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Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
impugned order dated 4.9.2013, passed by the Ld. CIT (Appeals)- XXIV, New Delhi for the quantum of assessment u/s 147/143(3) for the assessment year 2007-08. In the grounds of appeal the revenue has raised following grounds:-
“1. Directing the AO to accept the revised return even when the work was awarded to M/s Gopi Construction under the proprietorship of the assessee accepting the tender documents submitted by him in his proprietorship capacity and TDS on Sub- contracts given by the assessee was made in his proprietorship capacity as is evident from Form 27A. 2. Allowing the deduction u/s 80IA (4) in respect of work awarded to M/s. Gopi Construction Prop. Naresh Kumar Tomar
Ignoring Auditors report in Form 3CB, 3CD and 10CCB wherein the Auditor has certified the gross contract receipts, profits belonging to the assessee and deduction u/s 80IA derived on the profits earned by the assessee.”
At the outset, Ld. Counsel for the assessee, Shri Vivek Bansal submitted that here in this case the assessee had wrongly claimed deduction u/s 80IA (4) of Rs. 85,17,430/-, even though income of his proprietorship concern was shown by M/s. Arham Technologies Pvt. Ltd. which had earlier taken over the business of assessee’s proprietorship concern, M/s. Gopi Construction. This claim was later on withdrawn by way of revised return filed u/s 139(5). He pointed out that assessee was a proprietor of M/s. Gopi Construction engaged in the business of contractor and construction. Since assessee was not an enterprise within the definition of section 80IA (4), therefore assessee’s case was reopened u/s 147 to examine the claim of 80IA (4). In response to notice u/s 148, the assessee submitted that revised return filed u/s 139(5) may be treated as return filed in response to section 148. He pointed out that M/s. Gopi Construction was taken over by the company M/s. Arham Technologies Pvt. Ltd. w.e.f.
1.4.2005, wherein the entire income from Gopi Construction has been shown in the hands of the said company. Thus, the income of proprietorship concern shown by the assessee in his individual hands was not correct as the same income was already shown in the hands of the company. Once the assessee has realised this mistake it has duly revised his return of income u/s 139(5). He further brought to our notice that for the same assessment year, assessment has been framed u/s 147 r.w.s. 143(3) vide order dated 17.3.2014 in the case of M/s. Arham Technologies Pvt. Ltd., wherein this entire income has now been assessed on substantive basis by the AO and claim of 80IA(4) was disallowed. The copy of the said assessment order was placed before us. Thus, this income cannot be taxed in the hands of assessee and therefore, it has rightly been deleted by CIT (A).
3. On the other hand, Ld. DR strongly relied upon the order of the AO and Ld. CIT (A).
We have heard the rival parties and also perused the relevant finding given in the impugned order as well as the material referred to before us. The assessee had filed his return of income on 3.9.2007 declaring an income of Rs. 4,62,558/-, after claiming deduction u/s 80IA (4) of Rs. 85,17,430/-. The assessee was a proprietor of M/s.
Gopi Construction and was doing construction work. Later on, w.e.f.
1.4.2005 the said business of M/s. Gopi Construction was taken over by M/s. Arham Technologies Pvt. Ltd. The assessee’s case was that it was by mistake, income from M/s. Gopi Construction was shown in the hands of the assessee and deduction u/s 801A(4) was claimed. In fact the income of M/s. Gopi Construction could not have been assessed in the hands of the assessee as same was merged with the aforesaid company. AO did not accepted the submission of the assessee and added the entire claim of deduction u/s 80IA (4) as income of the assessee. Before the Ld. CIT (A) the assessee brought to the notice that M/s. Arhan Technologies had filed the returned income for the same assessment year, i.e., A.Y. 2007-08 in which the income of M/s. Gopi Construction was duly included and the claim of same deduction u/s 80IA(4) was subjected to scrutiny assessment. It has been further brought to our notice that income of M/s. Gopi Construction for A.Y. 2010-11 shown in the hands of the company has been accepted by the AO. Ld. CIT (A) after taking into consideration all these facts has deleted the addition in the hands of the assessee company and further observed that notice u/s 148 has been issued to M/s. Arhan Technologies for the A.Y. 2007-08 which though at that stage assessment was pending. But now that already assessment has been passed u/s 147 in the case of M/s. Arham Technologies where the income of M/s. Gopi Construction has been assessed in the hands of the company and claim has been disallowed on merits on substantive basis, therefore, the same income now cannot be taxed in the hands of the assessee.
It has been further brought to our notice by the Ld. Counsel that in the case of M/s. Arham Technologies Pvt. Ltd., the claim of deduction u/s 80IA in respect of income of M/s. Gopi Construction has been allowed by the Ld. CIT (A) and also affirmed by the Tribunal vide order dated 22.1.2018 passed in ITA No. 2384/Del/2016. Thus, in view of the aforesaid facts, we hold that the addition of Rs. 87,91,020/- cannot be sustained in the hands of the assessee and has been rightly deleted by the Ld. CIT(A).
In the result appeal of the revenue is dismissed.