is being made under section 153A of the Act, after the search and seizure operations were conducted, any addition has to be based on the material seized during the search and seizure operations. Since the authorities did not find any such material, no such addition can be made under section 153A of the Act, because the regular assessment under section 143(3) of the Act was complete without making such an addition.

In respect of the disallowance, learned CIT(A) recorded that even though there is an admission, in terms of the decision of the Hon’ble Apex Court in the case of Pullangode Rubber Products Co. vs. State of Kerala (1973) 91 ITR 18 (SC), it is always open for the person making such an admission to explain that the said admission is incorrect, but the onus rests on such person to prove the grounds of retraction with convincing material. According to the learned CIT(A), the assessee produced the bills and vouchers in support of its contention that all the expenditure is supported by documents and, therefore, at that point, the onus shifts to the department to make enquiries with reference to such material and point out any specific errors with reference to such material. But, in this case, according to the learned CIT(A), the learned Assessing Officer did not undertake any such enquiry, but disallowed a sum of Rs. 2,05,28,536/-

Aggrieved by the upholding of 1/4th of the disallowance of expenses assessee preferred appeal in whereas challenging the deletion of 3/4th of the disallowance of expenditure the Revenue preferred appeal in ITA No. 730/Hyd/2020.

Learned AR reiterated the same argument as was made before the learned CIT(A), and further submitted that no incriminating material was found during the course of search regarding inflation of expenditure. He submitted that the learned Assessing Officer cannot make addition on estimate basis in a search assessment and the learned CIT(A) is also not justified in restricting such disallowance instead of deleting the entire addition.

Per contra, learned DR heavily relied on the order of the learned Assessing Officer and submitted that when the Managing Director of the assessee in his sworn statement dated 22/07/2016 in reply to Question No.45 admitted the discrepancies and voluntarily admitted disallowance of expenditure of Rs. 55,60,06,464/- for various years, the learned CIT(A) was not justified in restricting the disallowance made by the learned Assessing Officer.

We have gone through the record in the light of the submissions made on either side. We also considered the various decisions cited before us. We find that the learned Assessing Officer, during the course of M/s. Sushee Infra & Mining Limited, batch assessment proceedings, noted that out of the various expenditure amounting to Rs.15,10,59,459/- claimed in the Profit and Loss Account (P&L Account), the assessee could not produce the bills and vouchers completely to his satisfaction and some of the vouchers appear to be doubtful and were self-made. Further, the Managing Director of the assessee by name, Shri Lakshmi Kant Reddy in his reply to Question No.45 in his sworn statement dated 22/07/2016 also conceded disallowance of expenditure of Rs.50,60,06,464/- for the financial years 2013-14 to 2015- 16. Since the assessee did not offer the amount of Rs.1,50,36,489/- to tax in the return filed in response to notice under section 153A of the Act and since the assessee could not substantiate with evidence to the satisfaction of the learned Assessing Officer by providing supporting documents in some of the expenses, the learned Assessing Officer rejected the explanation given by the assessee and made addition of Rs. 2,05,28,536/- to the total income of the assessee. We find that the learned CIT(A) restricted such disallowance to Rs.51,32,134/- being 1/4th of such disallowance and deleted the balance amount of Rs. 1,53,96,402/- on the ground that although the assessee retracted the statement after a gap of more than 14 months, however, the assessee during the course of assessment proceedings produced the bills and vouchers and books of account before the learned Assessing Officer and the learned Assessing Officer disallowed an amount of Rs. 2,05,28,536/- without pointing out any specific defect in any of the bills and vouchers. We find that the learned CIT(A) while giving part relief to the assessee relied on the decision of the Hon'ble Supreme Court in the case of Pullangode Rubber & Products Co. Vs. State of Kerala reported in (1973) 91 ITR 18 SC, wherein it was held that though the admission is an extremely important piece of evidence, but it

In our opinion, the approach of the learned Assessing Officer as well as the learned CIT(A) on this issue is not correct. It is an admitted fact that the assessment in the instant case is under section 153A of the Act and the addition was based on the statement of the Director, but no specific evidence of doubtful bill/vouchers have been identified by the learned Assessing Officer. In our opinion, when the assessee produced books of accounts along with bills and vouchers, the learned Assessing Officer should have verified the bills and vouchers and made addition of the doubtful/non-genuine bills only where the assessee cannot substantiate with evidence to his satisfaction. He should not have resorted to estimation when the bills/vouchers and books of accounts were produced before him. Under these circumstances and considering the totality of the facts of the case, we deem it proper to restore the matter to the file of the learned Assessing Officer with a direction to verify all the bills and vouchers and make addition of only those bills/vouchers which according to him are not genuine or bogus. Learned Assessing Officer shall decide the issue afresh and as per fact and law after giving due opportunity of being heard

In the result, appeals of the assessee and Revenue in and 730/Hyd/2020 for the assessment year 2014-15, are treated as allowed for statistical purposes.

