KMC Constructions Ltd.,, Hyderabad v. Addl.CIT, Range-2,, Hyderabad

ITA 1248/HYD/2012 | 2009-2010
Pronouncement Date: 28-10-2013 | Result: Allowed

Appeal Details

RSA Number 124822514 RSA 2012
Assessee PAN AABCK6483B
Bench Hyderabad
Appeal Number ITA 1248/HYD/2012
Duration Of Justice 1 year(s) 2 month(s) 11 day(s)
Appellant KMC Constructions Ltd.,, Hyderabad
Respondent Addl.CIT, Range-2,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-10-2013
Assessment Year 2009-2010
Appeal Filed On 17-08-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER ITA NO.1247/HYD/2012 : ASSTT. YEAR 2008 - 09 ITA NIO.1248/HYD/2012 : ASSTT. YEAR 2009 - 10 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD ( PAN - AABCK 6483 B ) V/S. ADDL. COMMISSIONER OF INCOME - TAX RANGE - 2 HYDERABAD (APPELLANT) (RESPONDENT) AND ITA NO.1382/HYD/2012 : ASSTT. YEAR 2008 - 09 ITA NIO.1383/HYD/2012 : ASSTT. YEAR 2009 - 10 DY. COMMISSIONER OF INCOME - TAX CIRCLE 2(1) HYDERABAD V/S. M/S. KMC CONSTRUCTIONS LTD. HYDERABAD ( PAN - AABCK 6483 B ) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.RAMA RAO DEPARTMENT BY : S/SHRI D.SUDHAKARA RAO & SHAKIR HUSSAIN SHAIK DATE OF HEARING 13.08.2013 DATE OF PRONOUNCEMENT 28.10.2013 O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS FOR TWO YEARS. THEY ARE DIRECTED AGAINST SEPARATE ORDERS OF THE CIT(A) III HYDERABAD BOTH DATED 11 TH JUNE 2012 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. SINCE COMMON ISSUES ARE INVOLVED THESE APPEALS ARE BEING DISPOSED OFF WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 2 ASSESSEES APPEALS: ITA NO.1247/HYD/2012 : ASSESSMENT YEAR 2008 - 09 ITA NO.1248/HYD/2012 : ASSESSMENT YEAR 2009 - 10 2. EFFECTIVE GROUNDS OF THE ASSESSEE COMMON IN BOTH THESE APPEALS READ AS FOLLOWS - 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) IS ERRONEOUS TO THE E X TENT IT I S P R EJ U DICIAL TO THE APPELLANT HEREIN. 2. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN CON F IRMIN G THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING THE INCOME FROM DEVELOPM E N T WORKS UN D ER T AKEN BY THE APPELLANT AT 12.5% ON GROSS RECEIPTS WITHOUT EXCLU D IN G THE RE C O VE RIES MADE BY TH E CON T RACTEE. 3. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN CON F IRMIN G THE ACTION OF THE ASSESSING OFFICER IN ESTIM A TING THE INCOME AT 7.5% OF THE GROSS RECEIPTS IN R E SPECT O F TH E WORK S ENTRUSTED FOR THE SUB - CONTRACTORS. 4. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN CONFIRMING THE ADDITION OF R S . 2 37 69 481/ - REPR E SENTING THE INT E REST RECEIVED W ITHOU T CONSIDERING THE FACT THAT SUCH INTEREST WAS RECEIVED IN CONNECTION WITH PROVISION O F BANK GUARANTEE AND THE INT EREST RE CE IVED IS ASSESSABLE UNDER THE H E AD INCOME FROM BUSINESS. THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT SUCH INTER E ST FORM PART OF INCOME FROM BUSINESS AND SHALL NO T B E SEPARATELY ADDED WHEN THE NET INCOME FROM BUSINESS IS ESTIMATED. 