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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI N.K. BILLAIYA & SHRI PAWAN SINGH
आयकर अपील�य अ�धकरण, मुंबई �यायपीठ , मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER आयकर अपील सं/ 7250 & 7251/Mum/2012 (�नधा�रण वष� / Assessment Years: 2003-04 to 2005-06 आयकर अपील सं/ I.TA No.4456/Mum/2010 (�नधा�रण वष� / Assessment Year:2006-07 आयकर अपील सं/ I.TA No.5046/Mum/2011 (�नधा�रण वष� / Assessment Year:2007-08 आयकर अपील सं/ I.TA No.1697/Mum/2012 (�नधा�रण वष� / Assessment Year:2008-09 आयकर अपील सं/ I.TA No.7780/Mum/2012 (�नधा�रण वष� / Assessment Year:2009-10 बनाम/ M/s. Gleg Engineers Pvt. The ITO 9(1)(4), Ltd., Aayakar Bhavan, Vs. 302-303, Dheeraj Plaza, Mumbai Hill Road, Bandra (W), Mumbai-400 050 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAACG 8338G (अपीलाथ� /Appellant) (��यथ� / Respondent) .. अपीलाथ� ओर से/ Appellant by: Shri M. Subramanian ��यथ� क� ओर से/Respondent by: Shri Abani Kanta Nayak सुनवाई क� तार�ख / Date of Hearing :23.11.2015 घोषणा क� तार�ख /Date of Pronouncement :23.11.2015 आदेश / O R D E R PER BENCH:
2 M/s. Gleg Engineers Pvt. Ltd.
These are appeals by the assessee against separate orders of the Ld. CIT(A) Mumbai pertaining to Assessment years 2003-04 to 2009-10. All these appeals by the assessee have common grievance, therefore, they were heard together and disposed of by this common order for the sake of convenience and brevity.
The common ground in respect of all these appeals relates to the claim of deduction u/s. 80IA of the Act which has been denied by the AO and the denial has been confirmed by the Ld. CIT(A). Other grievance relates to the treatment of interest on fixed deposit as income from other sources as against the claim of the same as business income of the assessee and other grievance relates to the disallowance of expenses.
The representatives of both sides agreed that facts in issues are identical for all the assessment years under appeal, therefore, we are proceeding with the facts of assessment year 2003-04.
The assessee is a Consulting Engineers and contractors and has shown income from business at Rs. 21,48,459/- and simultaneously claimed deduction u/s. 80IA. The claim was denied by the AO. The matter travelled upto the Tribunal and the Tribunal vide its order dated 28.4.2009 in restored the matter to the file of the AO with a direction to the AO to examine whether assessee is fulfilling the eligible conditions for the claim of deduction u/s. 80IA(4) of the Act.
3 M/s. Gleg Engineers Pvt. Ltd.
4.1. Pursuant to the directions, the AO issued notice to the assessee asking the assessee to once again justify its claim for deduction u/s. 80IA(4) of the Act.
4.2. The assessee filed a detailed reply in support of its claim. After considering the facts and the submissions, the AO observed that the assessee has reiterated the facts which have been already considered in the earlier assessment proceedings and has not brought any additional facts on record. The AO once again denied the claim of the assessee drawing support from the amendment brought to the provisions of Sec. 80IA by Finance No.2 Act of 2009 which debars the claim of deduction in relation to a business which is in the nature of a works contract.
The assessee carried the matter before the Ld. CIT(A) but without any success.
Before us, the Ld. Counsel for the assessee brought to our notice various decisions of the Hon’ble High Courts/Tribunals delivered subsequent to the decisions of the First Appellate Authority. It is the say of the Ld. Counsel that in the plethora of decisions even a works contract is accepted and is eligible for the deduction u/s. 80IA(4) of the Act.
Per contra, the Ld. Departmental Representative strongly relied upon the amendment brought to the provisions of Sec. u/s. 80IA(4) of the Act.
We have given a thoughtful consideration to the orders of the authorities below. We have also considered the earlier decision of 4 M/s. Gleg Engineers Pvt. Ltd.
the Tribunal (supra). Undisputedly, the claim has been denied as the assessee has executed works contract. At this stage, we must admit that much water has been flown under the bridge since the decision of the First Appellate authority. The Hon’ble Jurisdictional High Court of Bombay in the case of ABG Heavy Industries Ltd 322 ITR 323 has held that the claim of deduction cannot be denied in the case of works contract. This decision of the Hon’ble Jurisdictional High Court has made the decision in the case of BT Patel & Sons 36 SOT 171 no more a good law. It would not be out of place to mention that the decision in the case of BT Patel & Sons have been reversed by the Hon’ble High Court of Bombay in favour of the assessee and against the Revenue.
The Revenue authorities have heavily relied upon the amendments brought to the provisions of Sec. 80IA(4) of the Act. This amendment has been taken care of by the Hon’ble High Court of Gujarat in the case of Katira Construction Ltd. 352 ITR 513. Considering these decisions on the facts of the case in all fairness, we restore the matter once again to the file of the AO with a direction to decide the issue afresh in the light of the decision of the Hon’ble Jurisdictional High Court in the case of ABG Heavy Industries Ltd (supra) and the decision of the Co-ordinate Bench in the case of NCC- SMC (JV) in 514/M/09, 7885/M/10 and 283/M/2011 after giving reasonable and fair opportunity of being heard to the assessee.
In so far as the issue relating to the treatment of income received from fixed deposit and its eligibility for the claim of deduction, the AO is directed to decide the same in the light of the 5 M/s. Gleg Engineers Pvt. Ltd.
decision of the Hon’ble Supreme Court in the case of Liberty India Vs. CIT 317 ITR 218. 11. In so far as disallowance of claim of expenditure is concerned, the AO is directed to decide the issue afresh after giving reasonable and sufficient opportunity of being heard to the assessee. 12. In the result, the appeals filed by the assessee are treated as allowed for statistical purpose. Order pronounced in the open court at the time of hearing on 23rd November, 2015.