TaxTMI 
TaxTMI 
2023 (9) TMI 325
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.... dated 23.12.2010 passed by the ITO, Ward-2, Palanpur under Section 143(3) of the Act for A.Y. 2008-09. 2. Since, both the appeals relate to the same assessee and the issue on merit are almost identical, these are heard analogously and are being disposed of by a common order for the sake of convenience. ITA No. 1465/Ahd/2011 - A.Y. 2006-07 (Assessee's appeal) 3. The brief facts leading to the case is this that the assessee filed its original return of income on 30.01.2006 declaring NIL income. Further revised return on 19.02.2007 showing NIL income was filed assessment whereof was finalized upon acceptance of the return under Section 143(3) of the Act dated 10.04.2008 by the Ld. AO. Subsequently, re-assessment order under Section 147 of the Act was passed on 31.03.2009 computing NIL income allowing the deduction under Section 80IA(4) of the Act amounting to Rs. 2,43,70,059/-. However, the Ld. PCIT issued a notice dated 01.03.2011 (appearing at Page No.55 of the paper book filed before us) under Section 263 of the Act opining that the work executed by the appellant was a contract work with the National Highway Authority of India and therefore not be eligible for the tax ben....
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....brought on record and which shows that order passed by A.O. u/s. 143(3) r.w.s. 147 on 31/03/2000 is not erroneous and prejudicial to the interest of the revenue. We also beg to rely upon the following judgements 1) S.Sundaram Pillai & Others (AIR 1985 (SC) 582) 2) Mysore Minerals Ltd. 239 ITR 775 (SC) 3) Kerala State Industrial Development Corporation Ltd. 259 ITR 51 (SC) 4) Bajaj Tempo Ltd. 106 ITR 188 (SC) 5) Gujarat Industrial Development Corporation and Others 227 ITR 414 (SC) 6) Strawboard Manufacturing Co. Ltd 177 ITR 431 (SC) 7) Decision of Rajkot Bench, Rajkot given in case of M/s. Tarmat Bel (JV) KCL, Rajkot v The ITO Ward-1(4) Rajkot ITA No 1111/RJT/2010 AY 2007-08 dated 23/09/2010. This judgement is delivered after the insertion of explanation 8) Double Dot Finance Ltd v. Asstt. CIT (2010) 35 (11) ITCL 481 (Mum 'D' Trib) 9) Om Metals Infraprojects Ltd. v. CIT (2009) 30 (1) ITCL 240 (JPTrib) 10) Ashoka Buildcon Ltd. v. Asstt. CIT (2010) 325 ITR 574 (Bom) In view of the above facts and in the circumstances of the case, the order passed by AO is neither errone....
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.... doing a business with consortium of two companies with a separate agreements in the form of Joint Venture with the separate determined the share of profit in both the venture. Both the companies engaged in the business of civil contracts i.e in the work of construction of roads, bridges, canals etc. During the year the assessee was engaged in the business activity of construction of infrastructure for Swaroopganj-Pindwara of NH-14 in the state of Rajasthan and Vadodara-Padra-Jambusar Road from the National Highway Authority of India, New Delhi and National Highway Circle, Vadodara respectively. The work was allotted by the Government authorities. The contention of the assessee is that all the construction work of the roads and other facilities were infrastructure projects and the assessee developed the same and therefore the assessee has claimed and entitled the deduction u/s 80IA(4) of the Income tax Act in respect of profit earned from the execution/development of civil work. The assessee also submitted the appellate order of ITAT, Rajkot Bench, Rajkot No. ITA No.153/RJT/2007 and group dt. 20-03-2009 in the case of DCIT Cir.2, Jamnagar V/s. Tacon Infrastructure Pvt. Ltd....
