DCIT, CIRCLE-4(1)(1), AHMEDABAD, VEJALPUR, AHMEDABD vs. VIJAY M. MISTRY CONSTRUCTION PRIVATE LIMITED, AHMEDABAD

ITA 963/AHD/2025Status: DisposedITAT Chandigarh06 October 2026AY 2017-189 pages
AI SummaryPartly Allowed

What were the facts?

These appeals by the Revenue challenge the orders of the NFAC for Assessment Years 2017-18 and 2018-19, concerning disallowances made by the Assessing Officer (AO). For AY 2017-18, the Revenue disputes the deletion of a Rs. 20,83,62,422/- disallowance under Section 80IA and a Rs. 1,66,667/- disallowance under Section 14A. For AY 2018-19, the Revenue disputes the deletion of a Rs. 8,04,22,541/- disallowance under Section 80IA and a Rs. 16,50,000/- disallowance under Section 80G. The assessee, Vijay M. Mistry Construction Private Limited, is engaged in construction of infrastructure projects.

What did the Tribunal hold?

On the issue of Section 80IA deduction, the Tribunal followed its coordinate bench's decision in the assessee's own case for earlier years, which held the assessee eligible after examining tender documents and nature of work. The Tribunal found no material change in the current year's projects and noted the Revenue failed to produce distinguishing features or tender documents. Thus, the deletion of disallowance under Section 80IA was upheld for both assessment years, dismissing the relevant grounds of the Revenue. Regarding Section 14A, the Tribunal found the CIT(A)'s deletion incorrect because the assessee earned exempt income and the AO's disallowance was justified. The addition of Rs. 1,66,667/- was upheld for AY 2017-18. The Tribunal also held that this disallowance must be considered for book profit computation under Section 115JB. For Section 80G, the Tribunal noted that only donations to Swachha Bharat Kosh and Clean Ganga Fund are ineligible. As the assessment and appellate orders did not specify the recipient of the CSR donation, the matter was set aside to the AO to verify if the donation was to these specific funds and, if not, to examine other eligibility conditions under Section 80G. The ground was allowed for statistical purposes.

What were the issues?

1. Whether the assessee, a contractor executing government works contracts, is eligible for deduction under Section 80IA(4) of the Income Tax Act, 1961, as it did not meet the definition of a 'developer' (Revenue's contention). The assessee argued that a coordinate bench in its own case for earlier years had allowed the deduction after examining tender documents and nature of work, and the current year's activities are identical. 2. Whether the deletion of disallowance under Section 14A read with Rule 8D was justified, given the assessee earned exempt income and the AO made an addition of Rs. 1,66,667/- (Revenue's contention). The assessee contended the addition was not required for book profit computation under Section 115JB. 3. Whether the deletion of disallowance of Rs. 16,50,000/- under Section 80G for CSR expenses was justified (Revenue's contention). The assessee argued the donation was not to Swachha Bharat Kosh or Clean Ganga Fund, which are specifically debarred, and relied on a coordinate bench decision. The Revenue also raised a ground that past ITAT orders relied upon by the CIT(A) were under appeal before the Gujarat High Court.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 14A,Section 115JB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI NARENDRA PRASAD SINHA & SHRI SANJAY KUMAR

For Appellant: Shri Mehul K. Patel, Advocate
For Respondent: Shri Kiran Unavekar, CIT-DR
Hearing: 01.09.2026Pronounced: 06.10.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

These two appeals are filed by the Revenue against the separate orders of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] both dated 13.02.2025 for the Assessment Years (A.Y.) 2017-18 and 2018-19 in the proceeding u/s 143(3) of the Income Tax Act [hereinafter referred as “the Act”]. As the main issue involved in the two appeals is common, both the matters were heard together and are being disposed of vide this common order for the sake of convenience. We will first take up the appeal f

The order continues below.

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