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Facts
The appeals concerned the disallowance of deduction under Section 80-IA(4) for infrastructure development projects, preliminary expenses, employee's contribution to PF, and disallowance under Section 14A for earning tax-exempt income. Additionally, issues regarding set-off of loss of a transferor company and penalty for non-offering tax on interest income were raised.
Held
The Tribunal restored the issue of eligibility for deduction under Section 80-IA(4) to the CIT(A) for detailed examination. The disallowance of preliminary expenses was allowed. The ground regarding employee's contribution to PF was dismissed, and the issue of Section 14A disallowance was restored to CIT(A). The claim for set-off of loss of a transferor company was also restored to CIT(A). The penalty levied was deleted, and certain appeals were partly allowed.
Key Issues
Whether the assessee is eligible for deduction under Section 80-IA(4) as a developer or works contractor, and the allowability of other claims and disallowances.
Sections Cited
80-IA(4), 35D, 14A, 80A(5), 271(1)(c)
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Income Tax Appellate Tribunal, “ B ” BENCH, AHMEDABAD
Before: Shri Sanjay Garg & Shri Makarand V. Mahadeokar
Consolidated Appeals (4)
Per Sanjay Garg, Judicial Member:
The captioned appeals have been preferred by the assessee against the separate orders of the Commissioner of Income Tax (Appeals), Ahmedabad , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 [hereinafter referred to as ‘CIT(A)’] pertaining to different Assessment Years (AYs). Since common facts and issues are involved in all these appeals, these were heard together and are being disposed of by a consolidated order. Assessee’s appeal in AY 2009-10 is taken as a lead case for the purpose of narration of facts.
2. The assessee in this appeal has taken the following grounds of appeal:
1. The Learned Commissioner of Income Tax (Appeals) - VIII, Ahmedabad erred in confirming the disallowance of claim of deduction of Rs.5,69,97,847/- u/s. 80-1A(4) of the Act made by the Assessing Officer by failing to appreciate that the appellant satisfied all conditions u/s. 80-1A(4) of the Act.
2. In view of the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) - VIII, Ahmedabad erred in holding that the appellant was a contractor and not a developer of infrastructure facilities.
3. The Learned Commissioner of Income Tax (Appeals) - VIII, Ahmedabad erred in confirming the disallowance made by the Assessing Officer of Rs.13,40,328/- by way of preliminary expenses.
4. The Learned Commissioner of Income Tax (Appeals) - VIII, Ahmedabad erred in upholding the disallowance made by the Assessing Officer of Rs.17,80,499/- by way of employee's contribution towards Provident Fund.
5. The Learned Commissioner of Income Tax (Appeals) - VIII, Ahmedabad erred in partly sustaining the disallowance / addition u/s. 14A of the Act.
The appellant craves leave to add, amend, alter and withdraw any ground of appeal anytime up to the hearing of this appeal.”
3. Ground Nos.1 & 2 :- The assessee vide Grounds Nos.1 & 2 has agitated against the action of the Ld.CIT(A) in confirming the disallowance of claim of deduction of Rs.5,69,97,847/- u/s.80IA(4) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) made by the Assessing Officer (AO.).
, 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 The sole issue raised for adjudication vide these grounds is as to whether the assessee is a Developer or Works Contractor?