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....he Ld. PCIT for alleged non verification by the Ld. AO had already been verified by the said AO in the re-assessment proceeding under Section 143(3) r.w.s. 147 of the Act and duly discussed in his order dated 31.03.2009 reproduction whereof has already been made in the forgoing paragraph, holding the said order erroneous and prejudicial to the interest of the Revenue is not proper. Such finding and / or formation of opinion made by the Ld. PCIT is not sustainable. Furthermore, verification is not a good ground for reopening of assessment under Section 263 of the Act as already held by different forums of law. The Ld. DR relied upon the order passed by the Ld. PCIT. We have perused the entire set of documents and the order passed by the Revenue in three occasions and the evidences adduced by the assessee in different stages of assessment as asked for also appearing in the paper book filed before us. 7. It is evident from the records itself that the Ld. AO upon due application of mind verified the four above issues and allowed the same in respect of status of assessee claimed as joint venture, claim of deduction under Section 80IA(4) of the Act, disallowance of interest expense....
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....assessee was mobilizing and synthesizing people, plans, technical expertise, supervision, co-ordination and control etc, it could be regarded as the developer. The term "contractor- is not essentially contradictory to the term "developer". (ii) The Explanation to s. 80IA does not apply to a works contract entered into by the Government and the enterprise. It only applies to a work contract entered into between the enterprise and other party's "sub-contractor". The amendment merely aims at denying deduction to the sub-contractor who executes a works contract with the enterprise; (iii) It is not required that the developer should also "operate and maintain" the infrastructure facilities so as to be eligible for deduction. 10. The CBDT Circular No.: 14(XL-35), dt. 11/4/1955 says that the assessing officer should while, considering the case of an assessee, take a liberal view in granting relief or allowing claim made by the assessee and the same should not be rejected on procedural or technical ground(s). In Shree Sajjan Mills Ltd. v. CIT & Anr. (1985) 585 (SC), it was observed that the mere fact that the tax statute ought to be strictly construed does no....
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.... revealed that the Assessing Officer had any tangible material with him so as to validly exercise the powers of reopening. Once the Assessing Officer on the basis of material before him had applied his mind and granted deduction in the Assessment Order, it was not permissible for him to exercise powers under Section 147 on the same material on the ground that certain aspects were not considered or that they were overlooked." 10. So far as the ownership of infrastructure facility for which the deduction in question was claimed and allowed by the Ld. AO which has further been found to be erroneous by the Ld. PCIT is concerned, the Ld. AR submitted before us that the same has also been considered in its proper perspective by the Hon'ble Gujarat High Court in the said judgment dated 09.08.2012 which has been duly considered by us. 11. The relevant observation in this regard is as follows: "7.3 It is further stated in the reasons recorded that what was remained to be verified was whether the assessee was owner of the infrastructure facility for which the deduction in question was claimed. Learned advocate for the petitioner rightly submitted that the issue is answered in ....
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....nterest of the Revenue. Since the verification of the issues upon considering the evidences adduced by the appellant being an admitted fact which is also reflecting in the said order dated 31.03.2009 under Section 143(3) r.w.s. 147 of the Act, we decline to accept such contention made by the Ld. PCIT holding the order erroneous and prejudicial to the interest of the Revenue. 13. Moreso, in this particular case, the assessee is found to be on a better footing in regard to the observation and determination made by the Ld. AO in favour of the assessee as the same was made not only in the initial assessment under Section 143(3) of the Act accepting return filed by the assessee, rather in re-assessment proceeding under Section 147 r.w.s. 143(3) of the Act; the same view has been confirmed upon examination of sufficient details provided by the assessee in support of the case made out. 14. There is no iota of doubt that the Ld. AO has made a detailed enquiry in the case of the assessee in the scrutiny proceeding, particularly, in regard to the issue raised by the Ld. PCIT in the order impugned. Upon making the exhaustive enquiry and excessive documents so placed by the assessee befo....
