THE INDIAN HUME PIPE COMPANY LIMITED,MUMBAI vs. DCIT - CC-3(3), MUMBAI

This is an appeal filed by the assessee. The relevant assessment year 2011-12. The appeal is directed against the order of the Commissioner (Appeals) – 51, Mumbai and arises out of the order under section 143(3) of the Income Tax Act, 1961 (‘’the Act’’).

This sole ground raised by the assessee in this appeal is that the learned CIT(A) erred in confirming the disallowance of claim of deduction u/s 80IA of the Act relying on the decision of the ITAT, Mumbai for the A.Y. 2005-06 to 2007-08 for the reasons mentioned in the order. Further it is stated, that the learned CIT(A) erred in confirming the disallowance of claim of deduction u/s 80IA of the Act, treating the appellant as works contractor and not as developer for the reasons mentioned in the order.

In a nutshell, the facts are that the assessee is a manufacturer of hume pipes and is engaged in execution of civil projects. It claimed deduction u/s 80IA amounting to Rs. 35,85,38,000/- in respect of the business income earned from execution of project relevant to development of infrastructure facility, such as water supply and sewerage projects – both composite and part of composite projects. In response to a query raised by the Assessing Officer (AO), the assessee filed a written submission dated 28.01.2014 which has been extracted at page 2-8 of the assessment order. The AO was not convinced with the explanation given by the assessee and relying on the order of the ITAT Mumbai in the case of M/s. B.T. Patil & Sons, Renagaum Construction Pvt. Ltd. vs. ACIT, Circle-2, Kolhapur, ITAT Chennai in the case of ACIT vs. Indwell Inanings Ltd. (ITAT, Chennai) 313 ITR (AT) 118, disallowed the claim of deduction u/s 80IA amounting to Rs. 35,85,38,000/- made by the assessee.

The assessee preferred an appeal before the learned CIT(A). We find that the learned CIT(A) has mentioned that “ Assessee, however, fairly agreed that this issue was decided against it by CIT(A) in AYs 2008-09, 2009-10 & 2010-11 and it was confirmed by Hon'ble ITAT. Thus, it is stated that the issue is covered against the assessee by the decision of jurisdictional ITAT’’. The learned CIT(A) thus confirmed the disallowance made by the A.O. 5. Before us, the learned counsel of the assessee relied on the order of the ITAT, Mumbai in the case of the assessee for the A.Y. 2009-10 (ITA No. 16/Mum/2013) and A.Y. 2010-11 (ITA No. 3963/Mum/2013). 6. The learned DR fairly agrees with the facts mentioned in the order of the ITAT in the case of the assessee for the A.Y. 2009-10 and 2010-11. 7. We have heard the rival submissions and perused the relevant material on record. We find that the Co-ordinate Bench in the case of the assessee for the A.Y. 2009-10 has held as under: ‘’On a perusal of the order passed by Ld. CIT(A), we notice that the first appellate authority has followed the decision rendered by the Tribunal in the assessee’s own case with the understanding that the Tribunal has confirmed the disallowance of claim made u/s 80IA of the Act. A perusal of the order passed by the Tribunal for assessment year 2008-09 (referred supra) would show that the ITAT has upheld the disallowance made u/s 80IA only in respect of the projects undertaken in the earlier years. In respect of the projects undertaken during the years relevant to the assessment years 2007- 08 and 2008-09, the matter of claim for deduction u/s 80IA was restored back to the file of the Ld. CIT(A) for fresh examination. Consistent with the view taken by the Tribunal in the earlier years, we restore the matter relating to deduction u/s 80IA in respect of the projects undertaken during the years relevant to the assessment years 2007-08, 2008-09 and also the year under consideration to the file of the Ld. CIT(A) for making fresh examination in the light of observations made by the Tribunal in its order passed for assessment year 2007-08.’’ 7.1 We also find that in the case of the assessee for the A.Y. 2010- 11, on similar facts, the Co-ordinate Bench followed the order of the Tribunal in the case of the assessee for the A.Y. 2008-09 and restored back the matter to the file of the AO for fresh adjudication.

In view of the above, we follow the order of the Co-ordinate Bench as mentioned at para 7 and 7.1 here-in-above and set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO for fresh adjudication as per the provisions of the Act after giving a reasonable opportunity of being heard to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purpose.