TaxTMI 
TaxTMI 
2019 (9) TMI 375
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....ctor with PWD Govt. of Maharashtra & Karnataka. In this case, the JCIT, Range-2, Kolhapur issued directions to the Assessing Officer u/s.144A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') directing him to examine the allowability of claim u/s.80IA of the Act to the assessee as he was a contractor and therefore, prima facie he was not eligible for any deduction under that section. The Assessing Officer then incompliance with the directions u/s.144A of the Act took up the assessment proceedings and called for various details. The Assessing Officer noted that the assessee has executed various contracts taken from Zilla Panchayat and Gram Panchayat, Engineering Department in Karnataka State at Beniwad, Belgavi, Bagalkot and Kogonoli etc. Most of the contracts are fixed price contracts. The Assessing Officer discussed and analyzed the explanations to Section 80IA(4) introduced in 2007 and 2009 w.r.f. 01.04.2000 and held that the assessee is a works contractor and therefore not eligible to claim deduction u/s.80IA of the Act. The Assessing Officer was of the view that the deduction u/s.80IA is allowable only to developers of infrastructural projects and not to contra....
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....iii) of sub-section (4A) of Section 80-IA, one of the conditions imposed was that the enterprise must start operating and maintaining the infrastructure facility on or after 1st April, 1995. The same requirement is embodied in sub-clause (1) of sub-clause (4) of the amended provisions. It was urged that since the assessee was not operating and maintaining the facility, he did not fulfill the condition. The submission is fallacious both in fact and in law. That the assessee was maintaining the facility is not in dispute. The facility was commenced after 1st April 1995. Therefore, the requirement was met in fact. Moreover as a matter of law, what the condition essentially means is that the infrastructure facility should have been operational after 1st APril,1995. After Section 80-IA was amended by the Finance Act;, 2001, the section applies to an enterprise carrying on the business of (1) developing; or (ii) operating and maintaining ; or (iii) developing, operating and maintaining any infrastructure facility which fulfills certain conditions. Those conditions are (1) ownership of the enterprises by a company registered in India or by a consortiums; (ii) an agreement with the centr....
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....he said condition shall amount to absurdity and therefore uncalled for. Therefore, we find requirement of harmonious reading of sub- clauses (c) vis-a-vis of clause (i) of section 80IA( 4) of the Act. Thus, the discussion in High Court's decision in paragraph-22 extracted above, is directly applicable to the facts of the case and eventually is entitled for the deduction under section 80IA(4) of the Act. Accordingly, the modified ground, which is common in all the four appeals, is allowed in favour of the assessee. 7. In the result, all four appeals of the assessee are allowed." 5. The Ld. CIT(Appeals) after considering the written submissions of the assessee and assessment order held as follows: "5. DECISION: I have carefully considered the matter and perused all material on record. During the course of the appeal hearing, the AR did not press ground 2 and the same is therefore dismissed as not pressed. The 3rd ground is against levy of interest u/s.234B. Levy of interest is mandatory and consequential and the AO is therefore directed to rework the interest if any leviable after giving effect to my directions in this order. The only effective ground of appeal is against ....
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....ng Machinery providing laying pipe line 60,54,161/- 8. SARJAPUR Laxmi Civil Engg. Services P. L. Kolhapur in respect of work of Executive Engineer, P.R.E Division, Gadag Construction of Jackwell, Treatment Plant, Tanks, providing and Erection of pumping Machinery providing laying pipe line 3,62,04,111/- 9. BENWAD Laxmi Civil Engg. Services P. L. Kolhapur in respect of work of Executive Engineer, P.R.E Division, Gadag Construction of Jackwell, Treatment Plant, Tanks, providing and Erection of pumping Machinery providing laying pipe line 67,50,732/- 10. KOKATNUR Executive Engineer, P.R.E Division, Chokidi Construction of Jackwell, Treatment Plant, Tanks, 10,20,52,862/- providing and Erection of pumping Machinery providing laying pipe line 11. HALINGALI Executive Engineer, P.R.E Division, Bagalkot Construction of Jackwell, Treatment Plant, Tanks, providing and Erection of pumping Machinery providing laying pipe line 84,84,002/- 12. JAKNUR Executive Engineer, P.R.E Division, Bagalkot Construction of Jackwell, Treatment Plant, Tanks, providing and Erection of pumping Machinery providing laying pipe line ....
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....t with Laxmi Civil Engineering Services Private Limited which in turn. has entered into agreement with Executive Engineer, P.R.E. Division, Gadag (for Sarjapur) and Executive Engineer, P.R.E. Division, Chikodi (for Bendwad). As such the assesee is entitled for the deduction under Section. 80-IA of the Act. Without prejudice to anything, if your honour decided to disallows the claim of assessee u/s. 80-IA(4) of the income Tax Act 1961, in respect of these works, the profit earned from these works is calculated as under: (Amounts in Rs.) Particulars Sarjapur Bendwad * Sales ( Contract Receipts) * Expenses as per Schedule * Profit (1-2) 3,62,04,111.00 3,06,81,704.00 55,22,407.00 67,50,732.00 57,20,959.00 10,29,773.00 However, this profit is subject to the proportionate allocation of Office and Administration, Finance and Depreciation Expenses. I therefore hold that profits of Rs. 55,22,407 from Sarjapur Project and Rs. 10,29,773 from the Bendwad Project totaling to Rs. 65,52,180/- are not eligible for a deduction u/s.80IA(4). However, I also find that almost the entire PBT in the P & L A/c of Rs. 2,27,85,04....