Ground No. 1 of assessee’s appeal and Grounds No. 1 & 8 of Revenue’s appeal are general in nature. Ground No. 2 of assessee’s appeal relates to the action of the learned Assessing Officer in treating the book profit for the purpose of section 115JB of the Act at Rs. 75,36,99,384/- whereas according to the assessee, the actual amount of profit before tax was only Rs. 59,74,43,510/- and the book profit admitted by the assessee was Rs. 48,89,22,648/-.

It could be seen from the record that the assessee in the return of income declared an amount of Rs.75,36,99,384/- under section 115JB of the Act. During the appellate proceedings, the assessee requested the learned CIT(A) to direct the learned Assessing Officer to adopt the declared income of Rs.75,36,99,384/- under section 115JB of the Act. Learned CIT(A), however, in absence of any written submission, dismissed the ground raised before him. It is the submission on behalf of the assessee that, when the entire material was available before him, learned CIT(A) should have decided the issue on the basis of material available before him and should not have rejected the ground merely because the assessee did not make any written submission on this issue.

Considering the totality of the facts of the case and considering the fact that the learned CIT(A) did not adjudicate the issue on the basis of material available before him, we deem it just and proper to set aside the findings of the learned CIT(A) on this aspect and restore the same to the file of the learned CIT(A) with a direction to decide the issue as per fact and law after affording due opportunity of being heard to the assessee. Ground of appeal No.2 raised by the assessee is accordingly treated as allowed for statistical purposes.

Coming to Ground of appeal No.3, it relates to the disallowance of sub-contract payments to the tune of Rs. 5,82,60,105 and Rs.5,29,96,903/- respectively, which was confirmed by the order of the learned CIT(A). Record reveals that the learned Assessing Officer, during the course of assessment proceedings, noted that the assessee sub-contracted certain works to the tune of Rs.5,82,60,105/- to 14 sub-contractors the details of which are as under:

Learned Assessing Officer noticed that during the course of post search inquiries, summons were issued by the concerned DDIT to examine the issue with a view to verify the correctness of the claim of such sub- contractors. None of the sub-contractors, however, replied nor did they furnish the requisite information during the course of post search inquiries. He, therefore, asked the assessee to produce the sub- contractors since they did not appear despite issuance of summons. Since the assessee failed to produce and also none of the sub-contractors appeared before him, learned Assessing Officer asked the assessee to explain as to why the sub-contractors should not be treated as bogus and payment of Rs.5,82,60,105/- should not be treated as bogus expenditure.

The assessee replied to the same and submitted the work orders and the TDS details. Learned Assessing Officer observed from the work orders that two sub-contractors namely Shri Manohar Vemavarapu and Prabhavathi Chepuri have not signed the work order in token of their acceptance. Further, neither the sub-contractors appeared before him nor the assessee was able to produce them for examination by him. In view of the same, learned Assessing Officer made an addition of Rs. 5,82,60,105/- by disallowing the payments made to sub-contractors observing that the assessee failed to establish their identity and creditworthiness and to prove the genuineness of such expenditure.

Similarly, learned Assessing Officer noted in para 25 of the order that certain amounts towards sub-contract payments were debited to P&L Account and the work orders were not signed by the sub-contractors. He, therefore, held that the genuineness of the sub-contracts given to the following persons are doubtful:

In appeal, the learned CIT(A) sustained both the additions by observing as under:

Learned AR submitted that the sub-contract agreements were produced before the learned Assessing Officer, payments were made by account payee cheques or through RTGS which were encashed by the sub- contractors through their bank accounts and TDS has been made. Further, there is no evidence that the money has come back to the assessee in some way or other. Assessee, therefore, fulfilled all the ingredients and merely because of their non-appearance, learned Assessing Officer should not have disallowed the entire amounts. He submitted that since the sub- contractors are working at far of places, it was not possible for them to appear before the learned Assessing Officer. He, however, submitted that given an opportunity, the assessee is in a position to produce the sub- contractors. He accordingly submitted that the addition made by the learned Assessing Officer on account of sub-contract payment of Rs.5,82,60,105 and Rs.5,29,96,903/-respectively needs to be deleted.

