I T O WD - 24(2) (1),, Mumbai v. M/S P.C. SHAH & CO, Mumbai

ITA 601/PUN/2007 | 2000-2001
Pronouncement Date: 17-11-2011 | Result: Dismissed

Appeal Details

RSA Number 60124514 RSA 2007
Assessee PAN MARCH2004D
Bench Pune
Appeal Number ITA 601/PUN/2007
Duration Of Justice 4 year(s) 9 month(s) 30 day(s)
Appellant I T O WD - 24(2) (1),, Mumbai
Respondent M/S P.C. SHAH & CO, Mumbai
Appeal Type Income Tax Appeal
Pronouncement Date 17-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 17-11-2011
Date Of Final Hearing 13-10-2011
Next Hearing Date 13-10-2011
Assessment Year 2000-2001
Appeal Filed On 18-01-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI G.S. PANNU (AM) ITA NOS.601 & 602/MUM/2007 (ASSTT. YEARS: 2000-01 & 2001-02) INCOME TAX OFFICER 24(2)(1) ... APP ELLANT 6 TH FLR C-13 BLDG. R.NO.606 PRATYAKSHAKAR BHAVAN BANDRA-KURLA COMPLEX BANDRA (E) MUMBAI 400 051 V. M/S. P.C. SHAH & CO. RESPONDENT B/104 DWARKADEVI SOCIETY 1 ST FLOOR DAFTARY ROAD MALAD (E) MUMBAI 400 097 PAN: NOT AVAILABLE ITA N O. 1269/PN/2006 (ASS TT. YEAR : 2000-01 ) INCOME TAX OFFICER WARD 2(1) APPELLANT JALGAON B.J. MARKET JILHAPETH JALGAON V. P.C. SHAH DEVELOPERS PVT. LTD. RESPONDENT 43/2 PRATAP NAGAR JILHA PETH JALGAON 425 001 PAN : NOT AVAILABLE ITA NO. 3889/MUM/2005 ( ASSTT.YEAR : 2001-02) INCOME TAX OFFICER 9(2)(4) APPELLANT AAYAKAR BHAVAN ROOM NO. 221 M.K. ROAD MUMBAI 400020 V. M/S. P.C. SHAH DEVELOPERS PVT. LTD. RESPONDENT B/104 3 RD FLOOR DWARKADEVI SOCIETY DAFTARY ROAD MALAD (EAST) MUMBAI 400 097 PAN: NOT AVAILABLE APPELLANT BY : SHRI S.K. AMBASTHA RESPONDENT BY : S/SHRI SUNIL PATHAK & NIKHIL PATHA K DATE OF HEARING :13.10.11 DATE OF PRONOUNCEMENT: 17.11.11 ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 2 ORDER PER I.C. SUDHIR JM THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER I N THE CASE OF M/S. P.C. SHAH & CO. IN FOLLOWING GROUNDS (A.Y. 2000-01 & 200 1-02) : 1. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE C IT(A) ERRED IN DELETING THE SUBSTANTIVE ASSESSMENT MADE IN THE HANDS OF THE ASSESSEE BY STATING THAT TRANSFER OF PROJECT BY THE ASSESSEE OF M/S. P. C. SHAH DEVELOPERS P. LTD. WAS VALID IGNORING THE FACTS BROUGHT ON RECORDS BY THE ASSESSING OFFICER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN DELETING THE SUBSTANTIVE ADDITION ON THE BASIS OF O RDER OF CIT(A)-IX MUMBAI WHICH HAS NOT BEEN ACCEPTED AND CONTESTED BEFORE IT AT IN THE CASE OF M/S. P.C. SHAH DEVELOPERS P. LTD. 2. IN THE CASE OF P.C. SHAH DEVELOPERS PVT. LTD. T HE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER AS UNDER : A.Y. 2000-01 1. ON THE FACTS AND IN CIRCUMSTANCE OF THE CASE THE CIT(A)-II ERRED IN CONCLUDING THAT THE ASSESSEE COMPANY WAS ELIGIBLE F OR DEDUCTION U/S. 80IA(4). 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CAS E THE CIT(A)-II FAILED TO APPRECIATE THE FACT THAT SINCE THE FIRM M/S. P.C. S HAH & CO. WAS NOT ELIGIBLE FOR DEDUCTION U/S. 80IA(4) THE SUCCESSOR COMPANY TO O WAS NOT ELIGIBLE FOR DEDUCTION U/S. 80IA(4) SINCE THE PROVISO TO THE SEC TION WHICH RELATES TO CASES OF TRANSFER OF THE INFRASTRUCTURE FACILITY CLEARLY STATES THAT THE SUCCESSOR ENTERPRISE WILL BE ENTITLED TO THE DEDUCTION FOR TH E UNEXPIRED PERIOD DURING WHICH THE TRANSFEROR ENTERPRISE WOULD HAVE BEEN EN TITLED TO THE DEDUCTION IF THE TRANSFER HAD NOT TAKEN PLACE AND SINCE IN THE P RESENT CASE THE TRANSFEROR ENTERPRISE IS NOT ELIGIBLE FOR THE DEDUCTION THE TR ANSFEREE ENTERPRISE WOULD ALSO NOT BE ENTITLED TO THE DEDUCTION. ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 3 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A)-II ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFI CER OF RS.40 88 524/- U/S 68 ON ACCOUNT OF EXCESS TOLL RECEIPTS SHOWN. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A)-II ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFI CER OF RS.11 88 610/- ON ACCOUNT OF INCOME EARNED ON THE BOT PROJECT. A.Y. 2001-02 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LEARNED CIT(A) ERRED IN DIRECTING TO THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S 80IA(4A) OF THE I T ACT 1961 WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) ERRED IN DELETING THE ESTIMATION OF BOT PROJECT INCOME AT RS.21 40 000/- WITHOUT APPRECIATING THE FACTS BROUG HT ON RECORD BY THE ASSESSING OFFICER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS .81 52 001/- MADE TO THE TOTAL INCOME OF THE ASSESSEE COMPANY U/S 68 OF THE I T ACT 1961 WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASS ESSING OFFICER. 3. SINCE THE ISSUE RAISED IN THE ABOVE APPEALS ARE INTER-CONNECTED THESE APPEALS ARE BEING DISPOSED OF BY A CONSOLIDATED ORD ER. 4. THE RELEVANT FACTS ARE THAT THE FIRM M/S. P.C. S HAH & CO. (HENCEFORTH REFERRED TO AS FIRM) WAS ENGAGED IN THE BUSINESS OF CIVIL C ONSTRUCTION. THE RETURNS OF INCOME FILED BY IT FOR THE A.YS. 2000-01 AND 2001-02 WERE PROCESSED U/S. 143(1). THEREAFTER AN INFORMATION WAS RECEIVED BY THE A.O FROM THE ADDL. CIT RANGE 9(2) MUMBAI THAT P.C. SHAH DEVELOPERS PVT. LTD. (HENCEFO RTH REFERRED TO AS COMPANY ) WAS ASSESSED IN HIS RANGE. HE HAD COMPLETED THE AS SESSMENT OF THE SAID COMPANY FOR THE A.Y. 2001-02. THE PROJECT BRIDGE ON SURAT -DELHI-EDLABAD-NAGPUR ROAD IN ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 4 DHULE DISTRICT MAHARASHTRA CAME UNDER BOT AND WAS CATEGORIZED UNDER THE INFRASTRUCTURE DEVELOPMENT SCHEME OF THE GOVERNMENT OF MAHARASHTRA. THE CONSTRUCTION OF THE BRIDGE WAS DONE BY THE FIRM. A FTER COMPLETION IT WAS TRANSFERRED TO THE COMPANY. THE A.O. TREATED THE T RANSFER OF THE PROJECT FROM THE FIRM TO THE COMPANY AS NOT A VALID TRANSFER AND AS SESSED THE INCOME FROM THE BRIDGE IN THE HANDS OF THE COMPANY ON PROTECTIVE BA SIS LEAVING THE SUBSTANTIVE ASSESSMENT IN THE NAME OF THE FIRM. THE A.O. ACCOR DINGLY SUGGESTED TO TAKE ACTION AGAINST THE FIRM IN BOTH THE A.YS. THE A.O. FOLLOW ING THE ASSESSMENT COMPLETED IN THE CASE OF THE COMPANY FOR THE A.Y. 2001-02 COMPU TED THE INCOME FROM THE BRIDGE AT RS.15 83 706/- BY REDUCING THE COST OF RS .65 16 764/- FROM THE TOLL RECEIPTS OF RS.81 00 470/- FOR THE A.Y. 2000-01 AND AT RS.1 02 92 001/- BY REDUCING COST OF RS. 28 47 723/- FROM THE TOLL RECEIPT OF RS . 