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....t calling for certain details was issued and served upon the assessee on 10.08.2009. The explanation was also directed to be given by the assessee in the form of show cause as to how the claim under Section 80IA(4) of the Act of Rs. 18,52,57,747/- in the return of income would not be disallowed. Alongwith the submission dated 26.02.2009, the assessee furnished requisite details and supporting vouchers, the audited books of accounts as per provision of Section 44AB of the Act, the necessary audit report in the form of 3CB & 3CD alongwith the P&L account, balance sheet, capital account and all other details were duly furnished before the Ld. AO. It is further contended by the assessee that the activities carried out by the assessee involved development of project, engagement of various agencies, raising all finances and investment from its own funds in the construction of project, undertaken risk cannot to be said to be a contractor and being a developer the assessee is entitled to the claim made under Section 80IA(4) of the Act. In support of such contention made by the assessee following judgments relied upon by the assessee as it appears from the order passed by the Ld. AO: ....
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....nciples of interpretation since he is comparing the suppliers of Iron and Bricks being entitled to deduction in "trading" activity putting them at par with appellant's nature of work which is actual construction of infrastructure facilities by entering directly into agreement/ contract with Government authorities. (iv) Moreover, the learned Assessing Officer has grievously erred in referring to inapplicable Circular No. 717 and others and has conveniently ignored the latest Board's Circular showing the liberalization of the eligibility of deduction under section SOLA(4) of the Act. The said Circular issued by the Board vide Circular No 4/2010 /F.No. 178/14/2010-ITA II dated 18.05.2010 is reproduced as under: "Reference have been received by the Board as to whether widening of existing roads consider creation of new Infrastructure facility for the purpose of section 80IA(4)(i) of the Income-tax Act, 1961. Section 80IA(4)) provides for a deduction to an undertaking engaged in developing, or operating and maintaining, or developing, operating and maintaining any infrastructure facility subject to satisfaction of the conditions laid down in the section. T....
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....upheld by the Dept. in earlier years. This factual position clearly goes to show that when the assessee has been held to be a developer all along in past, under same set of facts and with identical kind of business as in present year also and hence, the assessee does not cease to be a developer merely by virtue of insertion of an Explanation on the statute. From A.Y. 2006-07 in particular, the claim of the assessee on identical facts has been admitted and allowed by the Dept and no change in the nature of business has been pointed out by the AO during all succeeding assessments which was completed u/s 143 (3)e scrutiny assessment (ix) The Explanation does not in any way create an artificial fiction about the nature of business of the undertaking but it only states that no deduction shall be admissible in the case where an assessee carries on business in the nature of a works contract. This clearly means that if the nature of business is not just a works contract but something more, the assessee cannot be hit by the rigours of the Explanation. As far as the assessee and its facts on record of Revenue are concerned, the nature of business carried on by it, albeit under a con....
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....work may have been prescribed in the contract in advance, but however building of infrastructure facilities requires the assessee itself to possess technical and engineering know-how as to how to construct etc. The assessee also purchased many materials of construction which went into the infrastructure built by it. If the person awarding the contracts, and entering of contracts is required by the section itself, lays down certain conditions and specifications in the contract as the principal, the existence of pre-decided contractual specifications cannot be held as a factor against the assessee becoming a developer. According to the asseessee all these aspects put together clearly show that the assessee was not merely a works contractor but was also a developer. (xii) Merely because the assessee has acted under a Govt contract, it cannot be denied deduction nor can it be held that it has acted only as a works contractor. This is more so because one of the fundamental pre- conditions of Sec. 80-1A(4) is that the infrastructure facility must have been developed or developed, operated and maintained by entering into a contract with the Govt. therefore, contract with the Govt....
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....iceps To bring into being make active (develop a business) To convert (a tract of land) for specific purpose, as by building From Law Lexicon. Development: 1. The act, process of result of developing or growing or causing to grow, the state of being developed; 2 happening Development of land: The expression "Development" means the realization of the potentialities of land or territory by building or mining Sadruddein Suleman vs. JH Patwadlen, AIR 1965 Bo 224, 242 (constitution of Indian, Article 31), The Webster's Encyclopedia defines the term "develop" as to bring out the capabilities or possibilities of bring to a more advance or effective state; to develop natural resources. (xv) The well established the rule of consistency also lay down that if deduction has been granted in earlier years after due opilotion mind, the same should not be disturbed ordinarily. For this proposition the assessee placed reliance on several decisions of High Courts in Tribunals reported at 104 TTJ 881 (Del), 289 ITR 318 (Del), 243 1 492 (Del), 311 ITR 436 (P&H). The assessee also draw your attenti to the decision of the Apex Court in the case of Ra....
