TaxTMI 
TaxTMI 
2019 (4) TMI 683
X X X X Extracts X X X X
X X X X Extracts X X X X
....as entitled to deduction under Section 80IA even though the conditions specified thereunder are not satisfied? 2. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in holding that infrastructure facility was eligible for deduction under Section 80IA even though the assessee was only a transport contractor to augment the power generation and was only like any other building contractor/labour contractor not eligible for such deduction? 3. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in holding that the proviso to sub section 4 of section 80IA would hold good when there was no transfer of infrastructure facility?" "T.C. (A) No.1266 of 2009: 1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing the deduction under Section 80IA of the Act, even though the assessee does not satisfy the proviso to Sub-section 4 of Section 80IA of the Act? 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in allowing the deduction under section 80IA of the Act, without considering the exp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....taking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park or develops a special economic zone referred to in clause (iii) of sub-section (4) or generates power or commences transmission or distribution of power or undertakes substantial renovation and modernisation of the existing transmission or distribution lines. Provided that where the assessee develops or operates and maintains or develops, operates and maintains any infrastructure facility referred to in clause (a) or clause (b) or clause (c) of the Explanation to clause (i) of subsection (4), the provisions of this sub-section shall have effect as if for the words "fifteen years", the words "twenty years" had been substituted." 3. The learned counsel for the Revenue, Mr.T.R.Senthilkumar, urged before us that since the Assessee was only a sub-contractor and since it was not the Assessee, who itself had entered into a contract with the specified authority viz., Central Government or State Government or Local Authority as envisaged under Section 80IA(4) of the Act, the Assessee will not be entitled to the benefit of deducti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etc. notwithstanding the fact that the Railways has recognised the assessee as a contractor. Impliedly the Department has accepted the fact that the assessee has provided "Infrastructure facility" to the specified authority. The only doubt in the mind of the Department was that there was no existence of direct contract between the assessee and the Railways. The Department proceeded further to conclude that there was no contract as envisaged under sec.80IA. As rightly pointed out by the ld. Counsel for the assessee, the proviso was never attempted to be deliberated upon whereas the assessee relies only on the proviso to claim the relief u/s 80IA as if no transfer had taken place. To maintain a rail system and operating and maintaining such infrastructure facility as defined and the original ST-CMS agreement will hold good in view of the proviso to sec.80IA(4). This proviso has to be read along with CBDT Circular No.779 dated 14.09.1999 cited supra, clearly brings the assessee as one entitled to claim deduction u/s 80IA of the Act particularly in view of proviso to sub-sec.(4). The assessee performed the contract according to the terms agreed upon is not in dispute. Once we are s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dy for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility; (c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995: Provided that where an infrastructure facility is transferred on or after the 1st day of April, 1999 by an enterprise which developed such infrastructure facility (hereafter referred to in this section as the transferor enterprise) to another enterprise (hereafter in this section referred to as the transferee enterprise) for the purpose of operating and maintaining the infrastructure facility on its behalf in accordance with the agreement with the Central Government, State Government, local authority or statutory body, the provisions of this section shall apply to the transferee enterprise as if it were the enterprise to which this clause applies and the deduction from profits and gains would be available to such transferee enterprise for the unexpired period during which the transferor enterprise would have been entitled to the deduction, if the transfer had not taken place. Provided further that nothing contained in this ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9. The learned Tribunal, however, in our opinion, rightly applied the Proviso to Section 80IA(4) of the Act and held that since the Assessee was recognised as contractor for these railway sidings, which undoubtedly fell under the definition of "infrastructure facility", it was entitled to the said benefit under Section 80IA of the Act. The grounds on which the Assessing Authority denied the said benefit to the Asessee ignoring the effect of Provisos to Section 80IA(4), therefore, could not be sustained. The learned Tribunal, in our opinion, has rightly held that the Proviso does not require that there should be a direct agreement between the transferee enterprise and the specified authority for availing the benefit under Section 80IA of the Act. There is no dispute before us that the Assessee was duly recognised as transferee or assignee of the principal contractor M/s.ST-CMS Company Private Limited and was duly so recognised by the Railways to operate and maintain the said railway sidings at Vadalur and Uthangalmangalam Railway Stations. The findings of fact with regard to the said position recorded by the learned Tribunal are, therefore, unassailable and that clearly attracted th....