Per contra, learned DR heavily relied on the order of the learned Assessing Officer and the learned CIT(A). He submitted that merely because the payments have been made through account payee cheques or through RTGS and that the TDS has been deducted, cannot justify the allowance of such expenditure especially when some of the work orders are not signed by the sub-contractors and that none of the sub-contractors appeared before the learned Assessing Officer or produced by the assessee. According to her, in these circumstances, despite meticulous paper work, the identity of these persons and the genuineness of the transactions remain unverifiable. Learned DR accordingly submitted that the order of the learned CIT(A) be upheld and the grounds raised by the assessee on this issue should be dismissed.

We have gone through the record in the light of the submissions made on either side. It is an undisputed fact that despite the issuance of summons to the sub-contractors, they did not appear before the learned Assessing Officer. Further, the assessee also did not produce any of the sub-contractors before the learned Assessing Officer for examination by him and some of the work orders are unsigned. At the same time, it is also a matter of fact that all payments were made by account payee cheques to the sub-contractors, proper TDS has been made and barring two or three work orders, the other work orders are duly signed by the sub- contractors. Further, there is no evidence on record that the money has come back to the assessee from these sub-contractors in some way or other. It is the submission of the learned AR that given an opportunity, the assessee is ready and willing to produce the sub-contractors before the learned Assessing Officer for examination by him. In these circumstances, considering the facts of the case in their entirety, we deem it just and proper to set aside the findings of the learned CIT(A) on this aspect and restore the issue to the file of the learned Assessing Officer with a direction to give one last opportunity to the assessee to produce the sub-contractors before him for examination by him and then decide the issue as per facts and law. We hold and direct accordingly. Ground No.3 by the assessee is treated as allowed for statistical purposes.

Coming to Ground No. 4 of assessee’s appeal as well as Ground Nos. 4 & 5 of Revenue’s appeal relate to the disallowance of expenses. learned Assessing Officer made disallowance of Rs. 31,30,65,406/- out of which, the learned CIT(A) confirmed 1/4th thereof to the tune of Rs. 7,82,66,352/- and deleted the balance of Rs. 23,47,99,054/-.

On a perusal of the record including the orders of the both the authorities below, we find that an identical issue had arisen in the assessment year 2014-15 and in the foregoing paragraphs, after an elaborate consideration, such an issue is answered dismissing the related ground of appeals of both the Revenue and the assessee. Following similar reasoning for this year also, the grounds raised by the both the parties on this issue are dismissed.

On a perusal of record, we find that the learned Assessing Officer noted that an amount of Rs.2,20,95,606/- was paid to Shri Komati Reddy Venkat Reddy (Prop. M/s. Sai Earth Movers). Assessee submitted that the payment was wrongly classified under sub-contracts, whereas it should have been classified as advances. Learned Assessing Officer, however, observed that the amount has been debited to P&L Account, and accordingly made addition of the entire amount of Rs.2,20,95,606/-.

In appeal, learned CIT(A) deleted an amount of Rs.1,66,95,606/- and sustained the balance amount of Rs.54 lakhs only on the ground that as per the ledger account furnished before him, the debit balance amount to Sai Earth Movers was only Rs.54 lakhs.

Since the learned Assessing Officer noted that the amount of Rs.2,20,95,606/- paid to Shri Komati Reddy Venkat Reddy has been debited to the P&L Account and since the learned CIT(A) observed that the actual debit balance amount is only Rs.54 lakhs, whereas it is the submission of the learned AR that no such amount is debited to P&L Account, it requires verification. We, therefore, considering the totality of the facts of the case and in the interest of justice, deem it just and proper to restore the issue to the file of the learned Assessing Officer with a direction to re-adjudicate the issue by giving an opportunity to the assessee to substantiate its case. Learned Assessing Officer shall decide the issue as per the facts and law. We hold and direct accordingly. Thus, the Ground No. 6 raised by the M/s. Sushee Infra & Mining Limited, batch assessee and Ground No.7 raised by the Revenue are treated as allowed for statistical purposes.

