2018 (11) TMI 1423

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.... in both the appeals. For the sake of brevity and convenience, grounds of appeal for AY 2013-14 only are reproduced hereunder: "1. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in holding that all the projects being carried out by the assessee are infrastructural project and not work contracts and hence the assessee is eligible for deduction u/s.80IA ? 2. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in a holding that the provisions of deduction u/s.80IA(4) is applicable to constituent of the JV without appreciating that the assessee has not entered into an agreement with the Central Government or a State Government or a Local Authority or any ot....

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....lant craves leave to amend or alter any ground or add any other grounds which may be necessary." 3. Brief facts of the case are that the assessee company undertook the works of a) Excavation of HNSS main canal including CM & CD works; b) Construction of single line BG tunnel including both approaches in between new Haflong - Harangajao station; c) Construction of single line BG tunnel in between Jiribam to Imphal in connection with construction of new railway project; and d) Dr. B.R. Ambedkar - Pranahita Chevela Sujala Sravanthi; Excavation of gravity canal including information of embankments. In its return of income, assessee claimed deduction u/s 80-IA(4) with regard to income from these projects. AO disallowed the same holding that t....

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....ellant and the observations of the AO in assessment order. The CIT(A)-3, Hyderabad, while deciding the case of the assessee for Assessment Year 2012-13, vide order dated 17.04.2015, discussed in detail the various projects carried out by the appellant, as well as various judicial decisions on the issue. The relevant portion of CIT(A)-3's order is reproduced as under: "5.3 In the course of the appellate proceedings, the AR submitted that the appellant's claim of deduction had been upheld by the !TAT in its order for AY 2008-09 with regard to the construction of HNSS Main Canal KM 20 to KM 42. 5.4 With regard to the other projects, the AR submitted that these works of development of infrastructure facility had been u....

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....t the nature of the work was similar- to the EPC Turn Key System of HNSS Main Canal (where deduction u/s 80lA had been allowed by the ITAT). 5.7 The AR also submitted copies of extracts of the agreements executed with regard to these works. 5.8 I have considered the facts on record and the submissions of the AR. With regard to HNSS Main Canal KM 20 to KM 42, the appellant's claim of deduction u/s 80lA(4) was held allowable by the ITAT in its order in ITA No.414/Hyd/2012, dtd.17.06.2013 in the appellant's own case for AY 2008-09. Respectfully following the decision of the ITAT, the Assessing Officer is directed to allow deduction u/s 80IA(4) for this project. 5.9 One of the reasons for disallowance of the d....

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....Tribunal further held that the consortium or the JV was only a paper company and did not execute any work and that accordingly, the works awarded to the JV was executed by its constituents and therefore deduction should be available to the constituents. 5.11. The facts in the appellant's case are identical. The work was allotted to a joint venture of which the appellant was a constituent. The work admittedly was executed entirely by the appellant and not by the other constituents of the joint venture or even by the joint venture in its own capacity. The fact that the appellant was merely a constituent of the joint venture to which the work had been entrusted cannot, therefore, be a reason for rejection of the claim of deduction....

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.... by the appellant apart from providing the performance guarantee and that consequently, the entire risk in the process of undertaking the project was that of the appellant. These are the factors that had weighed with the ITAT in holding that the appellant was a developer and not a works contractor with regard to HNSS Main Canal KM 20 to KM 42 in its order for AY 2008-09. Following the ratio of the ITAT's decision, it is held that the other three projects were also eligible for deduction u/s 80IA(4). 5.14. In view of the above, the Assessing Officer is directed to allow the appellant's claim of deduction u/s.80IA( 4) for all the four projects". 7.1 As the projects being carried out during the year under consideratio....