3.1. As per the provisions of section 80-IA(4) of the Act, any Enterprise carrying on the business of (i) Developing or (ii) Operating and Maintaining or (iii) Developing, Operating and Maintaining any Infrastructure Facility as specified therein, and subject to fulfilment of conditions as prescribed is entitled to deduction of an amount equal to 100% of the profits and gains derived from such business for ten consecutive assessment years. However, as per the explanation to section 80IA of the Act, the aforesaid deduction is not allowable in relation to a business which is in the nature of ‘works contract’ awarded by any person including State or Central Government. Admittedly, the assessee is in the infrastructure development business. The assessee in contract with Central Government/State Government has constructed various infrastructure projects and claimed deduction as a Developer under the provisions of section 80IA(4) of the Act. The lower authorities, however, were of the view that the construction/development work carried out by the assessee was on account of the contract work awarded by the Central/State Government and, therefore, the activity carried out by the assessee would fall within the definition of a ‘works contract’ executed by the assessee. The Ld.Counsel for the assessee has relied upon the terms and conditions of the tender documents relating to various projects executed/developed by the assessee. The Ld.Counsel for the assessee has submitted that the projects carried out by the assessee would fall within the definition of infrastructure facilities as provided under the relevant provisions of section 80IA(4) of the Act. That, in 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 developing the said projects, assessee’s financial risks were involved and the projects during the development stage were owned by the assessee. That, the responsibility of designing, structuring, constructing and arrangements of labour and machinery, insurance and dominant control over the projects was that of the assessee making, him a Developer and not a works Contractor. The Ld.Counsel for the assessee has very fairly submitted that all infrastructure projects for which the deduction u/s.80IA(4) was claimed for the year under consideration were brought forward projects from earlier years. He has further submitted that for AY 2007-08 and AY 2008-09, the Tribunal has remanded the matter to the file of the CIT(A) for want of necessary details including the project-wise tender documents for the purpose of arriving at the correct conclusion as to whether the assessee falls within the definition of a ‘developer’ or a ‘works Contractor’ for the purpose of deciding the eligibility of the assessee to claim deduction u/s.80IA(4) of the Act. Though, the Ld.Counsel for the assessee has submitted that the project-wise tender documents and other details relating to different projects carried out by the assessee have been furnished for the year under consideration. However, after a lengthy deliberation, it was submitted by both the Ld.Representatives of the parties that the tender documents and other financial details and other relevant evidences relating to each of the project need to be thoroughly examined at the level of the CIT(A). Moreover, the matter relating to claim of deduction u/s.80IA(4) of the Act in respect of the same projects has already been restored to the file of the CIT(A) in earlier assessment years 2007-08 & 2008-09 and, therefore, the matter relating to the year under consideration is also need to be restored to the file of the CIT(A). We, accordingly, restore the matter relating to the issue of claim of deduction , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 u/s.80IA(4) of the Act for the year under consideration to the file of the CIT(A) with a direction that the Ld.CIT(A) will thoroughly examine project- wise the terms conditions of the tender documents, financial risk bearing responsibility and the dominant control over the project as well as the terms of payment of consideration, etc. and all other parameters including all those parameters relied upon by the assessee which will have a bearing on the issue under consideration and will give a reasoned finding by way of a speaking order relating to each of the contention raised by the assessee. It is made clear that the finding whether the assessee is a Developer or a Works Contractor cannot be given by adopting any straight jacket formula, rather, the eligibility of the assessee to claim as a Developer has to be examined in relation to each of the project carried out by the assessee. The Ld.CIT(A), if so required, may call upon the remand report from the AO relating to any fact/facts or issues and thereafter to adjudicate this issue in accordance with law.
Ground No.3:- The assessee vide Ground No.3 has agitated against the action of the CIT(A) in confirming the disallowance made by the AO of Rs.13,40,328/- in respect of preliminary expenses claimed by the assessee on issue of shares for raising capital u/s.35D of the Act.
The Lower authorities disallowed the said expenditure observing that the same was capital in nature. Before us, the Ld.Cousel for the assessee has relied upon the following case-laws to contend that the preliminary expenses incurred for increase in authorised capital are allowable u/s.35-D of the Act. 1. In the case of CIT vs. Shree Synthetics Ltd. (1986) 162 ITR 819 (MP HC). 2. In the case of EID Parry (India) Ltd. vs. DCIT 256 CTR 104 (Madras HC). , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15
In the case of CIT vs. Multi Metals Ltd. (1991) 188 ITR 151 (Rajasthan HC). 4. (2017) 80 taxmann.com 235 (Mum Trib).