Coming to Ground Nos. 2 & 3 of Revenue’s appeal relate to the claim of the assessee for deduction under section 80-IA(4) of the Act. On a consideration of details furnished by the assessee, learned Assessing Officer held that the assessee cannot be granted such a deduction because the assessee entered into a contract with another person referred to in section 80-IA of the Act for executing works contract. Further according to the learned Assessing Officer, for the assessment years 2008-09, 2009- 10, 2011-12 and 2012-13 also, the assessee was denied such a deduction but the appeal preferred by the assessee was allowed by learned CIT(A) and confirmed by the ITAT, but since the department did not accept such findings of the first and second appellate authorities by preferring an appeal before the Hon’ble High Court against the orders of ITAT, to keep the issue alive, the claim of the assessee for deduction under section 80- IA(4) of the Act shall not be allowed. Accordingly learned Assessing Officer disallowed the claim.

In appeal, learned CIT(A) recorded that the learned Assessing Officer disallowed the 80-IA deduction stating that the joint venture did carry out the work and not the assessee and, therefore, the assessee is not entitled to deduction under section 80-IA of the Act. Learned CIT(A), however, further noted that a similar issue had arisen and decided for the earlier assessment year 2014-15 wherein his predecessor, after an elaborate discussion, held the issue in favour of the assessee. Learned CIT(A) further stated that this issue was settled at the level of the ITAT in assessee’s own case for the assessment years 2008-09, 2009-10, 2011-12

Learned DR vehemently contended that there is no concept of res judicata in income tax proceedings and each year has to be considered on its own merits. Apart from this, she submitted that the Revenue preferred appeal against the orders of the ITAT for the earlier years and the matter is pending before the Hon’ble High Court.

We have gone through the record in the light of the submissions made on either side. On this aspect, learned CIT(A), while allowing the claim of the assessee for deduction under section 80-IA(4) of the Act observed that,-

There is no dispute that right from the assessment year 2008-09 for successive years, the assessee was allowed the deduction under section 80-IA(4) of the Act by the first and second appellate authorities. It is also not in dispute that the order of the Tribunal for the assessment years 2008- 09, 2009-10, 2011-12 and 2012-13 remains undisturbed. In this set of facts, more particularly in the absence of any change in circumstances, we find it difficult to ignore the reasoning and the precedent in the orders of the ITAT for the earlier assessment years. We, therefore, while respectfully following the view taken in assessee’s own case for the earlier assessment years, hold the issue in favour of the assessee. Issue is answered accordingly in favour of the assessee.

Ground No.6 by the Revenue relates to the order of the learned CIT(A) in deleting the disallowance of Rs.17 lakhs made by the learned Assessing Officer. On a perusal of the record, we find that the learned Assessing Officer made an addition of Rs.17 lakhs on the ground that an amount of Rs.17 lakhs was paid to Shri Madhu Yashki Goud which has been debited to the P&L Account. In appeal, the learned CIT(A), however, deleted the addition on the ground that such an amount of Rs.17 lakhs is reflected in the balance sheet in the name of Shri Madhu Yashki Goud and has not been debited to the P&L Account. Since the learned CIT(A) in the instant case did not obtain any remand report from the learned Assessing Officer before deleting the addition, based on the submission of the M/s. Sushee Infra & Mining Limited, batch assessee only, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it just and proper to restore the issue to the file of the learned Assessing Officer with a direction to verify the record. In case it is found that the amount is not debited to the P&L Account, learned Assessing Officer shall pass appropriate order as per the facts and law, after giving due opportunity of being heard to the assessee. This ground raised by the Revenue is treated as allowed for statistical purposes.

In the result, appeals of the assessee and Revenue in and 731/Hyd/2020 (assessment year 2015-16), are treated as partly allowed for statistical purposes.

Grounds No. 1 & 9 in assessee’s appeal and Grounds No. 1 & 6 of Revenue’s appeal are general in nature and do not require any specific adjudication.

