PCIT-3 Vs Gujarat State Road Developement Corporation Limited (Gujarat High Court)
Summary: The Gujarat High Court considered the Revenue’s Appeal under Section 260A of the Income Tax Act, 1961 against the order dated 31st October, 2023 passed by the Income Tax Appellate Tribunal, Ahmedabad ‘B’ Bench in ITA No.2798/Ahd/2014 and C.O.No.319/Ahd/2014 for Assessment Year 2011-12. The substantial question proposed by the Revenue concerned deletion of an addition of Rs.6,48,02,554/- representing expenses relating to projects for which, according to the Revenue, no income had been offered.
The assessee-company was engaged in building infrastructure projects, namely roads, and received grants from the Government for carrying out infrastructure road projects. For AY 2011-12, the assessee filed its return declaring total income of Rs.2,54,79,210/-. The assessment under Section 143(3), passed on 21st January, 2014, determined total income at Rs.78,41,21,174/- after making, among other additions, an addition of Rs.56,22,59,000/- on account of unutilised grant, Rs.1,08,22,957/- on account of unrecorded receipt, Rs.6,48,02,554/- towards project expenses for which no income was offered, and Rs.12,07,57,449/- towards interest on deposits with GSFS.
The CIT(A), by order dated 14th July, 2014, allowed the assessee’s appeal and deleted the additions. The Revenue appealed to the Tribunal, while the assessee filed a Cross-Objection. The Tribunal followed its earlier decision for AY 2010-11 and upheld deletion of the addition relating to unspent grant and the addition relating to unrecorded receipts. In respect of the Rs.6,48,02,554/- disallowance, the Tribunal followed its decision in ITA No.136/Ahd/2014 for AY 2010-11, where an identical disallowance had been considered.
