Tribunal directs AO to allow deduction under section 80IA, recalculates interest under section 234B.

The appeal was allowed, and the Tribunal directed the AO to allow the deduction under section 80IA to the assessee. The interest under section 234B was to be recalculated based on the revised assessment. The Tribunal's order was pronounced in the open court on 25th June 2014.

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Issues Involved:
1. Disallowance of deduction under section 80IA.
2. Entitlement to claim deduction for infrastructure facilities under section 80IA.
3. Levy of interest under section 234B.
4. Condonation of delay in filing the appeal.

Detailed Analysis:

Condonation of Delay:
The appeal was time-barred by 144 days. The assessee filed an application for condonation of delay supported by an affidavit from the Managing Director. The delay was attributed to errors in the initial order, necessitating a rectification application. The rectified order was received on 7th September 2011, and the appeal was filed on 3rd November 2011, within two months. The Tribunal found sufficient cause for the delay and, exercising its power under section 253(5) of the Act, condoned the delay and admitted the appeal.

Disallowance of Deduction under Section 80IA:
The primary issue was the disallowance of the assessee's claim for deduction under section 80IA amounting to Rs. 1,00,47,579. The Tribunal referred to its decision in the assessee's own case for the assessment year 2007-08, where it was held that the assessee was entitled to the deduction under section 80IA(4). The Tribunal reiterated that the assessee, while executing the project, acted as a developer and not merely as a contractor. The AO's contention that the assessee did not operate or maintain the infrastructure project was rejected based on the precedent set by the Hon'ble Bombay High Court in the case of ABG Heavy Industries Ltd. The Tribunal concluded that developing an integral part of the project suffices for claiming the deduction under section 80IA(4).

Entitlement to Deduction for Infrastructure Facilities:
The Tribunal examined the nature of the work carried out by the assessee, which included manufacturing, supplying, and commissioning infrastructure facilities. It was clarified that the assessee's activities were integral to the project, and thus, the deduction under section 80IA(4) was justified. The Tribunal emphasized that the requirement to develop, operate, and maintain the entire project was not necessary for claiming the deduction. The Tribunal relied on the decision of the Hon'ble Bombay High Court, which held that even partial development of an infrastructure facility qualifies for the deduction.

Levy of Interest under Section 234B:
The issue of interest levied under section 234B was deemed consequential. The Tribunal directed the AO to recalculate the interest after giving effect to the order allowing the deduction under section 80IA. This ground was allowed for statistical purposes.

Conclusion:
The appeal was allowed, and the Tribunal directed the AO to allow the deduction under section 80IA to the assessee. The interest under section 234B was to be recalculated based on the revised assessment. The Tribunal's order was pronounced in the open court on 25th June 2014.

Order Pronounced:
The order was pronounced in the open court on 25th June 2014.

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