DCIT Vs Gondwana Engineers Ltd. (ITAT Nagpur)
ITAT Nagpur allowed the Revenue’s appeals concerning AYs 2015-16 and 2016-17, holding that the assessee failed to establish eligibility for deduction under section 80-IA of the Income Tax Act. The Tribunal found insufficient documentary evidence to establish that the assessee acted as a developer of eligible infrastructure facilities rather than a contractor or sub-contractor. It also noted that Form No. 10CCB was obtained after filing the return, while the tax audit report certified NIL deduction under section 80-IA. Accordingly, the CIT(A)’s relief was set aside and the AO’s disallowance of the section 80-IA deduction was restored. On employees’ PF and ESI contributions, the Tribunal held that Rs. 4,97,352/- was deposited beyond the statutory due dates and therefore disallowable under section 36(1)(va) read with section 2(24)(x), relying on the Supreme Court decision in Checkmate Services (P.) Ltd. v. CIT. The CIT(A)’s deletion of this addition was also set aside and the AO’s disallowance restored. The Revenue’s appeals were consequently allowed.
ITAT Nagpur allowed the Revenue’s appeals and restored the AO’s disallowance of deduction under section 80-IA, holding that the assessee failed to discharge the statutory burden of proving that it had itself developed the eligible infrastructure facilities rather than merely acting as a contractor/sub-contractor, particularly in the absence of documentary evidence of deployment of its own financial resources, technical expertise, plant, machinery and manpower; the Tribunal also restored the disallowance of employees’ PF/ESI contribution under section 36(1)(va), following the binding judgment of the Supreme Court in Checkmate Services (P.) Ltd. v. CIT, notwithstanding payment before the due date of filing the return under section 139(1).