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....ng similar kinds of businesses. In this context, there is no dispute from either side in this regard. That the issue regarding nature of business in our case come to be examined by the department in various assessment years on the issue concerning deduction u/s 80-14(4) and other connected issues, the department have already upheld the claims for deduction u/s. 80-IA (4) of the Act after duly examining the nature of businesses. Beside, our assessments were completed us 143(3) of the Act under which the impugned deduction was granted. During the year under consideration AO is of the view that the assessees is contractors and not developers. The assessee is of the view that although the assessees had entered agreements with Got for infrastructure facilities, the same were in the nature of development by the assesses within the ambit of infrastructure facility, which aspect can also noted from the accounts of the assessee and it must be held that the assessees is being developers and are entitled to deduction us 80-14(4) of the Act In the case of Gujarat Industrieal Development Corporation and Others 227 ITR 414 has considered the meaning of Developer and has held that the word "Devel....
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.... benefit or rebate to eligible persons and therefore even if there could be more than one view regarding the particular nature of business the assessee, the view favourable to the assessee can be taken. (xix) The learned 40 relied upon the decision of the Hon'ble Mumbai Bench in the case cited supra. If your honour will go through said judgment and from the facts narrated therein, in this context, in our case it is nobody's case the appellant is a sub-contractor. The appellant is stated to be the person who entered into the contract with the Govt. in respect of infrastructure facility and directly was involved in executing the same The entering into a contract and that too with the Govt. only is a pre- condition us. 80-1A(4) and hence merely because there is a contract between the Govt. and the assessee, that does not make the assessee a contractor for the purpose of works contract only. Any person carrying on business may be required carry some work the other in course of pursuing its overall business objectives. But does not that such a person does not cannot carry out something more than such work only. our case, we although entered into a contract with Govt, th....
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.... sealed that the decision of the higher authorities is binding on a lower authority in judicial hierarchy the decision of the Tribunal is binding on the Revenue Authority which they should scrupulously follow (xx) Considering the totality of the facts on record as also the development of law concerning the granting of deductions from grass total income, the assessee are of the considered view that the appellant is entitled to deduction w/ 50- IA(4) of the Act as it has been found to have fulfilled all conditions of eligibility, (xxii) Accordingly, looking to the above facts and submission, we request to your honour, please allow our claim u/s 80IA of Rs. 18,52,57,748=00." 20. Before us, the Ld. Counsel for the assessee reiterated the submissions as were made before the Revenue authorities. He further submitted that the assessee had executed construction and development of infrastructure facilities by entering into agreement with State / Central Government, local authority, statutory body etc. These activities include flyover, Roadways etc. He also contended that the assessee has fulfilled all the conditions as mentioned in section 80IA(4)of the Act and in denyi....
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....d that too after deduction of the retention money. The construction and development of infrastructure projects is highly technical and required special skill, adherence to quality. Moreso, the assessee is not compensated for increase in prices of materials, cost of labourers, overhead expenses etc. in various projects. These facts clearly demonstrate that the financial and other risk, responsibility, obligations is timely undertaken by the assessee in construction and development of the various infrastructure projects. Hence, as per the ratio of the jurisdictional High Court in the case of Radhe Developers, the assessee is not merely a works contractor, but engaged in development of project as a whole, and therefore, entitled to the claim of deduction under section 80IA(4) of the Act. The Ld. Counsel for the assessee further relied on the following decisions to support his case: "1. Vijay M. Mistry Construction Pvt. Ltd. in ITA Nos. 2938/Ahd/2011 & Ors. 2. Patel Infrastructure (Rajkot ITAT) ITA No.627/Ahd/2014, Dated 30/07/2020 3. Katira Construction Ltd.(Rajkot ITAT) [2020] 119 taxmann.com 489(Rjt) 4. S.Sugam Construction P.Ltd.(And ITAT) (2013)....
