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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश / ORDER
PER D. KARUNAKARA RAO, AM :
This is the appeal filed by Revenue against the order of CIT (Appeal)-1, Nashik dated 17.02.2016 for the assessment year 2010-11.
The issue raised in the present appeal relates to allowability of deduction u/s.80IA(4) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) which was not originally claimed in the return of income filed u/s. 139(1) of the Act.
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Briefly stated relevant facts include, the assessee is a company engaged
in the business of manufacturing of Pozzocrete from Fly-Ash. Assessee filed
the return of income on 30.09.2010 declaring total income at
Rs.5,26,13,543/-. During scrutiny assessment proceedings u/s.143(3) of the
Act, the Assessing Officer assessed total income of assessee at
Rs.6,57,30,020/-. The Assessing Officer denied the claim of assessee
u/s.80IA(4) of the Act by observing that the assessee is not an infrastructure
facility but only a manufacturer of a specialized product Pozzocrete for which
fly ash. The Assessing Officer also relied on the decision of Hon'ble Supreme
Court of India in the case of Goetze (India) Ltd. vs. CIT, reported as 284 ITR
323 (SC) and rejected the assessee’s claim of deduction u/s.80IA(4) of the Act.
Aggrieved by the assessment order, assessee filed appeal before the
CIT(A). During First Appellate proceedings, assessee raised the said issue of
allowability of deduction u/s.80IA(4) of the Act as the assessee is engaged in
the infrastructural activities. The CIT(A), Nashik examined the issue and
considered the assessee to be eligible for claiming deduction u/s.80IA(4) of
the Act and allowed the appeal of the assessee as per discussion given in Para
4.8 of the CIT(A)’s order.
Aggrieved by the order of CIT(A), the Revenue is in appeal before the
Tribunal by raising four grounds. The ground Nos. 2, 3 and 4 are general in
nature and consequential and hence, require no adjudication. Accordingly,
ground Nos. 2, 3 and 4 are dismissed. Now, the ground which left for
adjudication is ground No. 1 and the same reads as under:
“1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-1, Nashik was justified in allowing the claim of Section 80IA(4) of the Income Tax Act, 1961 irrespective of the fact that assessee has not claimed deduction u/s.80IA(4) in the return of income under the
3 ITA No. 869/PUN/2016 A.Y.2010-11
provisions of section 139(1) of the I.T. Act and has also not revised the computation of total income.”
From the above, it is evident that the solitary objection of the Revenue
relates to allowability of claim of deduction u/s.80IA(4) of the Act when the
assessee failed to claim the same in the original return of income filed
u/s.139 of the Act. The assessee has made claim in the revised return after
computation of total income. The CIT(A) examined this issue and relied on the
decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. M/s.
Pruthvi brokers and Shareholders Pvt. Ltd., reported as 349 ITR 336 and
allowed the appeal of the assessee as per discussion given in para 4.8 of the
order of CIT(A).
The Ld. DR for the Revenue relied heavily on the order of Assessing
Officer and argument/conclusion made by the Assessing Officer in the
assessment order.
On the other hand, Ld. AR for the assessee submitted that CIT(A) is an
Appellate Authority and is justified in following the ratio laid down by the
Hon'ble Jurisdictional High Court in the case of CIT Vs. Pruthvi brokers and
Shareholders Pvt. Ltd.(supra.). He further submitted that CIT(A) has rightly
adjudicated this issue relating to allowability of deduction u/s.80IA(4) of the
Act. The Ld. AR for the assessee also mentioned that Revenue has no
objection in treating the manufacturing activities of the assessee as
infrastructural activities as defined u/s.80IA(4) of the Act. Bringing our
attention to Para 4.8 of the order of CIT(A), Ld. AR for the assessee prayed for
confirming the order of CIT(A) without any amendment.
We have heard both the parties on the solitary issue and the question
that arises before us relates to whether the CIT(A) is justified in entertaining
4 ITA No. 869/PUN/2016 A.Y.2010-11
fresh claim of the assessee relating to allowability of claim of deduction
u/s.80IA(4) of the Act. In this regard, in the light of the judgment of Hon'ble
Jurisdictional High Court in the case of CIT Vs. M/s. Pruthvi brokers and
Shareholders Pvt. Ltd.(supra.), we are of the considered opinion that CIT(A),
being Appellate Authority, is right in assuming jurisdiction in entertaining the
claim of the assessee and allowing the claim of deduction u/s.80IA(4) of the
Act. We peruse the contents of Para 4.8 of the said appellate order. For the
sake of completeness, the same are extracted as under:
“4.8 Further, the claim of section 80IA though through a letter amidst AO is admissible before me in view of jurisdictional High Court decision in the case Pruthvi brokers and Shareholders Pvt. Ltd.(349 ITR 336) wherein it is held interalia as under : “It is well settled that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. Goetze was confined to a case where the claim was made only before the AO and not before the appellate authorities. The jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgment. On facts, there was nothing to show that the claim entertained by the CIT(A) /ITAT was improper.” (Jai Parabolic 306 ITR 42 (Del.) referred) In the instant case the assessee has made claim of section 80IA and filed all details with AO. The AO has examined the same and then denied it stating that the fly ash is one of the ingredients in manufacture of Pozzocrete. This view of AO is not correct. On examination of composition of Pozzocrete it is observed that fly ash is the major component. Pozzocrete is processed fly ash for eco friendly, more durable and performance improved concrete. It is obtained by processing fly ash product as a by-product at coal-fired electricity generating power stations. The word solid waste management is not defined in income tax. As per Glossary of environment statistics Solid waste management refers to the supervised handling of waste material from generation at the source through the recovery processes to disposal. In the instant case the assessee procures the fly ash from MSEB. The fly ash so procured is processed and Pozzocrete. Pozzocrete has a successful history 'Of use in concrete around the world as Pozzolanic material Therefore assessee is handling the waste material generated from coal fired electricity generating power stations to its final disposal. This makes the assessee qualify as solid waste management company. In view of the aforesaid discussion and facts of the case the assessee being solid waste management company as envisaged under section 80IA(4) explanation c, in my opinion, as it qualifies the condition mentioned under section 80IA(4), it is entitled for deduction under section 80IA of the Act. The AO is directed to allow the claim of section 80IA after proper verification.”
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Considering the above facts and the settled position of law, we are of the opinion that the order of CIT(A) is fair and reasonable and it does not call for any interference. As such, there is no merit in the objection of Revenue in the ground for treating the manufacturing activities of Pozzocrete from Fly- Ash as infrastructural activities within the scope of the provisions of section 80IA(4) of the Act. Accordingly, ground No.1 raised in appeal by the Revenue is dismissed.
In the result, appeal of the Revenue is dismissed. 9.
Order pronounced on 24th day of October, 2018.
Sd/- Sd/- (�वकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER
पुणे / Pune; �दनांक / Dated : 24th October, 2018. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT (Appeal)-1, Nashik. 4. The Pr. CIT-1, Nashik. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.