TaxTMI 
TaxTMI 
2022 (1) TMI 1115
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....ay be, containing identical corresponding contract clauses. We thus treat A.Y. 2004-05 as the "lead" year wherein the Revenue's appeal ITA No.1331/Hyd/2017 proposes the following substantive grounds : 1. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in its assumption that the assessee is a developer without any basis and without even referring to the terms of the agreement entered into by the assessee and without even adverting the findings of the AO on the issue. 2. Whether on the facts and circumstances of the case, and in the Law, the Ld. CIT(A) erred in a not appreciating that the explanation to section 80IA of the Act excluded business in the nature of works contract which is exactly the case of the assessee. 3. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in not appreciating that the development of a new infrastructure facility is a sine qua non for being eligible for claiming deduction u/s 80IA whereas all the works done by the assessee were to only improve already existing facilities. 4. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in a not apprecia....
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.... the order in pursuance to the Hon'ble ITAT direction, AO has disallowed the deduction claimed u/s 80IA(4) on the following Projects by discussing briefly each of the Projects. The AO examined the facts of the case vis-à-vis the conditions stipulated u/s 80IA(4) of I.T. Act with special reference to important factors such as nomenclature used in work order, nature of agreement, This lower appellate discussion partly accepting the assessee's section 80IA deduction relief leaves both the parties aggrieved. The Revenue's case; as per its pleadings, is that this assessee all along has been a contractor only without having undertaken any business or financial risks; as the case may be. It has further placed reliance on this tribunal's recent co-ordinate bench's decision in ITA No.496/Hyd/2018 M/s. NEC NCC MAYTAS - JV Vs. DCIT dated 12.05.2021. 5. Shri B. Santhi Kumar and Shri Mohan Kumar, learned authorized representatives, have not only drawn strong support from the CIT(A)'s action quoting a catena of case law (supra) but also they have taken pains to refer to the corresponding agreement clauses regarding all twin irrigation and road projects. They stated very fairly that al....
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....d to the corresponding project's architectural design (supra). The assessee has thereafter pleaded that it has undertaken the business risk not only in the development of the said lift channel forming part of the irrigation project which has turned barren uneven tracks of land to a canal but also it had deployed all of the corresponding plant and machinery, labour force followed by retention money's project thereby satisfying all the conditions of development of infrastructure facility. All these assessee's arguments fail to evoke our concurrence for the reasons given hereunder. 9.1 The assessee's first and foremost plea that we ought to adopt liberal interpretation while considering section 80IA(4) claim in the light of relevant facts in the instant case deserves to reject. Suffice to say, such a course of liberal interpretation is no more available while dealing with the Income Tax Act's provisions as per honourable apex court's recent constitutional bench's decision in Commissioner of Customs (Import) Vs. Dilip Kumar and Co. (2018) 9 SCC 1 settling the law that a fiscal statute as well as an exemption clause incorporated therein ought to be construed in stricter parl....
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....dication at this stage i.e. of the clinching legislative expression in the latter explanation "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 the state government)". We note that honourable apex court yet another larger bench decision in Kartar Singh Bhadana Vs. Hari Singh Nalwa & Ors Civil Appeal No.6931 of 2000 decided on 27.03.2001 had an occasion to deal with the expression "works" used in section 9-A of the Representation of People Act, 1951. Hon'ble court therein went by the shorter Oxford English Dictionary's meaning that "work means a structure or apparatus of some kind; an architectural or engineering structure, a building edifice. When it was used in the plural, that is, as works, it meant architectural or engineering operations, a fortified building, a defensive structure, fortification or any of the several parts of such structures". Their lordships also took note of honourable jurisdictional high court'sjudgment in B. Laxmikantha Rao Vs. D Chinna Mallaiah AIR 1979 AP 132 whilst adopting the dictionary meaning of "work" in fo....
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....e interplay between the section 80IA(4) Vs. 80IA Explanation involving execution of works contract as is the factual position before us. The said case law distinguished, therefore. 15. Mr. Afzal'slast argument seeks to buttress the point that such a strict interpretation employed in dealing with an instance of development of an infrastructure project would tantamount to closing the deduction chapter altogether and more particularly, when this assessee has borne all risks and responsibilities of the lift irrigation project by paying reduction money and performance guarantee(s) as well. We hold that this last argument also fails to cut any ice since the assessee has merely performed a works contract and its retention money or the so called performance guarantee only gave an assurance to the irrigation development that it had carried out the corresponding construction etc. as per the specified design norms than involving any business risk. We accordingly hold the view of our independent appreciation of facts as well as assessment findings that the assessee is a contractor having executed works contract only. 16. We also deem it appropriate to quote Adam Smith's 'The Wealth of Nati....