ACIT Vs Rohan & Rajdeep Infrastructure (ITAT Pune)
Introduction: The legal tussle between ACIT and Rohan & Rajdeep Infrastructure, revolving around the denial of deduction u/s 80IA(4) for specific projects, reached its climax at ITAT Pune. This article delves into the intricacies of the case, examining the original assessment, the reopening of the case, and the detailed analysis leading to ITAT’s resolution.
Detailed Analysis: During the original assessment, the AO allowed deduction u/s 80IA(4) for the Terna Bridge project but denied it for two other projects, deeming them non-new infrastructural facilities. Notably, the AO, aware of the firm’s status, did not object to the deduction on the grounds of the firm’s eligibility during the original assessment. However, in a subsequent reassessment, the AO contested the deduction based on the firm’s status, arguing that only companies or consortia of companies are eligible under section 80IA(4)(i)(a).
The CIT(A), in alignment with ITAT Pune’s earlier decision (ITA No.633/PUN/2017), upheld the firm’s eligibility for the deduction, considering it akin to a consortium and hence eligible under section 80IA(4). The Tribunal emphasized that the Revenue had allowed the deduction for prior years and presented no new facts to justify the denial in the current assessment.
Additionally, a dispute arose regarding the amortization of the opening WDV over the remaining concession period for toll collection rights, treated as an intangible asset. The AO, following CBDT Circular No.9/2014, disallowed the claim for depreciation. However, the CIT(A) and ITAT Pune, referring to precedent and the CBDT circular, ruled in favor of the assessee, allowing depreciation on intangible assets.
Conclusion: The ITAT Pune dismissed the Revenue’s appeal, affirming the firm’s eligibility for deduction u/s 80IA(4). The tribunal, relying on its previous decisions and established legal principles, concluded that the reopening of the case lacked merit, as it was based on a mere change of opinion. The article highlights the consistent legal stand and precedent support for the assessee’s eligibility for deductions. Furthermore, it emphasizes the acceptance of depreciation claims on intangible assets, providing a comprehensive overview of the case resolution.
FULL TEXT OF THE ORDER OF ITAT PUNE
The set of Three Appeals consisting two appeals by the Revenue and Cross Objection therein by the Assessee for A.Y. 2010-11 and remaining appeal by the Revenue for A.Y. 2014-15 are directed against the separate orders of ld.Commissioner of Income Tax(Appeals), Pune-3, Pune dated 10.09.2018 and 11.09.2018 for the Assessment Years 2010-11 and 2014-15 respectively. The Revenue raised the following grounds of appeal for the A.Y. 2010-11:
“1. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in allowing the assessee’s claim of deduction u/s.80IA(4) of the I.T.Act, as the section 80IA does not provide deduction to assessees registered as “Firm” and instead should have confirmed the disallowance made in the assessment on this issue.
2. The appellant prays that the Order of the Ld.CIT(A) be held to be bad in law and quashed and that of the Assessing Officer be restored.
The appellant prays to be allowed to add, amend, modify, rectify, delete or raise any grounds of appeal during the course of appellate proceedings.
2. In Cross Objection appeal, the Assessee raised the following grounds of appeal for the Assessment Year 2010-11:
“1. The Assessee submits that the re-opening u/s 148 is bad in law and accordingly, the reasst. Order passed u/s 147 be declared null and void.
2. The assessee submits that the reopening is bad in law on account of the following reasons –
a. The asst. u/s. 143(3) was completed and the reopening is beyond 4 years from the end of the relevant asst. Year and since all the material facts were duly submitted by the assessee in the course of original asst. Proceedings, the reopening is not valid since there is no failure on the part of the assessee to furnish the material facts.
b. The reopening is made on a mere change of opinion and hence, the same was not justified at all.
3. The respondent craves leave to add, alter, amend or delete any of the above cross objections.”
3. The Revenue raised the following grounds of appeal for the Assessment Year 2014-15:
“1. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in allowing the assessee’s claim of deduction u/s.80IA(4) of the I.T.Act, as the section 80IA does not provide deduction to assessees registered as “Firm” and instead should have confirmed the disallowance made in the assessment on this issue.
2. The appellant prays that the Order of the Ld.CIT(A) be held to be bad in law and quashed and that of the Assessing Officer be restored.
The appellant prays to be allowed to add, amend, modify, rectify, delete or raise any grounds of appeal during the course of appellate proceedings.
4. Brief facts of the case are that the assessee is a Partnership firm having following partners:
