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Income Tax Appellate Tribunal, INDORE BENCHE, INDORE
Before: SHRI CHANDRA MOHAN GARG & SHRI O.P.MEENA
आदेश / O R D E R
PER CHANDRAMOHAN GARG, J.M:
This appeal is filed by the assessee against the order of Ld.
Commissioner of Income Tax (Appeals)-2, Bhopal [hereinafter
referred to as the CIT(A)] dated 03.02.2016 and pertains to
assessment year 2911-12 as against appeal decided in assessment
order passed u/s 143(3) of the Act dated 14.03.2014 of ACIT, 3(1),
Bhopal [hereinafter referred to as the AO]. Earlier this appeal was
dismissed as ex-parte quasis and subsequently it was recalled by
order dated 24.05.2017 posted in the MA No.24/2017 of the
appellant-assessee.
The following grounds have been raised by the assessee:-
That impugned order passed is bad in law as well as on the facts. It is based on incorrectness interpretation of law and the facts have also been incorrectly construed.
2.1 That on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in confirming AO’s action for disallowing deduction u/s 80!A(4) amounting to Rs.1,23,33,267/- without
M/s Vinod Kumar Shukla Const. Pvt. Ltd, ITA No.546/Ind/2016 Assessment Year 2011-12 Page 3 of 8
appreciating the fact that during the assessment year in question
assessee has developed and constructed new infrastructure
facilities viz, constructed new bridge and roads.
2.2 That on the facts and in the circumstances of the case and
in law, the ld. CIT(A) failed to appreciate the fact that the
explanation to Section 80IA(4) inserted by Finance Act, 2009, with
effect from 01.04.2000 is not applicable on the appellant company.
That on the facts and in the circumstances of the case and
in law, the ld. CIT(A) erred in upholding the addition of
Rs.2,00,000/- out of disallowance of Rs.3,00,000/- made on
account of business promotion expenses.
The Ld. Assessee’s representative (AR) reiterated that the
asseesee’s written submissions filed before the CIT(A)
which reads as follows;
“The assessee company is engaged in the business of
construction work, by undergoing contract with the State
Government and Central Government Department, specially to
construct Bridges and Roads, by fulfilling all the provisions laid
down in the Act, with reference to Section 80IA(4)(i).
Further, the assessee being a developer of the infrastructure
facilities is fully entitled for exemption under the said Section. As
M/s Vinod Kumar Shukla Const. Pvt. Ltd, ITA No.546/Ind/2016 Assessment Year 2011-12 Page 4 of 8
the assessee fulfill all the conditions required to avail the benefits available under the Act. The claim of u/s 80IA(4) is genuine considering the fact that the assessee is engaged in the development of infrastructure work awarded by the Government”.
Replying to the above the Ld. Departmental
Representative (DR)drew our attention towards page 4.4
of the first appellate order and submitted that as per
written submission of the assessee no appeal has been
filed for Assessment Year 2010-11 i.e. for immediately
preceding year and the issue is covered in favour of the
revenue and against the assessee by the order of the
ITAT, Indore Bench in the case of ACIT V/s M/s. R.K.
Gupta Contractors and Engineers Pvt. Ltd dated
28.7.2010 passed in ITA No.517 & 522/Ind/2009.
On careful consideration of facts and circumstances of
the case and rival submission we are of the view that
ITAT, Indore Bench has adjudicated the issue in the case
of ACIT V/s M/s. R.K. Gupta Contractors and Engineers
Pvt. Ltd (supra) wherein the tribunal has held as follows;
M/s Vinod Kumar Shukla Const. Pvt. Ltd, ITA No.546/Ind/2016 Assessment Year 2011-12 Page 5 of 8
“we have heard the rival submissions of the parties and have
gone through the material available on the file. A clarificatory
Explanation below sub-section (13) of Section 80IA of the Act was
inserted with retrospective effect from 1.4.2000 by the Finance Act,
2009, as per which nothing contained in this section shall apply in
relation to a business referred to in sub-section (4) which is in the
nature of a “works contract” awarded by any person including the
Central or State Government and executed by the Undertaking or
enterprise referred to in sub-section (1). The assessment year
involved in the present appeal being 2006-07, therefore, this
Explanation is clearly applicable to the facts of the present appeal.
It has been specifically provided that the provisio0ns u/s 80IA of the
Act shall not apply to a business referred to in sub-section (4) of
Section 80IA of the Act, which is of the nature of “works contracts”.
In sub-section (1), the word “any business” has been mentioned.
Identical issue has been deliberated upon and decided by the
Tribunal in the aforesaid case, the relevant portion whereof has
been reproduced above. We, therefore, hold that since no deduction
is allowable to the assessee u/s 80IA of the Act, the Ld. CIT(A) was
not justified in granting the same. The order of Ld. CIT(A) on this
issue is, therefore, set-aside and the appeal of the Revenue is
allowed.
M/s Vinod Kumar Shukla Const. Pvt. Ltd, ITA No.546/Ind/2016 Assessment Year 2011-12 Page 6 of 8
As far as the appeal of the assessee (ITA No.522/Ind/2009) is concerned, since while deciding the appeal of the Revenue, we have held that no deduction u/s 80IA of the Act is allowable to the assessee, there is no question of bifurcation of income/receipts for the purpose of deduction u/s 80IA of the Act, therefore, the decision of the Ld. CIT(A) in that regard cannot be sustained because the assessee is not at all eligible for deduction u/s 80IA of the Act. Accordingly, the appeal of the assessee is also dismissed.
Finally, the appeal of the Revenue is allowed whereas the appeal of the assessee is dismissed.”
In view of the above, at the very outset we may point out that
as per mandate and the settled legal position the provisions of
Section 80IA of the Act does not apply to the business
referred to in sub section (4) of Section 80IA of the Act which
is of the nature of “works contract” and in sub-section (1), the
words “any business” has been mentioned. The Ld. AR could
not controvert the fact that the facts and circumstances of the
present case are identical to the facts of the case of M/s. R.K.
Gupta Contractors and Engineers Pvt. Ltd (supra) and thus
we hold that no deduction is allowable to the assessee u/s
80IA of the Act as the appellant is only executing the works
M/s Vinod Kumar Shukla Const. Pvt. Ltd, ITA No.546/Ind/2016 Assessment Year 2011-12 Page 7 of 8
contract awarded by the State/Central Governments and he
is only a “works contractor”. Consequently, following the
decision of Tribunal in the case of ACIT v/s R.K. Gupta
Contractors and Engineers Pvt. Ltd (supra) we hold that the
conclusion drawn at 4.4 of the order of the CIT(A) is correct
and sustainable, thus we have no reason to interfere with the
same. It is also relevant to mention that while dismissing the
claim of the assessee the CIT(A) rightly noted that no appeal
has been filed by the assessee for Assessment Year 2010-11
i.e. immediately preceding year, therefore the conclusion
drawn by the first appellate authority also gets strong support
from this fact.
In the result the appeal of the assessee being devoid of merits is dismissed.
Order was pronounced in the open court on 11.08.2017.
Sd/- Sd/-
(O.P. MEENA) (CHANDRA MOHAN GARG) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER Indore; �दनांक Dated : 11/08/2017
Dev/
M/s Vinod Kumar Shukla Const. Pvt. Ltd, ITA No.546/Ind/2016 Assessment Year 2011-12 Page 8 of 8
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order
Assistant Registrar, Indore