3. FACTS OF THE CASE IN BRIEF FOR THE ASSESSMENT YEAR 2008 - 09 ARE THAT THE ASSESSEE A COMPANY ENG AGED IN THE BUSINESS OF CIVIL CONTRACTS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 ON 30.9.2008 DECLARING TOTAL INCOME OF RS.28 64 41 144. AS AGAINST THIS ASSESSMENT WAS COMPLETED ON 16.12.2010 UNDER S.143(3) OF THE ACT BY MAKING INTE R ALIA ADDITIONS TO NET PROFIT FROM THE CONTRACT BUSINESS OF RS.59 65 11 801 AND UNDER THE HEAD OTHER SOURCES OF ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 3 RS.2 37 69 481 ON ACCOUNT OF INTE RE ST ON FDRS AND OTHER INTEREST. ON APPEAL THE CIT(A) UPHELD THE ESTIMATION MADE BY THE ASSESSING OFFICER ADOPTING A RATE OF 12.5% IN RESPECT OF GROSS RECEIPTS FROM CONTRACT EXECUTED BY THE ASSESSEE AND A RATE OF 7.5% IN RESPECT AT GROSS RECEIPTS FROM SUB - CONTRACTS. HE ALSO UPHELD THE ACTION OF THE ASSESSING OFFICER IN TREATING THE INTEREST ON FDRS AN D OTHER INTEREST OF RS.2 37 69 481 REPRESENTING INCOME FROM OTHER SOURCES AS AGAINST THE PLEA OF THE ASSESSEE TO TREAT THE SAME AS INCOME FROM BUSINESS. 4. BUT FOR THE AMOUNTS INVOLVED FACTS OF THE CASE FOR THE ASSESSMENT YEAR 2009 - 10 ARE IDENTICAL AND HENCE THE SAME ARE NOT REPEATED FOR THE SAKE OF BREVITY. 5. AGGRIEVED BY THE IMPUGNED ORDERS OF THE CIT(A) SUSTAINING THE ADDITIONS ON THE ASPECTS DISCUSSED ABOVE ASSESSEE PREFERRED THE PRESENT APPEALS BEFORE US. 6. FIRST GRIEVANCE OF THE ASSE SSEE IN ITS APPEAL RELATES TO ESTIMATION OF PROFIT BY THE ASSESSING OFFICER FROM THE CONTRACT RECEIPTS OF THE ASSESSEE. THE LEARNED COUN S EL FOR THE ASSESSEE REITERATING THE CONTENTIONS U R GED BEFORE THE LOWER AUTHO R ITI E S SUBMI T TED THAT THE ASSESSEE HAS NO OBJECTION WITH RE G ARD TO THE R A TE APPLIED BY THE ASSESSING OFFICER BUT ALL ITS GRIEVANCE IS AGAINST THE ACTION OF THE ASSESSING OFFICER IN MAKING SUCH ESTIMATION EVEN WITH REGARD TO THE RECOVERIES MA DE THE CONTRACT EE S VIZ. GOVERNMENT DEPARTMENTS . ACCO RDING TO HIM NET PROFIT RATE IS TO BE APPLIED ON THE NET RECEIPTS ALONE VIZ. GROSS RECEIPTS AS REDUCED BY THE DEPARTMENTAL RECOVERIES MADE BY THE GO V ERNMENT. TAKING US THROUGH ANNUAL REPORT OF THE ASSESSEE COMPANY FI L E D IN TH E PAPER BOOK IT IS SUBMITTE D THAT THE AMOUNTS IN QUESTION W E RE RE C OVERED BY THE GOVERNM E NT AND ARE PAID TO THE RESPECTIVE AUTHO R ITI E S. SIN C E THE AMOUNT WAS PAID ON BEHALF OF ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 4 TH E ASSESSEE SUCH RE C O V ERY IS IN CL U DED IN THE OPERATING INCOME AND IS CL A IM E D AS AN EXPENDITURE BY DEBITING TO THE PROFIT & LOSS ACCOUNT. HOWEVER THERE IS NO PROFIT ELEMENT IN RESPECT OF THE SAID RECO V ERIES MADE. THE LEARNED COUNSEL ALSO PLACED RELIANCE ON THE DECISION OF THE APEX COURT IN THE CASE OF BRIJ BHUSHANLAL PARDHUMAN V/S. CIT (115 ITR 524) IN THIS BEHALF AND SUBMITTED THAT THE DEPARTMENTAL RECOVERIES SHOULD B E REDUCED FROM THE GROSS CONTRACT RECEIPTS AND IT IS ONLY ON THE NET RECEIPTS THAT THE RATE OF PROFIT ADOPTED SHOULD BE APPLIED. 7. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTH E R HAND STRONGLY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES AND SUBMITTED THAT THERE IS NO MERIT IN THE CONTENTIONS OF THE ASSESSEE ON THIS ISSUE. 