PRINCIPAL COMMISSIONER OF I T JAIPUR-1 vs. M/S OM METALS INFRA PROJECTS LTD

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ITA/87/2016HC RajasthanRJHC02055785201622 August 20172 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue regarding the Section 80IA deduction is squarely covered by the decision of the Bombay High Court in Commissioner of Income Tax, Central II vs. ABG Heavy Industries Ltd. reported in (2010) 322 ITR 323 (Bombay), against which the Special Leave Petition (SLP) was dismissed by the Supreme Court on December 6, 2010. Furthermore, the High Court noted that its own court had decided a similar matter in Tax Appeal No. 631/2008 (CIT, Ajmer vs. M/s Shiva Construction Pvt. Ltd.) on May 25, 2017. Consequently, the issue was answered in favour of the assessee and against the department. The appeal filed by the department was dismissed.

What were the facts?

The appellant, Pr. Commissioner of Income Tax-I, Jaipur, challenged a judgment and order of the Income Tax Appellate Tribunal (ITAT) which had dismissed the department's appeal. The ITAT's decision allowed the respondent assessee, M/s OM Metals Infra Projects Ltd., a deduction of Rs. 9,03,62,294/- under Section 80IA(4) for the assessment year 2007-08. The department's grievance was that the ITAT relied on its earlier order without considering amendments made by the Finance Act, 2007 and Finance Act, 2009, which introduced an explanation stating that Section 80IA(4) should not apply to persons executing works contracts.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal was justified in merely relying upon its earlier order passed in ITA No. 911/JP/2010 for assessment year 2007-08, allowing deduction of Rs. 9,03,62,294/- under Section 80IA(4) by holding that the assessee is a 'developer of the infrastructure project', and ignoring the amendment made by the Finance Act, 2007 and Finance Act, 2009 with retrospective effect from 1.4.2000, inserting an explanation that Section 80IA(4) should not apply to persons who execute works contract entered into with an undertaking or enterprise? The assessee argued that the issue is covered by earlier decisions. The revenue contended that the Tribunal failed to consider the retrospective amendments to Section 80IA(4) which exclude works contractors from claiming the deduction.

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. 87 / 2016 Pr. 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, Church 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 dismissed the appeal of the department. 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 merely relying upon its earlier order passed in ITA No. 911/JP/2010 for assessment year 2007-08 and whereby allowing deduction of Rs. 9,03,62,294/- 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

(2 of 2)

retrospective effect 1.4.2000 inserting that the explanation which clearly states that section 80IA(4) should not apply to persons who execute 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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