1 31 39 724/- FOR A.Y. 2001-02. THE A.O FRAMED THESE ASSESSMENTS FOR BOTH THE A.YS. U/S. 143(3) R.W. SECTION 147 OF THE ACT BY MAKING THE ADDITION OF AFORESAID SUM S ON SUBSTANTIVE BASIS IN THE HANDS OF THE FIRM. SHE HAS HOWEVER MENTIONED IN TH E ASSESSMENT ORDERS THAT LD CIT(A) IX MUMBAI HAS ALREADY DELETED THE ADDITION S MADE BY THE A.O. IN THE CASE OF THE COMPANY IN THE A.Y. 2001-02 ON THE BASIS OF WHICH THE ADDITIONS WERE MADE IN THE HANDS OF THE FIRM. 5. AFTER CONSIDERING THE CASES OF THE PARTIES THE LD CIT(A) HAS DELETED THE ABOVE ADDITIONS AGAINST WHICH THE REVENUE IS IN APP EALS BEFORE US. 6. SO FAR AS CASE OF THE COMPANY IS CONCERNED THE RETURN OF THE COMPANY FOR THE A.Y. 2000-01 I.E. THE FIRST YEAR AFTER INCORPOR ATION SHOWING TOTAL INCOME OF RS.4120/- AFTER CLAIMING EXEMPTION U/S. 80 IA(4) (I ) OF THE ACT WAS PROCESSED U/S. 143(1)(A) OF THE ACT ON 10.1.2002. SINCE THE ASSES SMENT FOR THE A.Y. 2001-02 WAS COMPLETED BY THE A.O ON 31 ST MARCH 2004 DENYING DEDUCTION U/S. 80IA OF THE ACT A NOTICE U/S. 148 WAS ISSUED IN THE A.Y. 2000-01 ON 1 .11.2004 AND SERVED UPON THE ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 5 ASSESSEE COMPANY ON 2.11.2004. ACCORDINGLY ASSESS MENT FOR A.Y. 2000-01 WAS FRAMED. 7. THE ASSESSMENT FOR A.Y. 2001-02 IN THE CASE OF C OMPANY WAS CONTESTED BY THE ASSESSEE IN THE APPEAL AND THE LD CIT(A) ALLOWE D THE APPEAL. ON THE BASIS OF SAID FIRST APPELLATE ORDER IN THE A.Y. 2001-02 THE LD CIT(A) HAS ALSO ALLOWED THE APPEAL PREFERRED IN THE A.Y. 2000-01. THE ORDER IN THESE FIRST APPEALS IN THE CASE OF ASSESSEE COMPANY HAVE ALSO BEEN QUESTIONED BY THE R EVENUE BEFORE US. 8. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES IN VIEW OF ORDERS OF AUTHORITIES BELOW MATERIAL AVAIL ABLE ON RECORD AND THE DECISIONS RELIED UPON. THE ISSUE INVOLVED IN THE CASE OF THE FIRM IS REGARDING THE TOLL COLLECTION FROM THE BRIDGE CONSTRUCTED ON SURAT-DE LHI-EDALABAD-NAGPUR ROAD IN DHULE DISTRICT MAHARASHTRA. 9. THE RELEVANT FACTS ARE THAT THE CONTRACT WAS AWA RDED TO THE ASSESSEE FIRM BY THE PUBLIC WORKS DEPARTMENT OF GOVERNMENT OF MAHARA SHTRA ON 18.3.1996. THE WORK OF CONSTRUCTION COMMENCED ON 25 TH MARCH 1998 AFTER THE WORKING DRAWING WAS RECEIVED FROM PWD. THEREAFTER THE CONTRACT WA S CONVERTED INTO BOT ON 12.5.1999. THE CONSTRUCTION OF THE BRIDGE WAS COMP LETED ON 30 TH SEPTEMBER 1999 AND THE TOLL COLLECTION STARTED FROM 1.10.1999. TH EREAFTER THE BRIDGE WAS TRANSFERRED BY THE FIRM TO THE COMPANY WHICH WAS IN CORPORATED FOR THE PURPOSE OF TAKING OVER OF THE BUSINESS OF THE FIRM. THE SAID TRANSFER TOOK PLACE ON 11.11.1999 FOR CONSIDERATION OF RS. 36 93 428/- BEING THE COST OF CONSTRUCTION OF THE BRIDGE AT RS. 51 99 374/- LESS THE TOLL OF RS. 15 05 946/- CO LLECTED BY FIRM FOR THE PERIOD FROM 1.10.1999 TO 10.11.1999. THE SAID TRANSFER HAD TAK EN PLACE AS PER THE AGREEMENT BETWEEN THE COMPANY AND THE FIRM DATED 15.11.1999. THE CHANGE OF NAME FROM M/S. P.C. SHAH & COMPANY TO P.C. SHAH DEVELOPERS PV T. LTD. WAS PERMITTED BY THE CHIEF ENGINEER PWD FOR THE PURPOSE OF COLLECTION O F TOLL AND MAINTENANCE OF THE ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 6 BRIDGE. AS THE BRIDGE BELONGED TO THE COMPANY W.E. F. 11.11.1999 THE TOLL COLLECTED AND THE EXPENDITURE ON MAINTENANCE INCURRED THEREAF TER CLAIMED BELONGED TO THE COMPANY. THE A.O HOWEVER TOOK THESE RECEIPTS AND EXPENDITURE IN THE HANDS OF THE FIRM IN THE A.YS. 2000-01 AND 2001-02. 