Section 80IA deduction turns on ownership or eligible operation of the power plant, not mere maintenance contracting.

Entitlement to deduction under Section 80IA depends on the claimant being the eligible owner or operator of the power generating facility on a proper reading of the contract and surrounding facts. On the material examined, the assessee was treated as only a maintenance contractor performing work for a fee, while the plant belonged to the generating company. The agreement, shareholding pattern, accounts and related material showed that the assessee acted on behalf of the owner and did not own the plant. The reference to the Electricity Act definition of generating company did not assist the assessee, and the deduction was therefore not available.

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Issues: Whether the assessee was entitled to deduction under Section 80IA of the Income-tax Act, 1961 in respect of income claimed to be derived from the power plant, and whether the contractual arrangement showed that the assessee was the owner or operator of the generating facility.

Analysis: The assessee claimed deduction on the basis that it was engaged in establishing, operating and maintaining a power plant. The finding recorded by the authorities below was that the assessee was only a contractor performing maintenance work for a fee, while the power plant belonged to the generating company. The agreement, shareholding pattern, accounts and surrounding material were examined and it was concluded that the assessee did not own the plant and acted on behalf of the owner. The reliance placed on the definition of generating company under the Electricity Act, 2003 did not assist the assessee, since that description applied to the plant owner and not to the assessee.

Conclusion: The assessee was not entitled to deduction under Section 80IA, and the disallowance was upheld in favour of the Revenue.

Final Conclusion: The appeal failed on the merits, and the denial of the claimed tax deduction was sustained.

Ratio Decidendi: For deduction under Section 80IA, the claimant must be shown, on a proper construction of the contract and surrounding facts, to be the eligible operator or owner contemplated by the provision; a mere maintenance contractor acting for the plant owner is not entitled to the deduction.

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