TaxTMI 
TaxTMI 
2015 (8) TMI 1446
X X X X Extracts X X X X
X X X X Extracts X X X X
....ered u/s 80IA(4). 2. Facts in brief as mentioned in the impugned order passed under section 263 of I.T. Act were that the assessee is engaged in the business of developing the electrical distribution infrastructure facility. The learned Commissioner has mentioned that the assessee has acted as a contractor. According to the learned Commissioner the assessee has installed high tension/low tension electric lines and transformers at the instances of the contractee. According to the learned CIT, the Assessing Officer has granted deduction under section 80IA of the I.T. Act of Rs. 92,01,893/- vide an assessment order under section 143(3) dated 30th Dec., 2010 . The objection of the learned CIT was that the assessee in the capacity of a 'Contractor" engaged in the work of laying down of net work of transmission and distribution lines for MSEDCL. Since the assessee had worked as a c"ontractor", therefore, not entitled for the deduction under section 80IA(4) read with Explanation inserted with effect from 01-04-2000. An observation was made that the impugned assessment order has not appreciated the correct position of law, hence the said order was prejudicial to the interest of the Revenu....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Moreover, in a similar case to that of the assessee - decision in the case of OM Metal Infra Project (P) Ltd. v/s. CIT-I, - revision u/s 263 was overruled by ITAT Jaipur Bench A. It is therefore, the claim that the A.O. had passed the assessment order after considering all material on record and application of mind; such order being neither erroneous nor prejudicial to the interest of revenue should not be revised in a proceeding u/s 263. 4. The first objection of the learned Commissioner was that as per the agreement with Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) the assessee has signed the agreement as a "Contractor". As per the terms of the agreement the assessee was required to carry out erection and construction etc. against the payment mentioned in the contract agreement. The material was required to be used as approved by MSEDCL and the construction was to be carried out as per the standard method approved by MSEDCL. There was a provision for a monthly running bill to release atleast 90% of the billing amount towards material, erection and commission of the project. There was one more clause that atleast 10% of the bill value would be retained....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the Third Member of the Tribunal was no longer a good law; (Refer para 10 of the said order of the Tribunal). After an elaborate discussion it was decided that the deduction under section 80IA(4) was to be allowed. Learned A.R. has also mentioned that even in the case of Laxmi Civil Engineering P. Ltd. (ITA No.766/PN/09, 254/PN/08, 431/PN/07 for A.Y. 2003-04 to 2006-07 order dated 8/6/2011) the facts and circumstances of B.T. Patil & Sons 126 TTJ 507 have been discussed by respected ITAT, Pune and the claim of the assessee was allowed. 6. From the side of the Revenue, learned D.R. Mr. Narendra Kane appeared and supported the action of learned Commissioner. His main argument is that the assessee has been working as a "Contractor", therefore, not entitled for the deduction under section 80IA(4) of I.T. Act. 7. We have heard both the sides at some length and carefully perused the orders of the Revenue authorities in the light of a short compilation filed before us. In the compilation learned A.R. has furnished the written submissions filed before the authorities below and two orders of the Pune Tribunal in support of the contentions. However, at the outset we have found that in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d u/s 80-IA(4)(iv)(b). As interest on Fix Deposit is an income related to the undertaking work which is exempted u/s 80IA(4)(iv)(b) it is to be allowed as exempted income under said section. Besides the assessee has received discount at Rs. 33,031/- which is received on the raw material purchase effected for use in execution of exempted work u/s 80-IA(4)(iv)(b). As discount is on raw material purchase related with the work exempted u/s 80IA(4)(iv)(b) this is also to be exempted under said section." 5. The submission of the assessee has been duly considered. Though the assessee has justified the need of keeping money in FDRs, he has failed to substantiate as to how and why the income arising out of the deployment of above funds, can be considered as 'derived from' or is arising out of the activities eligible for deduction u/s 80IA of the Act. In the judgment of the Mumbai and other High Courts as well as Hon'ble Supreme Court, it has been clearly held that other income, in the nature of interest as deposits for electricity, margin money for LC/Bank Guarantee, insurance claim, income on sale of scrape, by product of such unit etc. is not eligible for deduction u/s 80IA/80IB of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Patil and Sons Belgaon P. Ltd. (ITA No. 1408 & 1409/PN/2003) assessment year 2000-01 and 2001-02 order dated 28-02-2013 that while passing the order under section 255(4) of I.T. Act to give effect of the Third Member decision it was held that the issue of 80IA(4) was sub-judice before the Hon'ble Bombay High Court and an order was meanwhile pronounced by the Hon'ble Court in the case of ABG Heavy Industries Ltd. (supra). Due to that reason, the said order of larger bench was recalled. The ITAT, Pune has finally concluded that the law as interpreted by the Third Member was no longer a good law. After considering few other decisions, namely, Ayush Ajay Constructions 79 ITD 213 and following the decision of Hon'ble Bombay High Court it was finally concluded that the said assessee was entitled for the claim of deduction under the provisions of section 80IA. 8.1 Because of the reason that B.T. Patil and Son's case which was heavily relied upon by the learned Commissioner was held as no more a good law and that order was subsequently merged with the order of ITAT, Pune dated 28-02-2013 as discussed above, therefore, one of the basis for which the learned Commissioner exercised r....