TaxTMI 
TaxTMI 
2014 (11) TMI 1266
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....o far as ground with regard to the claim of deduction u/s 80IA of the Income Tax Act, 1961 is concerned, the Tribunal has decided the issue in favour of the assessee in ITA No. 4842/Mum/2006, ITA No. 514/Mum/2009, ITA No. 7885/Mum/2010 & ITA No. 283/Mum/2011 order dated 20-6-2014. 3. The Tribunal vide its order dated 25th June, 2014 for A. Ys 2004-05, 2005-06 and 2007-08 after following the decision of Hon'ble Bombay High Court in the case of CIT vs. ABG Heavy Industries Ltd. , 189 Taxmann 54 held that the assessee was entitled for claim of deduction u/s 80IA(4) of the Act. The precise observation of the Tribunal was under:- "10. We have heard both the parties and their contentions have carefully been considered. We have carefully gone through the 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 pre-requisite of the section to enable the assessee to claim deduction is that he should be....
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....see undertook an obligation to supply, installing, testing, commissioning and maintenance of container handling equipments namely the cranes in question. Their Lordships in para-17 have observed that the obligations which have been assumed by the assessee under the terms of the contract are obligations involving the development of an infrastructure facility. Section 80 IA(4) of the Act essentially contemplated a deduction in a situation where an enterprise carried on a business of developing, maintaining and operating infrastructure facility. A port was defined to include within the purview of the expression "infrastructure facility". The obligations, which the assessee assumed under the terms of the contract were not merely for supply and 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 ....
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....astructure project should be developed by the assessee. 10. 5 Now the next question will be that whether to claim deduction under section 80 IA(4) it is necessary for an assessee not only to develop the project but also to operate and maintain the infrastructure facility. This issue is also no more res-integra and is covered by the aforementioned decision of Hon'ble Bombay High Court in the case of CIT vs. ABG Heavy Industries Ltd. (supra). In that case it was the contention of the Revenue that for assessment year 1997-98 and 1998-99, it was necessary for the assessee to cumulatively fulfill the requirement of developing, operating and maintaining infrastructure facility. It was pleaded by the Revenue that, even if it be held 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 p....
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....provisions are harmoniously construed, the object and intent underlying the amendment of the provision by the Finance Act of 2001 would be defeated. A harmonious reading of the provision in its entirety would lead to the conclusion that the deduction is available to an enterprise which (i) develops; or (ii) operates and maintains; or (iii) develops, maintains and operates that infrastructure facility. However, the commencement of the operation and maintenance of the infrastructure facility should be after 1-4-1995. In the present case, the assessee clearly fulfilled this condition( emphasis ours). 23. In the view which we have taken, all the assessment years in question to which this batch of appeals relates would 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 tha....
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....tion all decisions including the decision of this court in the matter of CIT v. ABG Heavy Industries Ltd. Reported in 322 ITR 323. All contentions are kept open. " 3. The appeal is dismissed of in above terms. " 10. 8 In the order the Tribunal after considering the decision of Hon'ble Bombay High Court in the case of CIT vs. ABG Heavy Industries Ltd. (supra) has decided the issue in favour of assessee. While deciding the present appeal vide order dated 9/2/2010 it was found by the Tribunal that both sides were in agreement that the facts and circumstances are mutatis- mutantis similar to those considered by the Larger Bench of the Tribunal in the case of B. T. Patel & Sons Belgaun 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 decis....
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....ed that following the aforementioned decision of Larger Bench in the case of B. T. Patel & Sons Belgaun Construction Pvt. Ltd. (supra), Ld. CIT(A) has held that assessee is not entitled to get deduction under section 80 IA(4). It has already been pointed out that the Larger Bench decision in the case of B. T. Patel & Sons Belgaun Construction Pvt. Ltd. (supra) is no more a good law and in the case of that assessee itself, Division Bench has held that assessee is entitled for deduction under section 80 IA(4) of the Act. We have already held that assessee is entitled for deduction under section 80 IA(4) in respect of A. Y. 2004-05 and 2005-06. That decision will be applicable for A. Y 2007-08 in case of both the assesees. Therefore, these appeals of the assessees are also allowed. " 4. We have carefully gone through the order of the Tribunal in assessee's own case/associated concern's case as reproduced above and found that issue 80IA(4) was decided by the Tribunal. The facts and circumstances in the case during the year under consideration are exactly same. Respectfully following the order of the Tribunal, we direct the A. O. to allow the claim for deduction u/s 80IA(4) of the Act.....
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....rat High Court in the case of UTI Bank Ltd. , 32 taxmann. com 370, Gujarat State Fertilisers & Chemicals Ltd. , 36 taxmann. com 230 and Gujarat State Fertilisers & Chemicals Ltd. , 36 taxmann. com 557. He further drawn our attention to the audited P&L account of the company to indicate that cash profit of the assessee company was in excess of the investments made in JVs as on the cut-off date. 10. We have considered the rival contention and deliberated upon the judicial pronouncements cited. We found that there was a cash profit of Rs. 14. 62 crores against which investment in JVs was Rs. 8. 27 crores after excluding investment in Akurti-SMC JV for which separate disallowance has been considered by the A. O. 11. The Hon'ble jurisdictional High Court in the case of CIT vs. Reliance Utilities & Power Ltd. [2009] 313 ITR 340 held that if there are funds available, both interest free and overdraft/loans taken, then presumption would arise that investments would be out of the interest free fund generated or available with the company, if, the interest free funds were sufficient to meet the investments. Recently, the Hon'ble Bombay High Court again followed the same principle in the ca....