10. BEFORE THE LD CIT(A) IT WAS CONTENDED THAT THE VERY BASIS OF THE ASSESSMENT OF THE INCOME IN THE HANDS OF THE FIRM REMAINED T HE ASSESSMENT ORDER IN THE CASE OF THE COMPANY FOR A.Y. 2001-02. THE LD CIT(A) HAS ALLOWED APPEAL OF THE COMPANY FOR THE A.Y. 2001-02 AND FOLLOWING THE SAME THE APPEAL FOR THE A.Y. 2000- 01 HAS ALSO BEEN ALLOWED. AS PER THE DECISION OF THE LD CIT(A) IN THOSE APPEALS THE INCOME AND EXPENDITURE WITH RESPECT TO THE BRI DGE AFTER 11..11.1999 BELONGED TO THE COMPANY. IT WAS PLEADED BEFORE THE LD CIT( A) THAT SAME INCOME AND EXPENDITURE CANNOT BE CONSIDERED IN THE HANDS OF TH E FIRM ALSO. 11. THUS WE FIND THAT THE ISSUE RAISED BEFORE THE LD CIT(A) IN THE CASE OF THE ASSESSEE FIRM REMAINED THAT AS TO WHETHER THE TRANS FER OF THE OPERATION AND MAINTENANCE OF THE BRIDGE BY THE FIRM TO THE COMPAN Y ON 11.11.1999 WAS A VALID TRANSFER AND ACCORDINGLY WHETHER THE TOLL RECEIVED AND THE EXPENDITURE INCURRED ON THE MAINTENANCE OF THE BRIDGE W.E.F. 11.11.1999 SHO ULD BE CONSIDERED IN THE HANDS OF THE FIRM OR IN THE HANDS OF THE COMPANY. THE LD CIT(A) HAS DECIDED THE FIRST APPEAL IN FAVOUR OF THE ASSESSEE IN THE A.Y BY FOLL OWING FINDINGS : 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE A ND SUBMISSIONS OF THE APPELLANT. I HAVE ALSO GONE THROUGH ALL THE R ELEVANT DOCUMENTS. THE ONLY ISSUE INVOLVED IS WHETHER THE TRANSFER OF THE OPERATION AND MAINTENANCE OF THE BRIDGE BY THE FIRM TO THE COMPANY ON 11/11/1 999 WAS A VALID TRANSFER AND ACCORDINGLY WHETHER THE TOLL RECEIVED AND EXPE NDITURE INCURRED ON THE MAINTENANCE OF THE BRIDGE W.E.F. 11/11/1999 SHOULD BE CONSIDERED IN THE HANDS OF THE FIRM OR IN THE HANDS OF THE COMPANY. THE ISSUE OF TRANSFER HAS BEEN DISCUSSED BY THE LD. CSIT(A) IN THE CASE OF TH E COMPANY FOR THE A.YS.2000-01 AND 2001-02(SUPRA). THEY HAVE CATEGOR ICALLY HELD THAT THE TRANSFER WAS VALID. THE PROVISION OF THE TRANSFER OF THE PROJECT WAS DULY ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 7 INCORPORATED IN THE ORIGINAL CONTRACT AWARDED TO T HE APPELLANT BY THE P.W.D. WITH THE PERMISSION OF THE CHIEF ENGINEER. THE CHI EF ENGINEER P.W.D. ALLOWED THE CHANGE OF NAME OF THE CONTRACTOR IN TH E RECORD OF THE GOVERNMENT FROM M/S. P.C. SHAH & CO. TO M/S. P.C. S HAH DEVELOPERS PVT. LTD. AND ALLOWED THE COMPANY TO COLLECT THE TOLL AN D MAINTAIN THE BRIDGE W.E.F. 11/11/1999. THE TRANSFER WAS AFFECTED AT TH E COST PRICE I.E. THE COST INCURRED ON THE CONSTRUCTION OF THE BRIDGE AS REDUC ED BY THE TOLL COLLECTED BY THE FIRM BEFORE THE TRANSFER. CONSIDERING ALL THE SE FACTS I DO NOT FIND ANY REASON TO DISAGREE WITH THE FINDINGS OF THE LD. CSI T(A) IN THEIR ORDERS FOR THE COMPANY AND SO THE TRANSFER IS HELD AS A VALID TRAN SFER. 7. BOTH THE CSIT(A) (SUPRA) AFTER DETAILED DISCUSS ION OF THE FACTS AND ISSUES HELD THAT THE OPERATION AND MAINTENANCE OF THE BRIDGE FROM THE DATE OF TRANSFER I.E. 11/11/1999 BELONGED TO THE COMPANY . THEY ACCORDINGLY REJECTED ALL THE DECISIONS OF THE ASSESSING OFFICE RS OF THE COMPANY FOR THE A.YS. 