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....contractor gets fixed amount of revenue for executing such work and is not entitled to any share of profit from revenue generated by the developer/land owner. In other words, the developer acts as a principal whereas the contractor acts as an agent in performing the functions as required by the developer. The developers, in true sense, are the persons who are carrying out the business of developing or operating and maintaining or developing, operating and maintaining the infrastructure facility whereas the contractors are those persons who merely execute part of these functions on behalf of developer and do not own any risks and responsibilities of the work. In such cases, the contractors may not be eligible for the deduction under section 80-IA of the Act as they are not developing any infrastructure facility but only providing assistance to the actual developers. 25. We have also considered the submissions made by the Ld. DR. The Ld. DR has relied upon the history and legislative intent of insertion and different amendment of the provision of Section 80IA(iv) of the Act in the following manner: i. As regards the question of eligible business, from a plain reading of t....
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....eds to be stipulated in the agreement between the undertaking and the Government concerned. The enterprise has to be owned by a company registered in India or a consortium of such companies. The tax holiday will be in respect of income derived from the use of the infrastructure facilities developed by them. Finance Act, 1995 34.4 It will apply in respect of infrastructure facilities becoming operational on or after 1-4-1995..." iv. Thus, a clear declaration about the kind of profits eligible for deduction under Section 80IA(4)(i) comes from the aforementioned memorandum. The legislature leaves no scope of misconstruction as to the nature of income eligible for deduction. It is only such income as is derived from the use of the infrastructure facility so developed by the assessee that is eligible for the claim of deduction. v. Thus, the essential requirement to be eligible for deduction under the Section 80IA(4) is that the assessee should have undertaken the work of development as an investment augmenting partner and should have derived profits from the use of the infrastructure facility so developed and not from the activity of construction per se. As wo....
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....re allowed the benefit of deduction. To prohibit such misuse and unintended consequence, the legislature brought in a clarificatory amendment in the year 2007. An Explanation below Section 80 IA(13) was inserted with retrospective effect from 01.04.2000, which reads as under: "..For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a person who executes a works contract entered into with the undertaking or enterprise, as the case may be.." ix. The legislature clarified the real legislative intent behind this scheme of deduction by way of Circular No.3/2008 dated 12/03/2008 being the Explanatory Notes to the Finance Act, 2007. The relevant portion of the Circular is reproduced hereunder for ready reference: "... 34.2 The tax benefit was introduced for the reason that industrial modernization requires a massive expansion of, and qualitative improvement in, infrastructure (viz., expressways, highways, airports, ports and rapid urban rail transport systems) which was lacking in our country. The purpose of the tax benefit has all along been for encouraging private sector participation by way of investment in dev....
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....ng the Central or State Government) and executed by the undertaking or enterprise referred to in sub-section (1).." xii. Restricting the benefit of deduction only to the class of developers bearing investment and entrepreneurial risk is, therefore, a conscious legislative action and is not open to slightest of inferential latitude. The clarificatory amendments represent a fine example of legislative discretion and parliamentary discernment and leave no scope for any attempt at interpretation, liberal or otherwise. It is a settled doctrine of jurisprudence that scope of interpretation does not exist where the language of the law is clear and words are unambiguous. xiii. The A.R. of the assessee has argued that BOLT, BOOT or BOT or similar manner which were the basis of investment augmentation is no more a good law as the only developer are also entitled to claim deduction u/s. 80IA(4) and it is not necessary to operate or maintain the infrastructure facility for claiming deduction in view of amendment made in Finance Act, 2001 w.e.f. 01.04.2002. In this regard, it is submitted that though the condition was relaxed vide amendment made in 2001 but the condit....