Ground No. 2 of assessee’s appeal relates to the issue under section 115JB of the Act. On a perusal of record, it is found that this issue is identical to the Ground No. 2 in wherein the findings of the learned CIT(A) were set aside and the issue was restored to the file of the learned CIT(A) for fresh adjudication. Following similar reasonings, this ground is also restored to the file of the learned CIT(A) for fresh adjudication. This ground is accordingly treated as allowed for statistical purposes.

Ground No.3 of assessee’s appeal relates to the order of the learned CIT(A) confirming the disallowance of sub-contract payments amounting to Rs.1,15,00,000/- made to M/s. Sai Pranav Infra Projects Pvt. Ltd. Facts of the case in brief are that during the course of search operation, it was observed that the assessee sub contracted certain works to the tune of Rs.1,15,00,000/- to M/s. Sai Pranav Infra Projects Pvt. Ltd. It was further found that the assessee received back this amount as per the verification done at the time of search. Learned Assessing Officer, therefore, issued a show-cause notice to the assessee vide letter dated 13/11/2008 and rejecting the various explanations given by the assessee and observing that the entire money was received back by the assessee in cash from the sub- contractor, he held that the sub-contract is bogus in nature. Learned Assessing Officer, therefore, confronted the assessee regarding the same. In absence of any reply from the side of the assessee, learned Assessing Officer added Rs.1,15,00,000/- to the total income of the assessee.

In appeal, the learned CIT (A) confirmed the addition made by the learned Assessing Officer by observing that,-

Having heard both the sides and having perused the material on record, we do not find any infirmity in the order of the learned CIT(A) on this issue. It is an admitted fact that incriminating messages on the phone and subsequent admission of Mr. K. Srihari and Mr. Ranjith Kumar in the statements have not been controverted by the assessee. We further find that during the course of assessment proceedings, Shri K. Srihari Sr. Manager (Accounts) categorically stated that the cash of Rs.50 lakhs and Rs.65 lakhs were received from Sai Pranav Infra Projects Ltd by Shri Ranjit and the transactions were done as per the direction of the management.

The submission of the learned AR that Shri K. Srihari was only an employee of the company and, therefore, his statement has no evidentiary value cannot be accepted especially when it was categorically stated by Shri K. Srihari that the money was given to Sai Pranav Infra Projects Ltd., through cheques and RTGS and were received back in cash as per the direction of the management. In the absence of any material to the contrary brought to our notice, we do not find any infirmity in the order of the learned CIT(A) on this issue. Accordingly, the same is upheld and the ground No. 3 raised by the assessee is dismissed.

Ground No.5 of assessee’s appeal is an alternative ground to ground No.3 above, according to which the disallowance of Rs.1,15,00,000/-

Now coming to Ground No.4 of assessee’s appeal, it relates to the addition of sub contract payment of Rs.2,56,80,988/-. On a perusal of record, we find that the learned Assessing Officer made disallowance of Rs.2,56,80,988/- being the amount paid to sub-contracts on the ground that some of the work orders were not signed by some of the sub- contractors and the genuineness of such sub-contract is doubtful. The details of sub-contractors are as under:

Learned CIT(A), in appeal, sustained the addition by observing as under,-

It is submitted by both the counsel that this issue is identical to the ground of appeal No.3 in wherein we have already restored the issue to the file of the learned Assessing Officer for fresh adjudication. Following similar reasonings, this issue is also restored to the file of the learned Assessing Officer for fresh adjudication. Ground is accordingly treated as allowed for statistical purposes.

Grounds No. 6 and 8 by the assessee and Grounds No. 3 to 5 by the Revenue, cover the part relief given by the learned CIT(A) on account of the disallowance of expenses. A perusal of record reveals that the above grounds are identical to the grounds of appeal by the assessee and Revenue for the assessment year 2014-15. We have already decided the M/s. Sushee Infra & Mining Limited, batch issue and dismissed the grounds raised by the assessee and the Revenue. Following the similar reasonings, these grounds are also dismissed.

We have gone through the record in the light of the submissions made on either side. We do not find any infirmity in the order of the learned CIT(A) on this issue. Admittedly, the assessee by not deducting the TDS on the balance interest of Rs.60,432/-, violated the provisions of section 40(a)(ia) of the Act. Nothing was brought to our notice that the payee has paid the tax on the above amount or that the assessee deducted the TDS. In the absence of any material to the contrary, the order of the learned CIT(A) confirming the disallowance of interest of Rs.19,630/- is upheld and the ground No. 7 raised by the assessee is dismissed.