8. W E HAVE CON S I D ERED THE RIVAL SUBMISSIONS AND PERUSED THE O R DERS OF THE REVENUE AUTHORITIES. ADMITTEDLY T H E RE I S NO DISPUTE WITH REGARD TO THE REASONABLENESS OF THE RATE ADOPTED BY THE ASSESSING OFFICER FOR ESTIMATING THE INCOME OF THE ASSESSEE FROM THE CONTRACTS AND ALL THE GRIEVANCE OF THE ASSESSEE IS ONLY WITH REGARD TO THE METHOD ADOPTED BY THE ASSESSING OFFICER FOR ARRIVING AT THE GROSS RECEIPTS VIZ. WITHOUT DEDUCTING THE DEPARTMENTAL RECOVERIES THEREFROM. WE ARE IN AGREEMENT WITH THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE DEPARTMENTAL RECOVERIES WHICH HAVE NOT ACTUALLY BEEN RECEIVED BY THE ASSESSE E CANNOT BE TREATED AS YIELDING IN ANY INCOME TO THE ASSESSEE. IT IS ONLY IN THE YEAR IN WHICH ASSESSEE RECEIVES SUCH RECOVERIES MADE BY THE GOVERNMENT THAT SUCH INCOME SHOULD BE ESTIMATED AND BROUGHT TO TAX. IT IS ALSO THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAS BEEN FOLLOWING CONSISTENT METHOD OF ACCOUNTING FOR THE INCOME IN RESPECT OF THE DEPARTMENTAL REVERIES ONLY IN THE YEAR IN WHICH SUCH RECOVERIES HAVE BEEN RELEASED IN FAVOUR OF THE ASSESSEE BY THE GOVERNMENT. HOWEVER THIS ASPECT OF THE ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 5 MATT ER NEEDS TO BE EXAMINED. WE ACCORDINGLY SET ASIDE THE IMPUGN E D ORD ER S OF THE CIT(A) ON THIS ASPECT AND R E STORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE HAS BEEN DISCLOSIN G THE RECOVERIES EFFECTED IN THE YEAR UNDER APPEAL IN ANY SUBSEQUENT ASSESSMENT YEAR AND DECIDE THE YEAR IN WHICH INCOME RESULTED BY SUCH RECOVERIES IS ASSESSABLE. HE SHALL ACCORDINGLY REDECIDE THIS ISSUE IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABL E OPPORTUNITY TO THE ASSESSEE. 9. THE NEXT GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE ADDITION MADE BY ESTIMATING THE INCOME IN RESPECT OF THE WORKS ENTRUSTED TO THE SUB - CONTRACTORS AT 7.5% OF THE GROSS RECEIPTS. 10. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATING THE CONTENTION S URGED BEFORE THE LOWER AUTHO R ITI E S SUBMITTED TAKING US THROUGH THE COPIES OF RELEVANT SCHEDULES FORMING PART OF ITS FINAL ACCOUNTS FURNISHED IN THE PAPER BOOK THAT THE ASSESSEE PAID AN AMOUNT OF RS.27 6 3 32 548 TO ITS SUB - CONTRACTORS AND THE SAID AMOUNT IS DEBITED TO THE EXPENDITURE ACCOUNT. IN LIEU OF THE SUB - CONTR A CT WORKS GIVEN IT IS CLAIMED T HAT THE ASSESSEE RECEIVED SUB - CON T RACT COMMISSION OF RS .1 31 05 022 WHICH WAS AL R EADY IN C LU D ED IN THE OTHE R IN C OM E OF RS.1 72 34 426 ADMITTED BY THE ASSESSEE ITSELF IN THE RETURN. AS THE EXACT AMOUNT RE C EIVED BY THE ASSESSEE IS CLEARLY AVAILABLE IT IS SUBMITTED THE ASSESSEE IS NO T JUSTIFIED IN RESORTING TO ESTIMATION OF SUCH INCOME. IT IS FURTHER SUBMI T TED T HAT THE AMOUNT OF RS .27 63 32 548 DOES NOT REPRESENT ANY WORK DON E BY TH E ASSESSEE BUT REPR E SENTS ONLY THE WORK ENTRU S TED BY TH E ASSESSEE TO OTHERS RETAI N ING ONLY COMMISSION TO ITSELF. IN THIS VIEW OF THE MATTER IT IS SUBMITTED THAT THE ASSESSING OFFICER SHOULD BE DIRECTED TO SUBSTITUTE THE ACTUAL COMMISSION IN PLACE OF THE ESTIMATED INCOME BROUGHT TO TAX. ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 6 11. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE CIT(A) WHICH HE SUBMITTED FOLLOWED THE DECISIO N OF THE TRIBUNAL DATED 16.3.2012 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2001 - 02 AND 2002 - 03. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE FIND THAT THIS VERY ISSUE CAME UP FOR CONSIDERATION BEFORE THIS TRIBUNAL IN ASSESSEES OWN CASES FOR ASSESSMENT YEARS 200 1 - 0 2 AND 200 2 - 0 3 IN ITA NOS.430/HYD/2003 AND ITA NO.996/HYD/2003 AND THE TRIBUNAL VIDE ORDER DATED 16.3.2012 CONFIRMED THE ORDER OF THE CIT(A) ESTIMATING THE INCOME ON SUB - CONTRACT RECEIPTS AT 4% FOR ASSESSMENT YEARS 2001 - 02 AND 2002 - 03. ACCORDINGLY IN CONFORMITY WITH THE SAID ORDER OF THE TRIBUNAL FOR EARLIER YEARS WE SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ESTIMATE THE INCOME OF THE ASSESS EE FROM SUB - CONTRACT RECEIPTS ADOPTING A RATE OF 4%. TO THIS EXTENT GROUNDS O F THE ASSESSEE ON THIS ASPECT ARE PARTLY ALLOWED. 13. THE NEXT GRIEVANCE OF THE ASSESSEE IN THESE APPEALS RELATES TO ASSESSMENT OF INTEREST RECEIVED BY THE ASSESSEE. 14. TH E LEARNED COUNSEL FOR THE ASSESSEE REITERATING THE CONTENTIONS URGED BEFORE THE LOWER AUTHORITIES SUBMITTED THAT THE LOWER AUTHORITIES HAVE MADE THE IMPUGNED ADDITIONS WITHOUT CONSIDERING THE FACT THAT SUCH INTEREST WAS RECEIVED IN CONNECTION WITH PROVISI ON OF BANK GUARANTEE AND THE INTEREST RECEIVED IS ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS. TAKING US THROUGH COPIES OF VARIOUS SCHEDULES FORMING PART OF THE ACCOUNTS FURNISHED IN THE PAPER - BOOK IT IS SUBMITTED THAT THE I N T ER E ST IS DERIVED F R OM THE FIXED DEPOSITS AND THE DEPO S I T S REPRESENT THE MARGIN MONEY. IT IS SU B MI T TED THAT A NOTE IS ALSO PROVIDED IN THE RELEVANT SCHEDUL E S IN TH E ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 7 FINAL ACCOUNTS INDICATING THAT THE DEPOSITS WERE MADE FOR PROVIDING MARGIN MONEY. HE PLACED RELIANCE ON THE DECISION OF THE TRIBUNAL(TM) IN ASSESSEES OWN CA S E FOR ASSESSMENT YEARS 1991 - 92 AND 1992 - 93 IN ITA NOS.380 & 381/HYD/1994 OF THE ASSESSEE AND ITA NOS.601 & 602/HYD/1994 OF THE DEPARTMENT DULY FURNISHING COP IES OF THE ORDERS OF THE DIVISION BENCH AND THIRD MEMBER BEFORE US AND SUBMITTED THAT THE TRIBUNAL HELD THAT THE INTEREST ON FIXED DEPOSITS CANNOT B E SEPARATELY ASSESSED AS INCOME FROM OTHER S OU RC ES WHEN T HE NET INCOME IS ESTIMATED A PPLYING A FLAT RATE OF PROFIT. IT IS ALSO SUBMITTED THAT THE SAID DECISION HAS ALSO BEEN FOLLOWED BY THE TRIBUNAL IN ASSESSEES OWN CA S E FOR ASSESSMENT YEAR 1995 - 96 VIDE ORDER DATED 21.11.2001 IN ITA NO.1417/HYD /97. LEARNED COUNSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF THE JURISDI C T I ONAL HIGH COU R T IN THE CA S E OF CIT V/S. VIDYUT STEEL LTD. (219 ITR 30) WHEREIN IT WAS HELD THAT INTER E ST DERIVED ON TH E MARGIN MONEY FOR OB T AI N ING BANK GUARANTEE I S INEXTRICABLY CONNECTED WITH THE CONTRACT INCOME ITSELF AND THERE IS NO QUESTION OF CHARGING SUCH INTEREST INCOME UNDER S.56 OF THE ACT SEPARATELY. 15. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND STRONGLY SUPPORTED THE ORDERS OF THE LOWE R AUTHORITIES 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE ISSUE BEFORE US IS THE HEAD UNDER WHICH THE INTEREST INCOME DERIVED BY THE ASSESSEE FROM THE BANK DEPOSITS MADE TOWARDS MARGIN MONEY OR FO R SECURING BANK GUARANTEE HAS TO BE ASSESSED. IT IS THE CONTENTION OF THE ASSESSEE THAT THIS INTEREST INCOME IS INEXTRICABLY LINKED TO THE BUSINESS OF THE ASSESSEE AND HENCE IT HAS TO BE ASSESSED UNDER THE HEAD BUSINESS AND NOT AS INCOME FROM OTHER SOUR C ES AND CONSEQUENTLY IT IS THE CLAIM OF THE ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 8 ASSESSEE THAT THE ASSESSING OFFICER HAVING ESTIMATED THE ASSESSEES INCOME FROM BUSINESS AND ASSESSED THE SAME TO TAX NO SEPARATE ADDITION IS CALLED FOR UNDER S.56 FOR BRINGING TO TAX THE INTEREST INCOME IN Q UESTION UNDER THE HEAD OTHER SOURCES. IN SUPPORT OF THIS CONTENTION RELIANCE IS PLACED ON THE DECISIONS OF THE TRIBUNAL IN ASSESSEES OWN CASES FOR THE EARLIER YEARS NOTED ABOVE. ON CAREFUL CONSIDERATION OF THE MATTER WE FIND NO MERIT IN THE CONTENT IONS OF THE ASSESSEE ON THIS ASPECT. THE ISSUE AS TO THE HEAD UNDER WHICH THE I N TER E ST EARNED BY THE ASSESSEE EVEN IN THE COU R SE OF CARRYING ON THE BUSINESS NOW STANDS SETTLED BY THE DECISIONS OF THE APEX COURT IN TUTICORIN ALKALI CHEMICALS & FERTILISE RS LTD.( 227 ITR 172 ) AND PANDIAN CHEMICALS V/S. CIT(262 ITR 278). IN VIEW OF THE RATIO LAID DOWN BY THE APEX COURT IN THESE DECISIONS WHICH IN FACT HAVE BEEN FOLLOWED BY THE CIT(A) IN THE IMPUGNED ORDERS THE DECISIONS OF THE TRIBUNAL IN ASSESSEES OWN CASES FOR ASSESSMENT YEARS 1991 - 92 AND 1992 - 93 AND FOR ASSESSMENT YEAR 1995 - 96 NOTED (SUPRA) AS ALSO THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S. VIDYUT STEEL LTD.(219 ITR 30) ARE NO LONGER A GOOD LAW. IN THIS VIEW OF THE MATT ER FINDING NO MERIT IN THE GRIEVANCE OF THE ASSESSEE ON THIS ISSUE WE UPHOLD THE ORDERS OF THE CIT(A) ON THIS ISSUE AND REJECT THE GRONDS OF THE ASSESSEE IN THESE APPEALS. 17. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. REVENUES APPEALS : ITA NOS.1382 - 1383/HYD/2012 18. EFFECTIVE GROUNDS OF THE REVENUE COMMON IN BOTH TH E SE APPEALS READ AS FOLLOWS - ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 9 1 THE CIT(A) ERRED IN LAW IN SETTING ASIDE THE ASSESSMENT TO THE FILE OF THE A.O. FOR TAKING A DECISION ON DEDUCTION ALLOWABLE U/S. 80IA 2 THE CIT(A) ERRED IN LAW IN GRANTING DEDUCTION U/S. 80IA IN THE CASE OF SIMPLE WORKS CONTRACT IN VIOLATION OF EXPLANATION TO SECTION 80IA AND ALSO IN VIOLATION OF CIRCULAR NO.4/2010. 3. THE CIT(A) ERRED IN LAW IN LAYING DOWN PRINCIPLES TO DEFINE DEVELOPER WHICH ARE IN VIOLATION OF STATUTE. 4. THE CIT(A) GRANTED 80IA DEDUCTION IN A CASE WHERE ASSESSEE DID NOT GET INCOME AS DEVELOPER UPON EXPLOITATION OF A DEVELOPED ASSET BUILT BY HIM. 5. .. THUS THE ONL Y EFFECTIVE GRIEVANCE OF THE REVENUE IN THESE APPEALS RELATES TO ALLOWANCE OF DEDUCTION UNDER S.80IA TO THE ASSESSEE . 