5.1. As per the provisions of section 35D of the Act, where an Indian Company or a person resident in India, either before the commencement of his business or after the commencement of his business or in connection with the extension of his Undertaking or set up a new Unit, incurs any expenditure as specified sub-section (2) of section 35D of the Act, he shall be allowed a deduction as prescribed u/s.35D(1) of the Act. It is to be mentioned here that u/s.35D(2) (c) clause (iv), the expenditure incurred in connection with the issue, for public subscription of shares or debentures of the company, being underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus is allowable as deduction. The Hon’ble Madhya Pradesh High Court in the case of Shree Synthetics Ltd.(supra) “has held that the word “being” in section 35D is by way of illustration and is not restricted only to words “underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of prospectus.” It has been held that the expenditure incurred in connection with refunds over subscription in relation to issue of shares would fall within the provision of Section 35D(2)(c)(iv) and would be allowable expenditure. Similar view has been taken by the Hon’ble Madras High Court in the case of EID Parry (India) Ltd. vs. Dy.CIT [2012] 23 taxmann.com 348 (Mad.), wherein, the Hon’ble Madras High Court has held that where the assessee had incurred expenditure in connection with issuance of Euro share which was directly relatable to expansion of capital base of company for raising of new projects, it would be allowable deduction , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 u./s.35D of the Act. Admittedly, the assessee, in this case, has raised capital for carrying out new infrastructure projects. Therefore, the claim of the assessee for deduction u/s.35D of the Act is allowable claim. This issue is, accordingly, decided in favour of the assessee and the AO is directed to allow the deduction to the extent as permissible u/s.35D of the Act.
Ground No.4:- The assessee vide ground No.4 has agitated against the action of the lower authorities in disallowing the claim of deduction of Rs.17,80,499/- on account of delayed contribution towards employees’ contribution towards Provident Fund.
The Ld.Counsel for the assessee has been fair enough to admit that this issue is squarely covered against the assessee by the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd Vs. CIT [2022] 143 taxmann.com 278 (SC). This ground is accordingly dismissed.
Ground No.5:- Vide Ground No.5, the assessee has agitated against 8. the action of the lower authorities in sustaining the disallowance/addition of expenditure incurred for earning of tax exempt income u/s.14A of the Act.
The Ld.Counsel for the assessee has submitted that the lower authorities were not justified in making the disallowance of expenditure u/s.14A of the Act. He has contended that the assessee, during the assessment year, had earned tax exempt income of Rs.86,236/-, only, whereas the disallowance u/s.14A of the Act has been made to the extent of Rs.1,43,80,808/-. He has submitted that as per the various case-laws, the 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 disallowance u/s.14A of the Act cannot exceed the tax exempt income earned by the assessee. The Ld.Counsel for the assessee, in this respect, relied upon the decision of Hon’ble Delhi High Court in the case of Cheminvest Ltd. vs. CIT reported at 378 ITR 33 (Delhi) and also in the case of Joint investments Pvt.Ltd. reported at 116 DTR 289. The Ld.Counsel for the assessee has further submitted that the assessee was having sufficient own/interest-free funds available with it to make the investments and, therefore, no disallowance in relation to interest expenditure was warranted in this case. The Ld.Counsel for the assessee has further submitted that the assessee did not incur any administrative expenses. He, therefore, has submitted that no disallowance u/s.14A of the Act was warranted.
The Ld.DR, on the other hand, relied upon the findings of the lower authorities.
We note that aforesaid contentions raised by the assessee go to the root of the issue and need to be verified/examined at the hands of the CIT(A). This issue is, accordingly, restored to the file of the CIT(A) with a direction to consider the aforesaid contentions raised by the assessee and adjudicate the issue after considering the accounts of the assessee.
In view of the observations made above, this appeal of the assessee is treated as partly allowed for statistical purposes. , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15
Ground Nos.1 to 3:- The assessee vide Ground Nos.1 to 3 has agitated against the action of the lower authorities in not allowing the claim of deduction of Rs.44,79,599/- u/s.80-IA of the IT Act. This issue is identical to that has been discussed above while adjudicating the appeal of the assessee for AY 2009-10. However, the Ld.Counsel for the assessee has brought to our attention a distinguishing fact that for the year under consideration, the assessee did not claim the aforesaid deduction u/s.80-IA(4) of the Act in the return of income. However, the relevant certificate of the C.A. in Form 10CCB was attached with the return of income, wherein, the concerned auditor has certified that the assessee qualifies the conditions stipulated u/s.80-IA(4) for claim of deduction as a Developer and is eligible to claim deduction u/s.80IA(4) of the Act. The Ld.Counsel for the assessee, in this respect, has submitted that at the time of filing of the return for the year under consideration, the deduction was rejected for earlier assessment year by the AO and the decision of the appellate authority [CIT(A)] had not been rendered. In the circumstances, the return of income was filed by making full tax payment on the income as if such deduction may not be available. However, the assessee had duly filed the Form 10CCB and the claim was duly pressed during the assessment proceedings. It has been submitted that the decision not to claim the deduction in the return of income was taken to abide by the provisions of law as were decided by the AO in the earlier assessment year so as to avoid any further complication including levy of penalty u/s.271(1)(c) of the Act for making inadmissible claim. , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15
The Ld.DR, on the other hand, has relied upon the provisions of section 80A(5) of the Act to submit that where the assessee failed to make a claim his return of income for any deduction under the Chapter ”C - Deductions in respect of certain incomes”, no deduction shall be allowed to him thereunder.
We have considered the rival contentions. In this case, admittedly, the assessee did not claim the deduction u/s.80IA(4) of the Act specifically in the return of income. However, it is also not disputed that the assessee had duly filed Form 10CCB along with return of income, wherein, the claim was put forward. The claim was also specifically made during the course of assessment proceedings. It was explained to the AO that the claim was not made in the return of income as the assessee’s similar claim for the earlier assessment year was rejected by the AO and by that time the decision of the CIT(A) was not rendered. That, this decision was taken to abide by the provisions of law and the decision of the AO and to avoid further complications and disputes. Admittedly, the assessee had claimed deduction u/s.80-IA of the Act in respect to the same projects in the earlier assessment year. For the year under consideration, the same projects were brought forward from earlier years. It is not a case where the assessee did not explicitly made any claim of 80IA deduction. It can be said that the assessee made the claim half-heartedly.
16.1. It is pertinent to mention here that it is a common practice that, if any, claim made by an assessee in the Income Tax return is disallowed or any 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 addition is made into the income of the assessee, the concerned AO/Income Tax Authority simultaneously initiate penalty proceedings u/s.271(1)(c) of the Act for making false/inadmissible claim and under such circumstances, assessee has not only to face the burden of penalty proceedings, but is oftenly burdened with the hefty penalty ranging from 100% to 300% of the tax amount sought to be evaded It becomes a matter of debate before the income tax authorities as well as in appellate proceedings as to whether the claim made by the assessee was bonafide or it was deliberate wrong claim. We note that in the facts and circumstances of the case, the claim of the assessee made u/s.80IA being rejected by the AO in the earlier assessment year and the order of the appellate authority [CIT(A)] was not rendered at the time of filing of the return for the year under consideration, it was a very difficult decision for the assessee either to make a claim or not of deduction u/s.80IA(4) of the Act in the return of income for the year under consideration. However, as discussed above, the assessee did not abandon his claim entirely, rather, the claim was made by way of attaching Form 10CCB of the auditor wherein, the claim of deduction u/s.80IA was pressed. The claim was also pressed during assessment proceedings. Though there is a bar u/s.80A(5) of the Act for allowing such claim, if the same has not been made in the return of income, however, in our view, the bar contained of section 80A(5) has to be considered vis-à-vis difficulty of the assessee to make such claim in view of the apprehension of being burdened with penalty in case the claim is disallowed by the AO. Even such an assessee may be prosecuted also for willful attempt to evade tax, etc. Moreover, it is not a case where the assessee has completely given up/abandoned his claim of deduction as noted above. In the peculiar facts and circumstances of this case, we are of the view that the assessee’s , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 claim should not be rejected because of the bar contained u/s.80A(5) of the Act and the same is required to be allowed if the assessee otherwise is eligible for the same. We hold accordingly.
So far as the question as to whether the assessee is eligible to claim of deduction u/s.80IA(4) of the Act as a ‘Developer’ or he is not eligible being a ‘Works Contractor’ is concerned, we have already restored the issue to the file of the Ld.CIT(A), while adjudicating an identical issue for the earlier assessment 2009-10 as noted above. Therefore, the issue as to whether the assessee is a ‘Developer’ or ‘Works Contractor’ for the year under consideration in relation to any or all the projects carried out by the assessee is also restored to the file of CIT(A) with the identical directions as given while adjudicating the issue for AY 2009-10.