2000-01 AND 2001-02 AND HELD THAT THE INCOME ON ACCOUNT OF TOLL COLLECTED FROM 11/11/1999 SHOULD BE ASSESSED IN TH E HANDS OF THE COMPANY. THEY ALSO ALLOWED THE DEDUCTION U/S. 80IA TO THE CO MPANY ON THE SAID INCOME. AS THE OPERATION AND MAINTENANCE OF THE BR IDGE WAS VALIDLY TRANSFERRED BY THE FIRM TO THE COMPANY ON 11/11/199 9 ALL THE RIGHTS AND LIABILITIES OF THE FIRM WITH RESPECT TO THE BRIDG E CEASED FROM THAT DATE. IT BECAME THE RESPONSIBILITY OF THE COMPANY TO COLLEC T TOLL AND MAINTAIN THE BRIDGE FROM THAT DATE. AS SUCH THE INCOME FROM TH E TOLL COLLECTED W.E.F. 11/11/1999 WAS RIGHTLY HELD AS ASSESSABLE IN THE HA NDS OF THE COMPANY BY LD. CSIT(A)(SUPRA). THE SAME INCOME CANNOT BE ASSE SSED IN THE HANDS OF THE FIRM ALSO. BY RESPECTFULLY FOLLOWING THEIR ORD ERS THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE INCOME AND EXPENDITURE WIT H RESPECT TO THE BRIDGE IN THE HANDS OF THE FIRM ONLY UPTO 10/11/1999. ACCORDI NGLY THE ADDITIONS MADE ON ACCOUNT OF TOLL COLLECTED FROM 11/11/1999 IN THE HANDS OF THE FIRM ARE DELETED. 12. WE THUS FIND THAT THE VERY BASIS OF ALLOWING R ELIEF TO THE ASSESSEE IN THE PRESENT APPEALS OF THE FIRM IS THE FIRST APPELLATE ORDER FOR THE A.YS. 2000-01 AND 2001-02 IN THE CASE OF THE COMPANY HOLDING THAT THE OPERATION AND MAINTENANCE OF THE BRIDGE FROM THE DATE OF TRANSFER I.E. 11.11.199 9 BELONGED TO THE COMPANY. THEY ALSO ALLOWED THE DEDUCTION U/S. 80IA TO THE C OMPANY ON THE SAID INCOME ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 8 HOLDING THAT THE OPERATION AND MAINTENANCE OF THE B RIDGE WAS VALIDLY TRANSFERRED TO THE COMPANY ON 11.11.1999 ALL THE RIGHTS AND LIABI LITIES OF THE FIRM WITH RESPECT TO THE BRIDGE CEASED FROM THAT DATE. WE THUS FIND THA T THE ASSESSMENT ORDERS IN THE CASE OF FIRM ARE CONSEQUENTIAL TO THE ASSESSMENTS MADE IN THE CASE OF THE COMPANY. LIKEWISE THE FIRST APPELLATE ORDER IN TH E CASE OF FIRM ARE BASED UPON THE FIRST APPELLATE ORDER IN THE CASE OF THE COMPANY. 13. IN THE CASE OF THE COMPANY THE ISSUES HAVE BEE N DISCUSSED IN DETAIL BY THE LD CIT(A). IT IS EMERGING THERE- FROM THAT THE A.O AFTER EXAMINING THE VARIOUS ISSUES AND CORRESPONDENCE BETWEEN THE FIRM AND THE PWD AUTHORITIES OF GOVERNMENT OF MAHARASHTRA AND ALSO CONSIDERING THE STATEMENTS ON OATH THAT THE ASSESSEE HAD INCURRED AN AMOUNT OF RS. 31.13 LAKHS AS UNACCOUNTED EXPENDITURE DURING THE F.YS. 1997-98 TO 2000-01. CONSIDERING T HE TOTAL EXPENDITURE ADMITTED BY THE ASSESSEE IN THE RETURNS OF INCOME FOR THE CORRE SPONDING PERIOD HE ARRIVED AT THE TOTAL COST OF THE PROJECT AT RS. 125.335 LAKHS. 14. THE TOTAL RECEIPT ON ACCOUNT OF TOLL COLLECTION S SHOWN BY THE ASSESSEE COMPANY AND ALSO BY THE ASSESSEE FIRM DURING THE F. YS. 1999-2000 TO 2000-01 WAS RS.2 12 40 194/-. THE A.O DISBELIEVED THE TOLL COL LECTIONS SHOWN BY THEM AND ESTIMATED THE TOLL COLLECTIONS AT RS. 74.94 LAKHS. WHILE ESTIMATING THE TOLL RECEIPT THE A.O RELIED ON A REPORT RECEIVED FROM THE R.T.O. THE A.O DID NOT ACCEPT THE COLLECTIONS AS SHOWN IN THE BOOKS OF ACCOUNT AND TH E MONTHLY REPORT OF THE TOLL COLLECTIONS SENT TO THE PWD AUTHORITIES. SINCE T HE A.O. HAD ALREADY DETERMINED THE COST OF PROJECT AT RS. 125.33 LAKHS (INCLUDING UNAC COUNTED EXPENSES) AND ESTIMATED THE TOLL COLLECTION AT RS. 74.94 LAKHS HE CAME TO THE CONCLUSION THAT THE TOTAL EXPENDITURE EXCEEDED THE TOLL COLLECTION RECEIPT A ND CLAIMED DEDUCTION U/S. 80IA WAS DENIED. ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 9 15. THE A.O ALSO CONSIDERED THE ISSUE OF TRANSFERRI NG OF THE BRIDGE BY THE FIRM TO THE COMPANY. HE EXAMINED CORRESPONDENCE BETWEEN T HE TWO CONCERNS AND THE PWD AND CAME TO THE CONCLUSION THAT THE TRANSFER TO OK PLACE W.E.F. 9.9.2000 AS PER THE NOTIFICATION OF THE GOVERNMENT OF MAHRASHTRA TH OUGH APPROVAL WAS GIVEN BY THE CHIEF ENGINEER OF PWD W.E.F. 18.11.1999. THE A.O A LSO DISCUSSED THE PROVISIONS OF SECTION 47(XIII) AND BASED ON THE FINDINGS REGARDIN G THE APPROVAL OF THE CHANGE OF NAME HE CONCLUDED THAT THE TRANSFER OF BOT PROJECT WAS COMPLETE ONLY BY 31 ST MARCH 2002. THEREFORE THE BENEFIT U/S. 80 I TO TH E ASSESSEE COMPANY WERE DENIED. HOWEVER IT WAS STATED BY THE COMPANY THAT SINCE T HE ASSESSEE COMPANY CLAIMED THAT THE BOT PROJECT WAS TRANSFERRED TO THE ASSESSE E COMPANY THE NET RECEIPT OF BOT PROJECT WAS TO BE TAXED IN THE HANDS OF THE ASS ESSEE COMPANY ON PROTECTIVE BASIS AND THE BALANCE RECEIPTS WERE TO BE TAXED ON SUBSTANTIVE BASIS AS UNACCOUNTED INCOME OF THE ASSESSEE COMPANY U/S. 68 FOR THE A.Y. 2001-02. THE FACTS AND CIRCUMSTANCES FOR THESE A.YS. 2000-01 AND 2001-02 ARE IDENTICAL AND INTER CONNECTED. 16. BEFORE THE LD CIT(A) THE ASSESSEE MADE DETAILE D SUBMISSIONS AS DISCUSSED BY THE LD CIT(A) IN THE FIRST APPELLATE ORDER. ON THE ISSUE OF DATE OF TRANSFER OF OWNERSHIP OF THE PROJECT BY THE FIRM TO THE COMPANY IT WAS SUBMITTED THAT MERE PWD NOTIFICATION COULD NOT CHANGE THE SITUATION AS THE DEFACTO OWNERSHIP OF THE PROJECT BELONGS TO THE ASSESSEE COMPANY. ON THE IS SUE OF ELIGIBILITY TO THE CLAIMED DEDUCTION U/S. 80IA(4)(I) OF THE ACT IT WAS CONTEN DED THAT A DEDUCTION OF 100% INCOME IS ALLOWED IF THE ENTERPRISE CARRYING ON THE BUSINESS OF (A) DEVELOPING OR (B) MAINTAINING AND OPERATING OR (C) DEVELOPING MAINTA INING AND OPERATING ANY INFRASTRUCTURE FACILITY. IT WAS SUBMITTED THAT THE INFRASTRUCTURE FACILITY MEANS A ROAD INCLUDING TOLL ROAD A BRIDGE OR A RAIL SYSTEM. IT WAS SUBMITTED FURTHER THAT THE ASSESSEE SHOULD HAVE ENTERED INTO AN AGREEMENT WIT H CENTRAL/STATE GOVERNMENT/OTHER SPECIFIED AUTHORITIES FOR THE SAI D INFRASTRUCTURAL ACTIVITY SUBJECT TO ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 10 THE CONDITION THAT SUCH FACILITY SHALL BE TRANSFERR ED TO THE SAID AUTHORITY WITHIN THE STIPULATED PERIOD. THE ENTERPRISE SHOULD HAVE STAR TED OPERATING AND MAINTAINING THE INFRASTRUCTURAL FACILITY ON / AFTER 1.4.1995. IT WAS SUBMITTED THAT WHERE SUCH FACILITY IS TRANSFERRED AFTER 1.4.1999 BY AN ENTERPRISE (WH ICH DEVELOP SUCH FACILITIES) TO ANOTHER ENTERPRISE FOR THE PURPOSE OF OPERATING AND MAINTAINING ON BEHALF OF ANY OF THE AFORESAID AUTHORITY THEN THE TRANSFEREE ENTER PRISE IS ALSO ELIGIBLE FOR DEDUCTION UNDER THIS PROVISION. 