AI Drafter 
TaxTMI 
TaxTMI 
2014 (10) TMI 1024
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....learned Commissioner of Income Tax (Appeal), ought to have appreciated the fact that the assessee is not a developer of new infrastructural facility but merely a contractor, who has no financial stake in the project and is paid periodically for the work executed by it as per the terms and conditions mentioned in the Tender document. iii. The Ld. ClT(A) ought to have appreciated the fact that the deduction u/s. 80IA(4) was meant to be provided to the developer of infra structural project who can develop such projects by mobilizing its own resources/funds. The Ld CIT has overlooked the above intention of the statute and has allowed the deduction u/s. 80IA( 4) to a contractor who had no financial stake and instead got periodical payments for the work done by it on contract basis granted to him by the local authority which is the real developer/owner of the project. iv. The Ld. CIT(A) had erred in relying upon the decisions of the ITAT, Mumbai in the case of M/s. Patel Engineering Ltd., and Oceans Sparkle Ltd without distinguishing the facts of the case of the assessee to that of the assessee's in the aforesaid cases. v. The appellant prays that the order....
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....bservation :- "We have considered rival contentions and found that the Tribunal has dismissed the assessee's appeal vide order dated 27-8-2010 by relying on the decision of Larger Third Member Bench in the case of B.T. Patil & Sons Belgaum Construction Private Ltd. (supra). This decision was subsequently recalled and was finally decided in favour of the assessee by relying on the decision of Hon'ble jurisdictional High Court in the case of CIT Vs. ABG Heavy Industries Ltd., 322 ITR 323. Thus, an apparent mistake has been crept in the order of Tribunal dated 27-10-2010,which is amenable to rectification u/s.254(2) of I.T. Act, 1961. Under exactly similar circumstance Tribunal had recalled its order in ITA No.4842/Mum/2006 vide order dated 11-4-2010, passed in MA No.472/Mum/2013. Respectfully following the decision of the Tribunal in MA No.472/Mum/2013, dated 11-4-2014, we recall the order passed by the Tribunal and direct the Registry to fix the appeal for hearing on merits. Registry is also directed to issue fresh notice to both the parties." 5. Similarly, the order passed by the Tribunal in ITA No. 679/Mum/2010 dated 27-10-2010 was also recalled by the Tribunal....
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....he assessment order for A.Y 2004-05 which is the base year for which the assessee is claiming that it is entitled to get deduction under section 80 IA(4). The first and foremost objection of the AO is that assessee, while executing the project, had acted in the capacity of a contractor, therefore, the deduction cannot be allowed to the assessee as prerequisite of the section to enable the assessee to claim deduction is that he should be a developer. 10.1 The second contention of AO is that assessee has only built some part of the project and it has neither operated or maintained the infrastructure project which is also a condition precedent to grant deduction under section 80 IA(4). The AO has rejected the contention of the assessee that its case is squarely covered by decision of ITAT in the case of Patel Engineering Ltd. (supra). As against such case of the AO Ld. CIT(A) has followed mainly the decision of ITAT in the case of Patel Engineering Ltd. (supra) and has allowed relief to the assessee. We have to examine that whether or not assessee is entitled to get deduction under section 80 IA(4) in the light of aforementioned objection of the AO and plea of the assessee. I....
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.... installation of the cranes but involved a continuous obligation from the supply of the cranes to the installation, testing, commissioning, operation and maintenance of cranes for a term of 10 years, after which the cranes were to vest in JNPT free of cost. The assessee did not have to develop the entire port in order to qualify for deduction under section 80 IA(4). Parliament did not legislate a condition impossible of compliance. 10.3 If the facts of the present case are to be examined in the light of aforementioned decision of Hon'ble Bombay High Court, then it can be said that for claiming deduction under section 80 IA(4), it is not necessary for the assessee to develop the entire project in order to qualify for a deduction under section 80 IA(4). If the provisions are so construed then it will be a condition impossible of compliance because of the magnitude of the entire project. For qualifying deduction under section 80 IA(4) what would be necessary will be that the work carried on by the assessee must be an integral part of the project and if it is so, then it cannot be said that assessee is not eligible for deduction under section 80 IA(4) for the reason that the a....
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....eld to have developed the facility it cannot be regarded as operating the facility. Their Lordships have referred to such contention of Revenue in para-19 of the decision and they observed that it is not possible to accept such submissions. Their Lordships have observed that it has already been noted that assessee had as a matter of fact developed the facility. Their Lordships after considering the provisions and various circulars of CBDT and also the judicial pronouncements have concluded in para-22 of the decision that after section 80IA was amended by Finance Act, 2001, the section applies to an enterprise carrying on the business of (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining any infrastructure facility which fulfills certain conditions. For the sake of completeness para-22 & 23 of the decision is reproduced below: "22. Another submission which was urged on behalf of the revenue is that under clause (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 1-4-1995. The same requirement is embodied in....
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....uld be governed, by the same principle. The subsequent amendment of section 80-IA(4A) of the Act to clarify that the provision would apply to an enterprise engaged in (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining an infrastructure facility was reflective of a position which was always construed to hold the field. Before the amendment that was brought about by Parliament by the Finance Act of 2001, we have already noted that the consistent line of circulars of the Board postulated the same position. The amendment made by Parliament to section 80-IA(4) of the Act set the matter beyond any controversy by stipulating that the three conditions for development, operation and maintenance were not intended to be cumulative in nature". 10.6 According to aforementioned observations of their Lordships, pre or post amendment the requirement of section 80 IA(4) is that deduction will be available an enterprise engaged in (i) developing; or (ii) operating and maintaining or (iii) developing, operating and maintaining the infrastructure facility and such position was to be always construe to hold the field. Therefore, only development o....
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.... Construction Pvt. Ltd.(supra). The said order of the Tribunal was recalled only for the reason that the Larger Bench decision in the case of M/s. B.T.Patel & Sons Belgaum Construction Pvt. Ltd.(supra) was no more good law in view of subsequent decision of Hon'ble Bombay High Court in the case of CIT vs. ABG Heavy Industries (supra). The order in the case of present assessee was not recalled for the reason that there is any difference in the facts and circumstances of the present case and the decision in the case of B.T.Patel & Sons Belgaun Construction Pvt. Ltd.(supra). Now the decision of Larger Bench is no more good law and the Division Bench of the Tribunal in the case of B.T.Patel & Sons Belgaun Construction Pvt. Ltd.(supra) has decided this issue in favour of the assessee following the decision of Hon'ble Bombay High Court in the case of ABG Heavy Industries Ltd. (supra). Para -4 of the said order is reproduced below: "14. In this background, the assessee could certainly claim the deductions under the provision of Section 80 IA. One has to see the substance and not the Form Essentially, though it was a Joint Venture, it was converted into assessee's venture. The Othe....