TaxTMI 
TaxTMI 
2021 (3) TMI 428
X X X X Extracts X X X X
X X X X Extracts X X X X
....es for deduction u/s 80IA(4) of the Act. However the AO disagreed with the explanation adduced by the assessee and according to AO in view of the explanation inserted below Section 80IA(13) with retrospective effect from 01.04.2008 has over-riding influence and debars the assessee's claim, because, the assessee's claim of deduction u/s 80IA(4) are in relation to business in the nature of works contract. And thereafter he referred to the explanation to Sub-section (13) to Sec. 80IA which reads as under: "For the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works contract awarded by any person (including the Central or State Government) and executed by the undertaking or enterprise referred to in sub-section (1)." Thus according to AO since the assessee has been executing the business of civil construction in the nature of works contract awarded by the State Government / Central Government, the assessee is not entitled to claim deduction u/s 80IA of Rs. 27,31,67,167/- which is in respect under-takings which earns profit on developing from inf....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the same, we note the following duties and responsibilities of the assessee is as under:- Electricity, Water and gas - The assessee shall be responsible for making his own arrangements at his own cost to obtain supply of water, electricity and/or gas for the works. Sheds, stores, yards - It shall be the responsibility of the Contractor-assessee to provide at his own expense the required sheds, store houses, and yards for both permanent and temporary works and provide free access to the engineer and the engineer's representative who will have right of inspection including that of instructing the Contractor to remove a particular material from the stores and not to use the same on the Works. Temporary Works - All temporary works necessary for the proper execution of the Works shall be provided and maintained by the Contractor-assessee at his cost and subject to the consent of the Engineer. The same shall be removed by the Contractor-assessee at his own expense when they are no longer required and in such manner as the Engineer shall direct. In case the Contractor assessee fails to remove the temporary works on completion, the Engineer is authorized to get the same removed an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the completion of the works. Testing - The Contractor-assessee shall provide all documents and other information necessary for all types of testing and such assistance, labour, materials, electricity, fuel, stores, apparatus and instruments as are necessary to carry out such tests efficiently. 7. From the aforesaid activities undertaken by the assessee we note that the contractor assessee's activities involves substantial risk. It is noted that like any other entrepreneur' who employs his material, plant, machinery, labour etc. in a project and undertakes risk, the assessee was also exposed to substantial amount of risk by virtue of engaging his establishment in the infrastructure projects. In addition, the assessee was exposed to further risk of non-completion of work within time, or of any damage caused to the works site, etc., or increase in prices of materials, labour etc. beyond what the Government had agreed to compensate as per the agreements. Thus, we are of the opinion that it is not a case where the assessee is a works contract simplicitor, where the Government authority has provided the assessee with the entire set up i.e. plant & machinery, materials and the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be noted here that although the above-said decision relates to the claim of deduction under section 80IB(10) of the Act, yet, the ratio upheld in the above-said case that where assessee has been awarded contracts as turnkey projects and has been entrusted with the full responsibility of execution and completion of work for .which the assessee has to undertake huge risks in terms of deployment of technical personnel, plant and machinery, technical knowhow, expertise and financial resources it can be said that the assessee is engaged in development of infrastructure facility, fully applies in the case of the assessee. 9. In the instant case, as will be evident from the perusal of the agreements, as enclosed in the Paper book and relevant portions of which are discussed as above, all the agreements under consideration are not for a specific work, they are for development of facility as a whole. Therefore, merely because in the agreement for development of infrastructure facility, assessee is referred to as contractor or because some basic specifications are laid down, it does not detract the assessee from the position of being a developer, nor will it debar the assessee from claimi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for deduction was allowed which is found placed at 1 to 16 of PB. Similarly in respect of assessee's own case for AY 2008-09 for deduction u/s 80IA has been allowed which is placed at page 17-44 of PB; and in assessee's own case for AY 2011-12 and AY 2012-13 deduction was partly allowed i.e. the Tribunal allowed the assessee's claim in respect of NHAI & Indore Municipal Corporation to the tune of Rs. 10,27,17,740/- & Rs. 1,53,70,937/- respectively. And in respect of the assessee's claim of deduction in respect of project with Bangalore Development Authority and Kolkata Municipal Corporation to the tune of Rs. 99,79,770/- & Rs. 25,84,151 was remitted back to AO to examine the terms and conditions of the contract and to allow deduction if it falls in the ken of section 80IA(4) of the Act which is found at page 58 to 97 of PB (which was subsequently allowed by AO for AY 2011-12 & AY 2012-13) ; and similarly in assessee's own case for AY 2014-15 and 2015-16, the Tribunal allowed the claim of deduction u/s 80IA which is placed at 98-104 of PB. So we note that the assessee's claim for deduction u/s 80IA(4) on the profits, it earned from different projects (supra) are covered by the earl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A) on this issue that assessee is a developer of infrastructure facility and so is entitled to the claim of deduction. We note that the Tribunal in earlier assessment years had examined the nature of the five (5) projects and the risk, responsibility and duties of the assessee company and gave its imprimatur to the claim of assessee u/s 80IA(4) of the Act by holding that these projects are development of infrastructure facility. The Ld. A.R has pointed out that in certain assessment years, the Tribunal had even remitted the issue of deduction u/s 80IA(4) of the Act back to the AO and the AO in those proceedings after examining the agreements and nature of risk involved in the project undertaken by the assessee, after being satisfied himself about the claim of the assessee, has allowed it and drew our attention to assessment order for AY 2011-12 and AY 2012-13. So we note that AO was satisfied with the claim of assessee company u/s 80IA(4) of the Act in AY 2011-12 & AY 2012-13 and the Tribunal has upheld the action of Ld. CIT(A) in AY 2008-09, AY 2010-11. 12. For the assessment year 2008-09 order dated 08.02.17, this Tribunal held as follows: "Thus, the fact that the ass....