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...." or a "development contract". The right and obligations of the assessee in the projects implemented by the assessee on behalf of the Government entities is also required to be examined. Our this approach has also been strengthened by the observation made by the Rajkot Bench in the matter of Patel Infrastructure Pvt. Ltd. Vs. DCIT, ITA No.627/Ahd/2014, Asst.Year 2010-11. We, therefore proceed to analyse the facts of the present case to find out whether the appellant acted as a "Developer or "Works Contractor". 28. The tender clauses demonstrates the financial involvement / risk factors / liabilities involved in the Projects undertaken by the appellant for Construction and Development of Road - Infrastructure Projects. i. BASIC QUALIFICATION OF ASSESSEE Appellant company is registered as Category AA Contractor with Government of Gujarat for construction & development of infrastructure projects. ii. ELIGIBILITY FOR BIDDING OF TENDER Contractor must have necessary experience, facilities, ability, financial resources, specified turnover, specific experience in construction of Roads, Qualified Key personnel, plant & machinery & equipments, etc t....
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....ecured & Unsecured Loans) vi. PLANT & MACHINERY The assessee has to use and invest heavily in purchasing own P & M, Equipments etc. in order to be eligible to bid for Tender and carry out the development of various projects - SITE 1: Schedule of fixed assets, which is appearing at Page 33 of PB-I filed before us. The gross block of assets as on 31-03-2008 are to the tune of Rs. 8,19,29,849/- SITE 2: Schedule of fixed assets, which is appearing on Page 39 of PBI filed before us. The gross block of assets as on 31-03-2008 are to the tune of Rs. 23,77,453/- vii. PERSONELL: The assessee has to employ own team of experienced and qualified Project Manager, Highway Engineer, Bridge Engineer, Material Engineer, Survey Engineer etc. The same is appearing at Section VIII Schedule C of Tender documents at Page 86 of PB-II filed before us. viii. SECURITY DEPOSIT Appellant has to pay Performance Security Deposit at 10% of contract price. Page- 104 of PB-II, Appendix to Bid, Clause-1 of Tender. Performance Security Deposits are to be valid for 14 days from the date of expiry of the Defect Liability Period. The same ....
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....ation and abide by all Labour Laws, which is appearing from Clauses 23.1 to 25.4 of tender documents at Page 125 of PB-II filed before us. xv. SAFETY OF ALL ACTIVITIES: Contractor will be responsible for all activities on the Site, safety of all persons on site, provide and maintain at his own cost all lights, guards, fencing, warning signs etc. For protection of works and convenience of Public, take all reasonable steps to protect the environment on and off the site and avoid damage to all. The same is appearing from clause 19.1 of Tender documents at Page 122 of PB-II filed before us. xvi. CONSEQUENCES OF DEFAULT: If the assessee defaults in work or violates any terms of contract, it shall be liable to penalty in terms of lien of Government over the plant, machinery, equipments, etc, forfeiture of security deposit etc. The same is appearing from Clause 63.1 of Tender document at Page 146 of PB-II filed before us.h thepproved draft come to 29. We have carefully considered the different clauses in the tender notice in respect of projects undertaken by the appellant in rehabilitation and upgradation of Swaroopganj, Pindwara Section (Km 249.7....
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....al work. Assessee would enroll members and collect charges. Profit or loss which may result from execution of the project belonged entirely to the assessee. It can thus be seen that the assessee had developed the housing project. The fact that the assessee may not have owned the land would be of no consequence. 35. With respect to the question whether the assessee had acquired the ownership of the land for the purposes of the Income Tax Act and, in particular, Section 80IB(10) of the Act and to examine the effect of Explanation to Section 80IB(10) introduced with retrospective effect from 1.4.2001, since several aspects overlap, it would be convenient to discuss the same together. 36. We have noted at some length, the relevant terms and conditions of the development agreements between the assessees and the land owners in case of Radhe Developers. We also noted the terms of the agreement of sale entered into between the parties. Such conditions would immediately reveal that the owner of the land had received part of sale consideration. In lieu thereof he had granted development permission to the assessee. He had also parted with the possession of the land. The deve....
