आयकर अपीलीय अधिकरण ए न्यायपीठ पुणे में ।

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IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं / ITA No.979/PUN/2024 .

धििाारण वर्ा / Assessment Year : 2018-19 Assistant Commissioner Mahalaxmi Infra Projects Pvt. Ltd., of Income Tax, Kolhapur S-1(B), Malati Towers 223/3 E-Ward, Vs. Tarabai Park NA Kolhapur-416003 PAN : AADCM2170P अपीलार्थी Appellant प्रत्यर्थी / Respondent /

Assessee by : Shri Nikhil S. Pathak Department by : Shri Ramnath P. Murkunde Date of hearing : 28-10-2024 Date of 15-01-2025 Pronouncement : आदेश / ORDER PER ASTHA CHANDRA, JM :

The appeal filed by the Revenue is directed against the order dated

13.03.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2018-19.

2. Briefly stated, the facts of the case are that the assessee is a company engaged in the business of infrastructure construction i.e. construction of dams, roads, power house, Tunnels, electrical transmission lines subsection, switch yards, power generator and distribution and allied work bridges and lift irrigation projects etc. It e-filed its return of income on 26.09.2018 declaring total income of Rs.35,62,35,760/-. The Ld. Assessing Officer (“AO”) completed the assessment u/s 143(3) r.w.s. 143(3A) and 143(3B) of the Income Tax Act, 1961 (the “Act”) on 16.03.2021 determining total income of the assessee at Rs.46,94,97,181/- wherein he made the following additions/disallowances : (i) disallowance out of deduction claimed u/s 80IA(4) amounting to Rs.10,29,58,075/-; (ii) disallowance on helicopter expenses of Rs.47,77,646/-; (iii) disallowance u/s 14A r.w. Rule 8D of the Income Tax Rules, 1962 (“IT Rules”) of Rs.22,83,215/- and (iv) disallowance on account of depreciation on luxury cars of Rs.32,42,484/-.

3. In appeal, the Ld. CIT(A) gave full relief to the assessee in respect of the above additions/disallowances made by the Ld. AO on account of deduction claimed u/s 80IA(4), disallowance u/s 14A r.w. Rule 8Dand depreciation on luxury car. Aggrieved with such order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal raising the following grounds of appeal :

“a) On the facts and in the circumstances of the case and in law, the Ld.

CIT(A) has erred in deleting the addition of Rs.22,83,215/- made by the Assessing Officer u/s. 14A of the L.T. Act, 1961.

c) On the facts and in the circumstances of the case and in law, the Ld.CIT (A) has erred in deleting the disallowance of depreciation on luxury car of Rs.32,42,484/- ignoring the fact that the Assessee could not furnish necessary evidence to show that the luxury car were used wholly for business purpose to rule out personal use by directors of the company.

Grounds of Appeal subject to consent of the Assessee for deferment (a) Whether, the assessee fulfills the requirement stipulated in Section

80-IA(4) of the Income Tax Act, 1961 once the conclusion reached is that it is a contractor and not a developer as stated in the sub-

section?

(b) Whether on the facts and in the circumstances of the case, the ld.CIT(A) has erred in allowing deduction u/s 80IA(4) of the IT Act, 1961 to the assessee ignoring the fact that the assessee being a contractor, is not eligible for such deduction as pr Explanation 2 to Section 801A?”

4. Ground No. 1 relates to deletion of addition of Rs.10,29,58,075/-

made by the Ld. AO u/s 14 of the Act r.w. Rule 8D of the IT Rules.

4.1 The facts pertaining to this ground are that during the course of assessment proceedings, the Ld. AO noted that the assessee has made investments in shares and mutual funds to the tune of Rs.65,09,34,047/- and earned dividend income of Rs.1,31,21,894/- which is exempt in nature. Accordingly, he asked the assessee to submit the details regarding investments made for earning exempt income and also computation as per Rule 8D of the IT Rules r.w.s. 14A of the Act. In response thereto, the assessee submitted tha