17. CONSIDERING THE ABOVE CONTENTIONS WE FIND THAT THE LD CIT(A) HAS RIGHTLY DECIDED THE ISSUES IN FAVOUR OF THE ASSESSEE COMPAN Y. ON THE ISSUE OF ELIGIBILITY OF THE CLAIMED DEDUCTION U/S. 80IA(4)(I) OF THE ACT T HE LD CIT(A) HAS GIVEN FOLLOWING FINDING VIDE PARA NO. 13 OF THE FIRST APPELLATE ORD ER FOR THE A.Y. 2000-01 WHICH IS BEING REPRODUCED HEREUNDER : I HAVE GONE THROUGH THE ASSESSMENT ORDER THE DETA ILED SUBMISSIONS MADE BY THE ASSESSEE. THE ASSESSEE FULFILLED ALL T HE CONDITIONS OF THE SAID PROVISION. THE INFRASTRUCTURE WAS DEVELOPED BY M/ S. P.C. SHAH & CO. AND TRANSFERRED VALIDLY TO THE ASSESSEE COMPANY. THE R ATIO OF THE DECISIONS QUOTED BY THE ASSESSEE ARE APPLICABLE TO THE ASSESS EES CASE. INSTEAD OF EXAMINING THE ISSUES AS PER THE PROVISIONS THE A.O . GONE INTO THE COST OF CONSTRUCTION. THE COST OF CONSTRUCTION DETERMINED BASED ON THE CORRESPONDENCE BETWEEN M/S. P.C. SHAH & CO. AND TH E P.W.D. AUTHORITIES AND CONCLUDED THE COST OF CONSTRUCTION EXCEEDED THE ESTIMATED TOLL COLLECTIONS AND DEDUCTION U/S. 80IA OF THE I.T. ACT. THE ASSES SEE COMPANY AS PER THE AGREEMENT ENTERED WITH M/S. P.C. SHAH & CO. (THE FI RM) GOT THE RIGHTS TO OPERATE & MAINTAIN THE BRIDGE. THE SAID FIRM ASSIGN ED THE RIGHT TO THE ASSESSEE WHICH IS LEGAL. THE A.O. ALSO TRIED TO EX AMINE THE PROVISIONS OF SECTION 47(XIII) WHICH ARE RELATING TO THE CAPITAL GAINS. THE SUBSECTION 47(XIII) SAYS NOTHING CONTAINED IN SECTION 45 SHALL APPLY TO THE CASES MENTIONED IN THE SAID PROVISIONS REGARDING TRANSFER IN CONNECTION WI TH CAPITAL GAINS. THE ISSUE UNDER CONSIDERATION IS RELATING TO TRANSFER OF IN FRASTRUCTURE FACILITY FOR THE PURPOSE OF OPERATING AND MAINTENANCE UNDER THE PROV ISIONS OF SECTION 80IA OF THE I.T. ACT WHEREAS THE A.O. UNNECESSARILY TAK EN PAINS TO ANALYSE THE PROVISIONS OF SECTION 47(XIII) IN THIS CONTEXT. THE REFORE I FULLY AGREE WITH THE ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 11 CONCLUSIONS OF THE CIT(A)-IX MUMBAI IN HIS ORDER D ATED 23.03.2005 IN CONCLUDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCT ION U/S. 80IA(4)(I ) OF THE I.T. ACT. 18. ON THE ISSUE OF ESTIMATION OF THE TOLL COLLECT ION THE LD CIT(A) HAS GIVEN HIS FINDING IN PARA NO. 15 OF THE FIRST APPELLATE ORDER FOR THE A.Y. 2000-01 REPRODUCED HEREUNDER : THE ASSESSEE COMPANY MAINTAINED THE REGULAR BOOKS OF ACCOUNTS AND GOT THEM AUDITED AS PER THE PROVISIONS OF SECTION 4 4AB OF THE I.T. ACT. THE A.O. HAS NOT REJECTED THE BOOKS OF ACCOUNTS. WHILE ESTIMATING THE TOLL COLLECTIONS THE ADDL. CIT RELIED ON LETTER DATED 2 4.03.04 RECEIVED FROM THE RTO CHECK POST NAVAPUR. THE ASSESSEE MAINTAINED T HE COMPLETE DETAILS OF THE TOLL COLLECTIONS RECORDED IN THE BOOKS OF ACCOU NTS WHEREAS THE RTO BASED HIS DETAILS ONLY IN RESPECT OF THE VEHICLES CHECKED BY THEIR INSPECTORS. IT IS ALSO STATED IN THE SAID LETTER THAT ALL TRANSPORT V EHICLES ARE NOT CHECKED. THE ADDL. CIT WITHOUT UNDERSTANDING THE MODUS OPERANDI FOLLOWED BY THE ASSESSEE FOR MAINTAINING THE RECORDS RELATING TO TH E TOLL RECEIPTS DISBELIEVED THE TOLL COLLECTIONS SHOWED IN THE BOOKS OF ACCOUN TS. THE ASSESSEE WAS ALSO SENDING PERIODICAL STATEMENTS TO THE P.W.D. AUTH ORITIES AND ABLE TO PROVE MAJORITY OF THE SUCH REPORTS SENT TO THE P.W.D. AU THORITIES WITH ACKNOWLEDGEMENTS WITH CONTEMPORANEOUS RECORDS. THE ESTIMATE ARRIVED AT BY THE A.O. IS NOT IN ORDER. THEREFORE I FULLY A GREE WITH THE FINDINGS OF THE CIT(A)-IX MUMBAI IN HIS ORDER DATED 25.03.05 I N COMING TO THE CONCLUSION THAT THE TOLL COLLECTIONS ACCOUNTED BY THE APPELLANT ARE EVIDENCED BY BOOK ENTRIES AND OTHER COGENT EVIDENCES WHEREAS THE A.O. BASED THE FIGURES OF TOLL COLLECTIONS ON ESTIMATE BY STATING FIGURES GIVEN BY THE INSPECTOR OF MOTOR VEHICLES WHICH WERE NOT FULL AND COMPLETE AS CONFIRMED BY THE INSPECTOR OF MOTOR VEHICLES HIMSELF. THEREFORE TH E AMOUNT OF TOLL COLLECTIONS ESTIMATED BY THE A.O. IS NOT CORRECT AND NOT ACCEPT ABLE. 19. IN SUPPORT OF THE GROUND THE D.R. HAS BASICAL LY PLACED RELIANCE ON THE ASSESSMENT ORDER WHICH WE HAVE ALREADY DISCUSSED HE REINABOVE. THE LD. A.R. ON THE OTHER HAND TRIED TO JUSTIFY THE FIRST APPELLAT E ORDERS ON THE ISSUES RAISED IN THE GROUNDS. WE HAVE ALSO DISCUSSED THE FINDING OF THE LD CIT(A) ON THE ISSUES RAISED IN THE GROUNDS. AS WE HAVE SEEN THAT THERE IS NO R EASON TO DOUBT THE GENUINENESS ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 12 OF THE TRANSFER OF THE FIRM INTO THE COMPANY AS TH E SAME WAS ALSO WITH THE APPROVAL OF THE PWD MEETING OUT THE OTHER REQUIREME NT OF THE RELATED PROVISIONS OF LAW. THERE IS ALSO NO SUBSTANCE IN THE CONTENTION OF THE LD. D.R. THAT SINCE ASSESSEE FIRM WAS NOT ELIGIBLE FOR THE DEDUCTION U /S. 80IA (4) OF THE ACT THE ASSESSEE COMPANY CANNOT BE MADE ENTITLED FOR THE S AME SINCE THERE IS NO DISPUTE THAT AN ENTERPRISE IS ENTITLED FOR THE DEDUCTION UN DER THE SAID PROVISION EVEN FOR MAINTENANCE AND OPERATION OF THE PROJECT. THE ASSE SSEE COMPANY WAS MAINTAINING AND OPERATING THE PROJECT AFTER THE PROJECT WAS TRA NSFERRED TO IT BY THE FIRM. WE THUS DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD WHICH IS SPEAKING ONE. SO FAR AS ESTIMATION OF TOLL COL LECTION MADE BY THE A.O IS CONCERNED IT WAS BASED ON THE FIGURE GIVEN BY THE INSPECTOR OF MOTOR VEHICLE WHICH WERE NOT FULLY AND COMPLETE AS CONFIRMED BY THE IN SPECTOR OF MOTOR VEHICLES HIMSELF. ON THE OTHER HAND THE TOLL COLLECTION AS ACCOUNTED BY THE ASSESSEE WAS EVIDENCED BY BOOK ENTRY AND OTHER COGENT EVIDENCE. THE COST OF THE PROJECT AS INCURRED BY THE ERSTWHILE FIRM WAS ALSO SUPPORTED B Y THE BOOKS OF ACCOUNT AND RELEVANT SUPPORTING EVIDENCE MAINTAINED BY THE ASSE SSEE WHILE THE A.O HAD MADE ESTIMATE BY TAKING THE FIGURE FROM THE ESTIMATE AND HALFHAZARD INFORMATION GIVEN BY THE EXECUTIVE ENGINEER AS WELL AS FIGURES OF ESTIMA TE MENTIONED IN THE BID TENDER. KEEPING IN VIEW ALL THESE MATERIAL ASPECTS WE ARE OF THE OPINION THAT THE LD CIT(A) HAS RIGHTLY DELETED THE ADDITIONS MADE IN THIS REGA RD. 20. THE GROUNDS RAISED IN THE APPEALS ARE THUS REJE CTED. 21. IN RESULT APPEALS ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH NOVEMBER 2011. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 17TH NOVEMBER 2011 ITA . NOS.601 602/MUM/2007 1269/PN/2006 & ITA NO. 3889/MUM2005 M/S. P.C. SHAH & CO.ETC. A.YS. 2000-01 & 2001-02 PAGE OF 13 13 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT -II NASHIK 4. THE CIT(A)-II NASHIK 4. THE D.R. A BENCH PUNE 5. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE