Iapl/140/2010 Of The Commissioner Of Income Tax And Another v. M/S Eldeco Construction P Ltd

Court No. - 35 Case :- INCOME TAX APPEAL No. - 140 of 2010 Appellant :- The Commissioner Of Income Tax And AnotherRespondent :- M/S Eldeco Construction (P) Ltd.Counsel for Appellant :- S.S.C. I.T.,Praveen KumarCounsel for Respondent :- P.C. Jain,Ashish Bansal Hon'ble Bharati Sapru,J.Hon'ble Neeraj Tiwari,J. Heard Shri Praveen Kumar, learned counsel for the department and Shri Ashish Bansal, learned counsel forthe assessee. This appeal under Section 260-A of the Income Tax Act, 1961(hereinafter referred to as the 'Act') has been filed bythe department against the order of the Income TaxAppellate Tribunal dated 10.09.2009 for the assessmentyear 2004-05. The questions of law sought to be answeredare as hereunder: "1. Whether on the facts and in the circumstances of the case the ITAT was legallycorrect in confirming the findings of the learned CIT(A) for deleting the addition ofRs.12,00,000/- irrespective of the fact that the expenses under the head 'liaisonfee'remain unsubstantiated on the face of the material brought on record, hence liableto be disallowed in view of the provision of section 37(1) of the IT Act, 1961. 2. Whether the Hon'ble ITAT was legally correct in adopting the claim of the assesseeon account of deducting u/s 80IB (10) of IT Act ignoring the legal position that theassesse does not satisfy the conditions prescribed in the said section for qualifying forthis deduction especially after the retrospective amendment made in the said section inUnion Budget 2009-10. 3. Whether execution of a civil contract in a housing project being developed by anyother legal entity can be equated with the development and building of housing andsuch civil contractor can be termed as developer and builder of housing project?" The question nos.2 and 3 are covered by a decision of thisCourt in Income Tax Appeal No.125 of 2010 passed todayitself. Insofar as the question no.3 is concerned the facts are that for the year under consideration the assessee's Company paid a sum of Rs.12 lacs to Smt. Asha Peterson, who wasthe Director of the Company. The doubt raised by theAssessing Officer was that no details and evidence wasgiven with regard to the work done by her. However, upon examination of the entire record and the CIT's order as well as the Tribunal's order, it appears thatshe was doing the work of promotion for selling flats andfor this purpose she had been paid. The amount paid to herwas named as 'liaisoning fee'. The only reason for disallowance was that in the previousyear they have not made any such claim. However, eachyear stands on its own footing and showed the expenditureand income. The amount which was earned by theDirector Asha Peterson was disclosed and declared by herin her income tax return and was paid tax on it. The Tribunal also recorded a finding of fact that the business of the assessee was of selling flats and flats hadbeen booked in that year and had been sold and herservices had been used for selling of those flats. In view of the finding of the fact recorded by the Tribunalit cannot be said that any part of provision of Section37(1) of the Act were contravened. We, therefore, upheldthe finding and reasoning adopted by the Tribunal. The question no.1 is, therefore, answered in favour of the assessee and against the department. The appeal is accordingly dismissed. Order Date :- 5.3.2018 pks