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....ng out various other activities including enrolling members, accepting members, carrying out modifications engaging professional agencies and so on. Most significantly, the risk element was entirely that of the assessee. The land owner agreed to accept only a fixed price for the land in question. The assessee agreed to pay off the land owner first before appropriating any part of the sale consideration of the housing units for his benefit. In short, assessee took the full risk of executing the housing project and thereby making profit or loss as the case may be. The assessee invested its own funds in the cost of construction and engagement of several agencies. 32. The provisions of section 80IA(4) of the Act provides that deduction would be available to any enterprise which carries on the business of - (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility which fulfills the conditions prescribed therein. 33. As per the Explanation, even a road and bridge is an infrastructure facility for the purposes of section 80-IA(4). The primary condition is that the enterprise must carry on t....
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....n developing, operating and maintaining of infrastructure facilities, which clearly makes out the case of the assessee within the scope and ambit of section 80IA(4) of the Act so as to claim the impugned deduction. 35. The terms and conditions of tender documents / agreements / work order and comprehensive view of the activities undertaken by the assessee as discussed above clearly demonstrates that the assessee-company has undertaken substantial activities in respect of various projects awarded by various statutory bodies, which makes the assessee to qualify as a developer of Infra facility and to make claim necessary benefits under section 80IA(4) of the Act. 36. However, we have further considered the judgments relied upon by the Ld. AR in the matter of CIT vs. ABG Heavy Industries Ltd. [2010] 189 Taxman 54 (Bombay). The paragraph 22 of the said judgment suggests that in the particular facts and circumstances of the case in hand, the assessee is entitled to relief claimed under Section 80IA(4) of the Act. The first and foremost condition imposed by the statutory provision is that the enterprise must start operating and maintaining the infrastructure facility on or after 01....
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....ect 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 entirely 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. 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 (a) 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 postulate....
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....ssessee and to entertain the same by giving relief to that effect. 38. Before parting with the matter we would like to mention that we have considered the judgments relied upon by the Ld. AR passed by different judicial forums including the judgment passed in the matter of Patel infrastructure and Katira construction (supra) passed by the Rajkot Bench and Katira construction passed by the Hon'ble jurisdictional High Court wherein the constitutional validity of insertion of explanation below sub Section 13 of Section 80 IA of the Act was challenged. The Ld. Representative appearing for the Revenue vehemently argued on this point that the jurisdictional High Court in the said matter already decided the issue against the assessee. Fact remains that the jurisdictional High Court in that particular matter dealt with the constitutional validity of the insertion of explanation as mentioned hereinabove and decided the same in favour of the revenue to this effect that such explanation brought with retrospective effect from 01.04.2000 by the Finance Act No. 2 of 2009 was very well within the competence of Parliament. As such there was no issue whether the assessee is acting as a developer....
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....als of the assessee for 4 assessment years from 2003-04 to 2006-07. Smilarly, Vishakhapatnam Tribunal in the case of Ms. Transmory (India) Lat. Gunter ITO Wd.2(2), Guntur, allowed the assessee's appeal vide its order dated 14-7-2011 for A Y. 2006-07. Further, it is seen that Bombay High Court in the case of Mahalaxmi Infra Project Ltd. Vs. ACIT, in Income-tax Appeal No.4610 of 2010, vide its order dated 30-8-2011, quashed the Tribunal's order and restored it to the file of the Tribunal thereby allowing the assessee's appeal. Given the facts of the appellant's case, and the case laws referred to above, I hold that appellant is entitled to deduction w/s.80IA(4). AO is directed to allow the claim. This ground of appeal is allowed." 40. We have further considered the judgment as relied upon by the Ld. AR passed in the case of Vijay M. Mistry (supra), which was passed by the Coordinate Bench on 23.12.2022 wherein the assessee had undertaken infrastructure facilities, such as, development of roads, bridges, water treatment plants, canals, siphon work (irrigation projects), sewage treatment plant etc. by entering into contract with various Government authorities. In fac....