TaxTMI 
TaxTMI 
2022 (11) TMI 226
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....sue involved in these two cross appeals is in relation to disallowance of deduction of Rs.3,37,35,560/- claimed by the assessee u/s. 80IA of the Act. The assessee is in appeal in respect of disallowance of an amount of Rs.23,97,310/- and the department is in appeal in respect of relief granted by the Ld. CIT(A) for allowance of Rs.3,13,38,250/-, both comprising the total claim of Rs.3,37,35,560/-. 4. Brief facts as culled out from records are that assessee is a Public Limited Company promoted by Govt. of Goa for taking up infrastructural development work for various departments of the Govt. of Goa. Assessee is floated by the Government of Goa as a Special Purpose Vehicle (SPV) for speedy implementation of various infrastructural projects envisaged by the State Government like roads, bridges, flyovers, traffic management, bus stand, water supply augmentation etc. all over the state. The projects undertaken by the assessee are on cost plus basis. 4.1. The Government pays to the assessee based on expenditure incurred by it during the year towards development of various projects. Apart from the project development activities, assessee has also financed various government departme....
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.... a company which is wholly owned by the Government and as a SPV of Government of Goa and is a developer of various infrastructure facilities . Attention was invited to the provisions of section 80IA(4) of the Act according to which deduction is available to an enterprise carrying on the business of - (i) developing, or (ii) maintaining and operating, or (iii) developing, maintaining and operating any infrastructure facility. 4.5. Thus, it was contended that assessee carries on the activities of developing the infrastructure projects and the Ld. AO has wrongly presumed the assessee as a work contractor. To support its contention, it was submitted that legislature has provided that the income of the developer of a infrastructure projects would be eligible for deduction for which it presupposes that there could be income to the developer i.e. to a person which is carrying on the activities of handling/developing the infrastructure facility. Therefore, merely because the assessee was paid by the Government for development work, it could not be denied deduction u/s. 80IA(4) of the Act. 4.6. On the aspect of treatment of assessee as a work contractor by t....
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.....9. The relevant extracts of findings given by the Ld. CIT(A) in respect of relief granted to the assessee is reproduced as under: "4.2. I have considered rival contentions of AO and the AR of the appellant. I have also deliberated on the judicial pronouncements referred by AO and the AR of the appellant. From the P & L account and the Balance Sheet of the appellant produced as on 31.03.2014, I find that the appellant is in the business of construction/development of infrastructure facilities and other projects which do not qualify for deduction u/s. 80IA(4) of the Act. The income from other projects has been offered to tax by the appellant in the return of income. It undertakes project of roads, bridges and other infrastructural facilities from State Government. The appellant being a developer of infrastructural facilities for the eligible projects within the meaning of section 80IA(4) of the Act, claimed deduction u/s. 80IA(4) of the Act. However, the AO disallowed the claim by stating that the appellant is not a developer but a nodal agency. The AO placed reliance on the ratio of decision of Hon'ble ITAT 'C' Bench, Ahmedabad in the case of Gujarat Urban Deve....
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....ity and on completion, same was handed back to the concerned Government department. In few cases after operation for certain period, the entire site with the infrastructure facility developed has been handed over to the owner i.e. govt. Thus, keeping in view the facts of instant case the AD wrongly relied on the order of the Ahmedabad Tribunal by treating the appellant as a nodal agency and not developer without appreciating that the appellant has entered into an agreement with the State Government or a local authority or any other statutory body for (i) developing or (ii) operating" and maintaining or (iii) developing, operating and maintaining a new infrastructure facility. For this purpose, I place reliance on the order of Hon'ble ITAT, Mumbai larger third Member Bench in the case of B. T. Patil & Sons Belgaum Construction (P) Ltd. v. Asstt. CIT [2010] 35 SOT 171. It is submitted that therein the assessee is engaged in development of infrastructure facility by way of constructing Road for PWD Department of the Government and it was held that the appellant is eligible for deduction u/s. 80IA(4) of the Act." 4.10. In addition to the findings given in above extracts, Ld. CIT....
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....usly, with the provisions which were made by Parliament in section 80-IA of the Act explanatory circulars issued in an administrative capacity by the Central Board of Direct Tax held the field. These circulars gave expression to the scope and ambit of the concession was provided by section 80- 1A. The evolution of section 80-IA would show a progressive liberalisation of the legislative scheme, in the interests of aiding the growth of infrastructure. The administrative circulars issued by the Central Board of Direct Taxes in implementation of section 80-IA similarly liberalised the scheme, consistent with the Act." 4.12. In respect of sustaining the addition of Rs.23,97,310/-, the relevant findings given by Ld. CIT(A) are reproduced as under: "5.1. During the appellate proceedings, the details of other income were called for and examined. The said details are as under: Application fees 9,120 Misc. receipts 508 RIGS Charges 25,255 34,883 Sale of tender documents 15,45,321 Processing fees 5,11,127 Empanelment of consultants 1,75,032 PES Licence fees 94,088 EMD forfeit 36,860 3,62,428 2362428 + 34883 = 23,97,31....
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....e tabulation above, we note that in the present case, deduction has been allowed for all the earlier assessment years and the Ld. AO has now sought to disallow the deduction for the eighth year which otherwise is allowable for consecutive period of ten assessment years. In the instant case before us, as there is no change in the facts and the applicable law, if the deduction has been allowed in the initial assessment years, the same cannot be withdrawn in the subsequent years without making disallowance in the initial assessment years. 5.2. Reliance is placed on the decisions of Hon'ble jurisdictional High Court of Bombay in the cases of : (i) Western Outdoor Interactive (P) Ltd. (2012) 25 taxmann.com 340 (Bom); (ii) Simple Food Products (P) (2017) 84 taxman.com 239(Bom); (iii) Paul Brothers (1995) 216 ITR 548 (Bom) 5.3. While confirming the allowance of deduction granted by the Ld. CIT(A), we also place reliance on the decision of the Hon'ble jurisdictional High Court of Bombay in the case of ABG Heavy Industries Ltd. (supra). In respect of the addition of Rs.23,97,310/- confirmed by the Ld. CIT(A) and agitated by the assessee before us, we do not ....