So far as the alternate claim of the assessee that the inflation in expenses confirmed at Rs.6,98,90,097/- would qualify for deduction u/s 80IA(4) of the I.T. Act is concerned, we find this issue is already decided in Ground of appeal No.5 above. Following similar reasonings, the alternate ground raised by the assessee is allowed on the inflation in expenses to the tune of Rs.6,98,90,097/-. So far as the deduction u/s 80IA(4) on account of disallowance made u/s 40(a)(ia) amounting to Rs.19,630/- is concerned, in our opinion, the assessee is entitled to get the deduction under section 80-IA(4) of the Act In view of the CBDT circular (supra). Ground raised by the assessee on this issue is decided accordingly.

Lastly coming to Ground No.2 of Revenue’s appeal relating to the claim of assessee for deduction under section 80-IA(4) of the Act. It is identical to ground of appeal No.2 & 3 in Revenue’s appeal for the assessment year 2015-16. We have already decided the issue in favour of the assessee, holding that in view of the consistent view taken in assessee’s own case for the earlier assessment years by the learned CIT(A) as well as the Tribunal, such a deduction cannot be denied to the assessee.

In the result, appeal of the assessee in for the assessment year 2016-17, is treated as partly allowed for statistical purposes and the appeal of Revenue in 2016-17, is dismissed.

In this assessment year, in the appeals preferred by the assessee and the Revenue, Grounds No. 1 & 4 of assessee’s appeal and Grounds No. 1 and 6 of Revenue’s appeal are general in nature and do not need any specific adjudication.

Insofar as Ground No. 2 of assessee’s appeal is concerned, same relates to the computation of book profits under section 115JB of the Act. We find that it is identical to ground of appeal No.2 in ITA No. 645/Hyd/2020. We have already decided the issue and the matter has been restored to the file of the learned CIT(A) for fresh adjudication. Accordingly, this ground of appeal raised by the assessee is restored to the file of the learned CIT(A) for fresh adjudication. Ground No. 2 of assessee’s appeal is treated as allowed for statistical purposes.

After hearing both the sides, we find these grounds are identical to grounds of appeal in & 730/Hyd/2020 for the assessment year 2014-15, where such grounds raised by the Revenue as well as the assessee have been dismissed. Following similar reasonings, the ground raised by both the assessee and the Revenue are dismissed in this assessment year also.

On a careful consideration of the matter, we are of the considered opinion that the matter requires re-adjudication at the level of the learned Assessing Officer. The assessee is directed to produce all the bills and vouchers relating to purchase of assets amounting to Rs.15,88,21,325/-. Learned Assessing Officer shall decide the issue as per facts and law, after giving due opportunity of being heard to the assessee. We hold and direct accordingly. Ground No.5 raised by the assessee is accordingly treated as allowed for statistical purposes.

In the result, appeals of the assessee and Revenue in and 733/Hyd/2020 for the assessment year 2017-18, are treated as partly allowed for statistical purposes. – assessment year 2019-20

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT(A) in confirming the order passed by the CPC, disallowing the claim of deduction under section 80-IA(4) of the Act.

Facts in brief, are that the assessee filed its return of income on 30/09/2020. The CPC vide communication dated 29/06/2020 proposed adjustment under section 143(1)(a) of the Act, disallowing the claim of deduction under section 80-IA(4) of the Act and also TDS of Rs.53,87,55,539/- on the ground that TDS was not paid in time.

In appeal, learned CIT(A) allowed the claim of deduction. So far as the disallowance of deduction under section 80-IA of the Act is concerned, the learned CIT(A) upheld the action of the CPC in disallowing the claim of deduction under section 80-IA of the Act in 143(1) intimation by observing as under,-

We have gone through the record in the light of the submissions made on either side. It is an admitted fact that there was a loss of Rs.3,89,90,692/- under the head “income from business and profession” and, therefore, the learned CIT(A), in our opinion, is justified in upholding the action of the CPC in denying deduction under section 80-IA of the Act, which the assessee basically claimed the deduction on account of income from other sources. Learned AR could not substantiate that the deduction under section 80-IA of the Act has been claimed against the gross total

In the result, appeal of the assessee in for the assessment year 2019-20 is dismissed.

To sum up,