C I T JAIPUR vs. M/S OM METALS INFRAPROJECTS LTD

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ITA/33/2012HC RajasthanRJHC02066395201222 August 20172 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue regarding the deduction under Section 80IA is squarely covered by previous decisions. Specifically, it referred to the Bombay High Court's decision in Commissioner of Income Tax, Central II vs. ABG Heavy Industries Ltd. (2010) 322 ITR 323 (Bombay), against which a Special Leave Petition (SLP) was dismissed by the Supreme Court on December 6, 2010. Additionally, the High Court cited its own decision in Tax Appeal No. 631/2008 (CIT, Ajmer vs. M/s Shiva Construction Pvt. Ltd.) decided on May 25, 2017. Based on these precedents, the High Court concluded that the issue should be answered in favour of the assessee and against the department. The operative direction was to dismiss the appeal.

What were the facts?

The appeal was filed by the Commissioner of Income Tax-I, Jaipur (the Revenue) against the judgment and order of the Income Tax Appellate Tribunal (ITAT). The ITAT had partly allowed the appeal of M/s OM Metals Infra Projects Ltd. (the assessee). The core of the dispute revolves around a deduction claimed by the assessee under Section 80IA(4) of the Income Tax Act, 1961. The amount in dispute is Rs. 16,89,16,692/-. The High Court admitted the appeal and framed a specific question of law for consideration.

What were the issues?

1. Whether on the facts and circumstances of the case, the Tribunal was justified in allowing a deduction of Rs. 16,89,16,692/- under Section 80IA(4) by holding that the assessee is a 'developer of the infrastructure project', and ignoring the amendments made by the Finance Act, 2007 and Finance Act, 2009 with retrospective effect from April 1, 2000, which inserted an explanation stating that Section 80IA(4) should not apply to persons who execute works contracts entered into with an undertaking or enterprise? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the fact that the Tribunal partly allowed the assessee's appeal implies the assessee argued in favour of the deduction. Revenue's Contention: The Revenue contended that the assessee was not eligible for the deduction under Section 80IA(4) because it executed a works contract, and the retrospective amendments to the section should have been applied, disallowing such deductions.

Which sections of the Income-tax Act were involved?

Section 80IA(4)

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 33 / 2012 Commissioner of Income Tax-I, New Central Revenue Building, Statue Circle, Jaipur (Raj) ----Appellant Versus M/s OM Metals Infra Projects Ltd., Om Tower, M.I. Road, Jaipur ----Respondent

_____________________________________________________ For Appellant(s) : Mr. Anuroop Singhi with Mr. Aditya Vijay For Respondent(s) : Mr. Sanjay Jhanwar with Ms. Archana, Mr. Mahendra Gargeiya _____________________________________________________ HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Order 22/08/2017

1.

By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has partly allowed the appeal of the assessee. 2. This Court while admitting the matter framed the following question of law:- “i) Whether on the facts and circumstances of the case, the Tribunal was justified in allowing deduction of Rs. 16,89,16,692/- under Section 80IA(4) by holding that the assessee is ‘developer of the infrastructure project and ignoring the amendment made by the Finance Act, 2007 and Finance Act, 2009 with retrospective effect 1.4.2000 inserting that the explanation which clearly states that section 80IA(4) should not apply to persons who execute

(2 of 2)

works contract entered into with undertaking or enterprise?” 3. The issue regarding 80IA deduction is squarely covered by the decision of Bombay High Court Commissioner of Income Tax, Central II vs. ABG Heavy Industries Ltd. reported in (2010) 322 ITR 323 (Bombay) against which the SLP came to be dismissed on 6th December, 2010 and also decision of this Court in Tax Appeal No. 631/2008 (CIT, Ajmer vs. M/s Shiva Construction Pvt. Ltd.) decided on 25th May, 2017. 4. In that view of the matter, the issue is answered in favour of the assessee against the department. 5. The appeal stands dismissed. (INDERJEET SINGH)J. (K.S.JHAVERI)J. A.Sharma/

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