Ground No.4:- The assessee, vide this Ground, has agitated the confirmation of disallowance of Rs.9,53,454/- made by the lower authorities u/s.14A of the Act. This ground is identical to that has been discussed above as Ground No.5 in assessee’s appeal for AY 2009-10 in . Our findings given above on the identical issue will mutatis mutandis apply herein, and this ground is, accordingly, restored to the file of CIT(A) for adjudication afresh with identical directions as given above while adjudicating ground No.5 of assessee’s appeal for AY 2009-10.
Ground No.5:- The assessee, vide this Ground No.5, has agitated the disallowance made by the lower authorities towards Employees’ Contribution to P.F. , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 19.1. As noted above, this issue is squarely covered against the assessee by the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd Vs. CIT [2022] 143 taxmann.com 278 (SC). This ground of appeal of the assessee is, accordingly dismissed.
20. Ground No.6:- The assessee, vide this Ground No.6, has agitated the confirmation of disallowance for claim of set off of loss of the transferor company to the assessee-company.
20.1. The lower authorities have disallowed the aforesaid claim of deduction on the ground that the revised return was not filed by the resultant company and that the consolidated accounts were not furnished.
The Ld.Counsel for the assessee, however, has submitted that the consolidated accounts were duly filed, but the lower authorities have failed to consider the same. He, in this respect, has referred to page Nos.94 to 106 of the paper-book. The Ld.Counsel for the assessee has further submitted that even the working of the claim was also furnished to the CIT(A). He has further submitted that though the merger was effected vide order of the Hon’ble Gujarat High Court dated 18/03/2011, however, the merger was effective from 01/04/2009. The Ld.Counsel for the assessee, by relying on the decision of Hon’ble Supreme Court in the case of Marshall Sons & Co. (India) Ltd. [1996[ 86 Taxman 619 (SC), has submitted that the assessee is entitled to set off of loss of the transferor company in the year under consideration. , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15
After considering the rival submissions, we restore this issue to the file of the Ld.CIT(A) with a direction to examine the claim of the assessee and adjudicate upon it by way of a speaking order in accordance with law, after considering the consolidated accounts and to allow the set off of loss of the transferor company in the hands of the merged company, if found admissible.
This appeal of the assessee is treated as partly allowed for statistical purposes. for AY 2011-12: 24. The assessee, in this appeal, has taken as many as six grounds of appeal.
25. Ground Nos.1 to 3:- These grounds are relating to disallowance of deduction u/s.80IA(4) of the IT Act.
25.1. For the year under consideration also,the assessee did not claim deduction u/s.80IA(4) in the return of income citing similar reasons as noted above while adjudicating Ground Nos.1 to 3 for assessment proceedings appeal for AY 2010-11.
25.2. In view of our findings given above, this issue is decided in favour of the assessee by holding that the assessee’s claim will be considered u/s.80IA(4) of the Act irrespective of the fact that the same was not claimed , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 in the return of income for the reasons/apprehension as discussed above in Ground Nos.1 to 3 of assessee’s appeal for AY 2010-11.
So far as the issue relating to eligibility of the assessee to claim deduction u/s.80IA(4) of the Act being a Developer or non-eligibility being a ‘Works Contractor’ is concerned, the issue for the year under consideration is restored to the file of the CIT(A) with the identical directions as given while adjudicating the identical issue for the assessee’s appeal for AY 2009-10.
Ground No.4:- Ground No.4 of assessee’s appeal is relating to disallowance of Rs.26,54,006/- u/s.14A of the Act. The facts and pleadings made by the Ld. Representatives of the parties are identical to that have been made on this issue is earlier assessment years. This issue is, therefore, restored to the file of ld.CIT(A) with identical directions as given above while deciding the identical issue in the earlier assessment years 2009-10 & 2010-11.
Ground No.5:- Ground No.5 of this appeal is against the disallowance 28. relating to Employees’ Contribution to P.F.
28.1. This ground is assessee’s appeal is dismissed being covered by the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd. (Supra).
Ground No.6:- The assessee vide Ground No.6 has agitated the action of the CIT(A) in confirming the addition of Rs.13,63,356/- made by the AO by way of addition interest on income tax refund. , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15
The Ld.Counsel for the assessee has submitted that the interest on income-tax refund did not accrue to the assessee in the year under consideration as the various issue involved effecting the tax liability are pending adjudication in appeal.
As the issue effecting re-fund/taxes payable are under adjudication in this appeal and have not attained finality, hence, we find merit in the aforesaid contention of the Ld.Counsel for the assessee. It is directed that the interest on refund, if any, will be charged to tax in the year in which the matter attains finality and interest, if any, is actually received by the assessee. The impugned addition made by the AO for the year under consideration is accordingly ordered to be deleted.
This appeal of the assessee is treated as partly allowed for statistical purposes. for AY 2012-13 33. The assessee in this appeal has taken as many as four grounds of appeal.
34. Ground Nos.1&2:- These grounds are relating to the claim of deduction u/s80IA(4) of the IT Act. The assessee has duly made the aforesaid claim in the return of income for the year under consideration. However, in view of our findings given above, this issue is restored to the file of CIT(A) with identical directions as given above to determine project- , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 wise as to whether the assessee would fall within the definition of ‘Developer’ or ‘Works Contractor’.
35. Ground No.3:- This ground is relating to disallowance u/s.14A of the Act of Rs.19,24,147/-. The facts and issue being identical to that has been raised in earlier assessment years, hence, this ground is also restored to the file of CIT(A) with identical directions as given above on the identical issue of assessee’s appeal for assessment year 2009-10.
36. Ground No.4:- Ground No.4 is relating to disallowance of Employees’ Contribution towards Provident Fund. This issue as covered against the assessee in our findings contained in para 10 of this order. This ground is, accordingly, disposed of.
In the result, the assessee’s appeal is treated as partly allowed for statistical purposes. for AY 2013-14 38. The assessee in this appeal has taken three grounds of appeal.
39. Ground Nos.1& 2:- Ground Nos.1 & 2 are relating to allowability of the assessee’s claim of deduction u/s.80-IA(4) of the Act.
40. In view of the discussion made above, this issue is restored to the file of ld.CIT(A) with identical directions as above while deciding the identical issue in the earlier assessment years AY 2009-10 to AY 2012-13.
, 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 41 Ground No.3:- Ground No.3 is regarding disallowance of assessee’s claim u/s.14A of the Act. The facts and issue involved being identical to that has been discussed above in appeal relating to earlier assessment years, this issue is, accordingly, restored to the file of ld.CIT(A) with identical directions as above while deciding the identical issue in the earlier assessment years 2009-10 to 2012-13.
This appeal of the assessee is treated as partly allowed for statistical purposes.
ITA No.2171/Ahd/2018 for AY 2014-15
The assessee in this appeal has taken three grounds of appeal.
44. Ground Nos.1& 2:- Ground Nos.1 & 2 are relating to the claim of deduction u/s.80-IA(4) of the Act. The facts and issue, being identical to that have been discussed in appeals relating to earlier assessment years. This issue is accordingly restored to the file of ld.CIT(A) with identical directions as given above while deciding the identical issue in the earlier assessment years 2009-10 to 2013-14.
45. Ground No.3:- Ground No.3 is against disallowance of Employees’ Contribution to P.F.
, 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15
This ground is assessee’s appeal is dismissed being covered by the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd. (Supra).
This appeal of the assessee is treated as partly allowed for statistical purposes.
ITA No.2168/Ahd/2018 for AY 2011-12
This appeal of the assessee is relating to levy of penalty u/s.271(1)(c) of the Act. The penalty in this case has been levied for not offering the tax on interest on the Income-tax refund for AY 2009-10.
48.1. As observed above, while deciding the issue in quantum appeal, it has been held by us that the various issues effecting the tax liability of the assessee have not attained finality and, hence, under the circumstances, the tax will be payable on the interest on re-fund in the year in which it will be received. Accordingly, the present penalty has no legs to stand and the same is ordered to be deleted. , 658 & 659/Ahd/2016 and to 2171/Ahd/2018 M.S. Khurana Engineering Ltd. vs. The Jt.CIT Range-4 Asst.Years: 2009-10 to 2014-15 is allowed. Order pronounced in the Open Court on 31/07/2025.