Section 80IA deduction denied where contractor merely maintained the power plant and no perversity was shown in concurrent findings.

Deduction under Section 80IA was denied because the assessee was only a contractor performing maintenance for a fee and was neither the owner nor operator of the power plant; the activity therefore did not qualify as the specified undertaking intended to encourage investment in that sector. Interference under Section 260A was also declined because the Assessing Officer, first appellate authority and Tribunal had reached concurrent factual findings on the agreement, shareholding pattern and financial records, and no perversity was shown. The High Court upheld the denial of deduction and refused to reappreciate the evidence.

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Issues: (i) Whether the assessee was entitled to deduction under Section 80IA of the Income-tax Act, 1961 in respect of the power project activity; (ii) Whether the factual findings recorded by the lower authorities suffered from perversity so as to justify interference under Section 260A of the Income-tax Act, 1961.

Issue (i): Whether the assessee was entitled to deduction under Section 80IA of the Income-tax Act, 1961 in respect of the power project activity.

Analysis: The deduction was denied because the assessee was found not to be the owner or operator of the power plant, but only a contractor performing maintenance work for a fee. The agreement and surrounding records showed that the generating company owned the plant, while the assessee acted on its behalf. The authorities also found that the claimed deduction was inconsistent with the nature of the activity and would not serve the object of Section 80IA, which is to encourage investment in specified industries.

Conclusion: The assessee was not entitled to deduction under Section 80IA of the Income-tax Act, 1961.

Issue (ii): Whether the factual findings recorded by the lower authorities suffered from perversity so as to justify interference under Section 260A of the Income-tax Act, 1961.

Analysis: The Assessing Officer, the first appellate authority and the Tribunal had concurrently examined the agreement, shareholding pattern and financial records, and reached the same factual conclusion against the assessee. The High Court found that the interpretation of the agreement was legally sustainable and that no perversity was shown. In the absence of perversity, reappreciation of factual findings in appeal under Section 260A was unwarranted.

Conclusion: No perversity was established and interference under Section 260A of the Income-tax Act, 1961 was not warranted.

Final Conclusion: The substantive questions were answered against the assessee, and the denial of deduction was upheld on the basis of concurrent factual findings.

Ratio Decidendi: In an appeal under Section 260A of the Income-tax Act, 1961, concurrent findings of fact will not be disturbed unless perversity is shown, and a contractor who merely performs maintenance on behalf of the owner of a power plant is not entitled to deduction reserved for the qualifying undertaking under Section 80IA of the Income-tax Act, 1961.

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