Since the time limit for filing the revised return had not expired during the relevant year, therefore, claim for deduction under section 80-IA if not made earlier could have been made in the revised return. Once it could have been claimed in the revised return under section 139(1), the same could have also been claimed under section 153A. Contention of revenue that return under section 153A was a original return and not a revised return was misplaced because deduction under section 80-IA, if otherwise admissible, could be claimed in both ways.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
1. Heard Sri Manish Misra, learned counsel for appellant and Sri Desh Deepak Chopra, learned counsel for respondent assesses.
2. This is an appeal under Section 260A of Income Tax Act, 1961 (hereinafter referred to as ” Act 1961″) arising from judgment and order dated 30.10.2015 passed in ITA No. 38//LKW/2015 relating to assessment year 2009-10.
3. It was admitted on the following substantial questions of law:-
“ (i) Whether the Income Tax appellate Tribunal was justified in allowing the deduction u/s 80IA to the assessee on the basis of return filed after the issue of notice u/s 153A of the Act.
” (ii) Whether the Income Tax Appellate Tribunal was justified under the facts and circumstances of the case in confirming the order of CIT (A) who has travelled beyond the statutory provision of Chapter VIA, u/s 80 A (5) of the Income Tax Act, 1961 which clearly provides that if assessee fails to make a claim in his return of income of any deduction; no deduction shall be allowed to him thereunder”.
4. Tribunal has justified deduction under Section 80IA on the basis of return filed under Section 153A by observing that for the assessment year 2009-10 and onwards, the time for filing revised return has not expired and, therefore, claim for deduction under Section 80IA if not made earlier could have been made in the revised return. Once it could have been claimed in revised return under Section 139 (1), the same could have also been claimed under Section 153 (A).
5. Sri Manish Misra, learned counsel for appellant contended that return under Section 153 (A) is not a revised return but it is a original return. If that be so, then in our view, deduction under Section 80IA, if otherwise admissible, always could have been claimed and we are not shown any authority otherwise to take a different view. Therefore, in both way, deduction under Section 80IA , if otherwise admissible, could have been claimed by Assesses. Hence, we answer both the aforesaid questions in favour of Assesses and against Revenue affirming the view taken by Tribunal.
6. It is next contended that there is another substantial question of law that Assesses is not ”Developer’ but ”Contractor’ and in this regard detailed finding has been recorded otherwise by A.O but Commissioner of Income Tax (Appeals) (hereinafter referred to as ” CIT (A)”) has recorded finding otherwise and that has been confirmed by Tribunal without further dismissing. However, he submitted that while admitting appeal, no substantial question of law on this aspect has been framed.
7. For our satisfaction we have also gone into this aspect and find that CIT(A) has discussed this issue in great length and findings of CIT (A) commenced from page-72 of paper book. The ultimate conclusion on page-78 and 79, reads as under:-
” This circular has been issued after the Finance Act, 2009 and has clarified that the widening of an existing road in an infrastructure facility by an enterprise entitles the enterprise for deduction u/s 80IA (4)(i).
It is a settled position in Law that the CBDT circulars are binding on the Assessing Officer reference is invited to the case of [Azadi Bacchao Andolan (Supreme Court)] as CBDT circulars are contemparanea expositio.
This deduction U/S 80IA (4)(i) is available to any company which has entered into an agreement with the government or other government bodies/corporation, the appellant company falls under this.
After considering the CBDT Circular 4/2010 case laws of Koya and Company and Rohan and Rajdeep Infrastructure and as well as the facts at pages 40 to 42 of this order. The appellant company has widened the road from 2 lane to 4 lane in case of agreement with NHAI and that the same time constructed bridges, culverts, drainage, junctions, footpaths, traffic, signals etc which shows that assessee company is a developer and not a mere contractor.
Similarly, agreement with UP PWD assessee had increased the road length and widened it, the works consisted of the up gradation of the existing road, including the provision of an asphaltic overlay, GSB and WMM with DBM and BC and the widening of carriageway as shoulders (hard and soft). The work also includes the widening of existing culverts and minor bridges alongwith the new construction of culverts and bridges.
Thus from the above it is quite clear that the appellant company is not a mere work contractor but has developed the road from existing 2 lane to 4 lane and while doing so the appellant company has also made substantial investment by himself and also executed the development works and carried out civil-works on his own by using his own material and expertise. No material consumed in the construction of roads and bridges was provided by the NHAI and UP PWD. This fact is duly referred to in the copies of agreement as well as in the payment advices, where in no amount was deducted by the agencies on account of material. The maintenance of the existing facility during the period of development also was of the appellant company and so also was the risk during the period to maintain the infrastructure and after the completion of development of road and its handing over to the Government, the risk period of the appellant company was of 12 months for maintenance of the road. Further the appellant company has not subcontracted his work. In the case Statutory Report in form 10CCB under Rule 18 BBB as prescribed by the CBDT was also filed along with the return. Wherein the Auditors have duly certified that the assessee was a developer of road and has maintained separate books of accounts wherein all details have been recorded and nothing adverse was noted by the Assessing Officer relating to this.
Therefore, after considering all the facts the appellant company fulfills all the criteria of a developers as per Section 80IA (4)(i) and by his works a new infrastructure facility in the nature of road has come into existence and is eligible for tax benefit under Section 80IA (4)(i) of the Act.
After considering the above stated facts, the assesse is entitled for the deduction u/s 80IA (4), therefore, the addition of Rs. 10,34,06,532/- is hereby deleted and this ground of appeal is allowed.
8. The Tribunal has also looked into this question in para-14 which commenced from page 14.2 and its findings read as under:-
” From the above para of this tribunal order, it comes out that if the contracts involves design, development, operating and maintenance, financial involvement and defect correction and liability period, then such contracts cannot be called as simple works contract to deny the deduction under Section 80IA and profit from the contracts which involves design, development, operating and maintenance, financial involvement, and defect correction and liability period is to be accepted as development and cannot be said to be contract simplictor to apply the explanation. In the present case, categorical finding has been given by CIT (A) that the assessee was engaged in development of road and is not a mere contractor as he had deployed his own capital, used his own management and expertise in maintenance and had to bear the risk and defect correction. These findings of CIT (A) could not be converted by learned DR of the revenue and therefore, this tribunal order rendered in the case of Koya & Co. (Supra) is squarely applicable because the facts are similar. In the order of CIT (A), he has followed this tribunal order and various other judicial pronouncements as noted by him in his order, as reproduced above. Considering this factual and legal position, we find no infirmity that the order of CIT (A) on this aspect that in the fact of the present case, it cannot be said that the assessee company was mere a contractor and not a developer. Therefore, on issue No.3, we find no infirmity in the order of CIT (A). This issue is decided in favour of the assessee.
9. Thus, Tribunal has confirmed findings of fact recorded by CIT (A) holding that Assesses is a ”Developer’ and not a ”Contractor’ and the otherwise findings recorded by A.O have been reversed by CIT (A). Since it is a finding of fact concurrently recorded by CIT (A) and Tribunal, which has not been shown perverse on contrary to record. We,therefore, do not find any infirmity therein and in our view, this issue can not be treated to give rise a substantial question of law.
11. In the result, appeal is dismissed.