19 . FACTS OF THE CASE IN BRIEF FOR THE ASSESSMENT YEAR 2008 - 09 ARE THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT VIDE ORDE R DATED 16.12.2010 PASSED UNDER S.143(3) OF THE ACT INTER - ALIA DISALLOWED THE CLAIM OF THE ASSESSEE WHICH IS A COMPANY ENGAGED IN THE BUSINESS OF EXECUTION OF CIVIL CONTRACT WORKS FOR DEDUCTION OF RS.25 07 70 047 UNDER S.80IA OF THE ACT. ON APPEAL THE CIT(A) FOLLOWING ORDER OF THE TRIBUNAL DATED 16.3.2012 IN ASSESSEES OWN CASE FOR EARLIER YEARS ACCEPTED THE CLAIM OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER ACCORDINGLY. EXCEPT FOR THE AMOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE AS DEDUCT ION UNDER S.80IA OF THE ACT FACTS ARE IDENTICAL FOR THE ASSESSMENT YEAR 2009 - 10 AS WELL. AGGRIEVED REVENUE IS IN APPEAL BEFORE US. 20 . WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES FOR BOTH THE YEARS. IT IS AN UNDISPUTED FACT T HAT THE ISSUE IN DISPUTE RELATING TO ALLOWABILITY OF DEDUCTION UNDER S.80IA OF THE ACT TO THE ASSESSEE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 10 DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEARS AS NOTED ABOVE . SINCE THE IMPUGNED ORDERS OF THE CIT(A) ARE BASED ON THE VERY SAME ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASES FOR EARLIER YEARS WE FIND NO MERIT IN THE GRIEVANCE OF THE REVENUE AGAINST THE ACTION OF THE CIT(A) IN ALLOWING RELIEF CLAIMED BY THE ASSE SSEE UNDER S.80IA OF THE ACT. BESIDES THE FACT THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASES FOR EARLIER YEARS BY THE ORDER OF THE TRIBUNAL DATED 16 .3.2012 THIS TRIBUNAL OF LATE HAS BEEN CONSISTENTLY TAKING A VIEW IN SEVER AL SIMILAR MATTERS AS IN THE CASE OF M/S.SUSHEE HITECH CONSTRUCTIONS P. LTD.(NOW KNOWN AS SUSHEE INFRA P.LTD.) HYDERABAD IN ITA NO.414/HYD/2012 FOR ASSESSMENT YEAR 2008 - 09 VIDE ORDER DATED 1.5.2013 IN FAVOUR OF THE ASSESSEES AND ALLOWING DEDUCTION UND ER S.80IA OF THE ACT . IN CONSONANCE WITH THE CONSISTENT VIEW TAKEN BY THE TRIBUNAL IN SIMILAR MATTERS AS NOTED ABOVE AND THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEARS WE UPHOLD THE IMPUGNED ORDERS OF THE CIT(A) AND REJECT THE GROU NDS OF THE REVENUE ON THE ALLOWABILITY OF DEDUCTION UNDER S.80IA OF THE ACT. 2 1. IN THE RESULT BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. 22. TO SUM UP WHILE APPEALS OF THE ASSESSEE BEING ITA NO.1247/HYD/2012 FOR ASSESSMENT YEAR 2008 - 09 A ND ITA NO.1248/HYD/2012 FOR ASSESSMENT YEAR 2009 - 10 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES REVENUES APPEALS BEING ITA NOS.1382 AND 1383/HYD/2012 ARE DISMISSED. ITA NO. 1247 - 1248 & 1382 - 1383/HYD.2012 M/S. KMC CONSTRUCTIONS LTD. HYDERABAD 11 ORDER PRONOUNCED IN THE COURT ON 28.10.2013 SD/ - SD/ - ( SAKTIJIT DEY ) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/ - 28 T H OCT OBER 2013 COPY FORWARDED TO: 1. M/S. KMC CONSTRUCTIONS LTD. C/O. SHRI S.RAMA RAO FLAT NO.102 SHIRYA'S ELEGANCE NO.3 - 6 - 643 STREET NO.9 HIMAYATNAGAR HYDERABAD 500029 2. ASST. COMMISSIONER OF INCOME - TAX 2(1) HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) III HYDERABAD 4. COMMISSIONER OF INCOME - TAX II HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S.