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of <h1>Assessee denied deduction under due to retrospective amendment, overturning CIT(A) decision.</h1> The Tribunal held that the assessee, functioning as a works contractor, was not entitled to the deduction under section 80-IA(4) of the Income Tax Act due ... - Issues Involved:1. Eligibility for deduction u/s 80-IA(4) of the Income Tax Act, 1961.2. Interpretation of the term 'developer' versus 'works contractor.'3. Retrospective effect of Explanation to sub-section (13) of Section 80-IA.Summary:1. Eligibility for deduction u/s 80-IA(4) of the Income Tax Act, 1961:The assessee company, engaged in infrastructure construction, claimed a deduction u/s 80-IA(4) for developing a water treatment plant. The Assessing Officer disallowed the deduction, arguing that the assessee was merely executing a works contract for the Chennai Metro Water Supply & Sewerage Board (CMWSSB) and not developing the infrastructure facility.2. Interpretation of the term 'developer' versus 'works contractor':The CIT(Appeals) reversed the Assessing Officer's decision, stating that the assessee fulfilled all conditions u/s 80-IA(4) and was eligible for the deduction. The CIT(A) relied on the Tribunal's decision in Patel Engineering Ltd., which held that a contractor could also be considered a developer if they developed infrastructure facilities as per an agreement with a government body.3. Retrospective effect of Explanation to sub-section (13) of Section 80-IA:The Tribunal noted that the Finance (No.2) Act, 2009 added an Explanation to sub-section (13) of Section 80-IA with retrospective effect from 1-04-2000, clarifying that works contractors are not eligible for the deduction u/s 80-IA(4). The Tribunal referenced the case of The Indian Hume Pipe Co. Ltd., which upheld this Explanation, thereby denying the deduction to works contractors.Conclusion:The Tribunal concluded that the assessee, being a works contractor, was not eligible for the deduction u/s 80-IA(4) as per the retrospective Explanation to sub-section (13) of Section 80-IA. The CIT(A)'s reliance on Patel Engineering Ltd. was deemed incorrect due to the subsequent legislative amendment. The appeal filed by the Revenue was allowed, restoring the Assessing Officer's order.Order:The appeal filed by the Revenue is allowed. Order pronounced on Friday, the 28th of September, 2012, at Chennai.
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