TaxTMI 
TaxTMI 
2008 (6) TMI 225
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....Ltd. [2008] 215 CTR 150 (Bom.) for the proposition that the payments of contributions made beyond the due dates are not allowable under section 43B of the Income-tax Act. We have heard the rival submissions and perused the orders of the lower authorities as well as the aforesaid judgments. We have noticed that the jurisdictional Hon'ble High Court of Bombay has considered the decision of Hon'ble Supreme Court in the case of Vinay Cements Ltd. (supra) and held that if the contributions are not paid within the due date, it is to be disallowed. In our opinion, we have to follow the judgment of the jurisdictional High Court in the case of Pamwi Tissues Ltd. (supra) as their Lordship have held that the Supreme Court has merely dismissed the special Leave Petition in Vinay Cements Ltd. (supra) and it cannot be said that the said amounts to law declared by the Hon'ble Supreme Court. Accordingly, the ground 1 taken by the revenue is allowed. 2. Ground 2 is against the decision of the CIT(A) in allowing of deduction under section 80-IA of Rs. 22,88,860 when the assessee is mere a contractor or developer of infrastructural facility and not engaged in operating and maintaining t....
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....e to a case of an enterprise like in assessee case, which has undertaken mere development of infrastructural facility and not developing, operating and maintaining or operating and maintaining. Aggrieved with the above decision of the CIT(A), the revenue is before us. 5. Ld. DR for revenue relied on the orders of the Assessing Officer and argued that the clause (i) of section 80-IA(4) specified certain conditions at sub-clauses (a), (b) and (c) of the clause and the deduction is available on fulfilling these conditions. DR argued that the decision of the Tribunal in the case of Patel Engineering Ltd. (supra) relates 2000-01 and therefore, pertains to pre-amended period. On the other hand, ld. AR for assessee argued that the assessee is a developer of infrastructural facility, as per the post amended provisions of sub-section (4) of section 80-IA, any enterprise carrying on business of developing is entitled to deduction subject to the relevant conditions specified in the said sub-section. Assessee relied on post-amended provisions brought by Finance Act, 2001. Assessee also relied on the decision of the Co-ordinate Bench in the case of Patel Engineering Ltd. (supra). Further, the ....
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....n 80-IA reads as under:- "(4) This section applies to - (i)any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing operating and maintaining any infrastructure facility which fulfils all the following conditions, namely:- (a)It is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act; (b)it has entered into an agreement with the Central Government or a 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. (c)it has started or starts operating and maintaining the infrastructure facility on or after 1-4-1995; Provided * * * * * * Explanation.-For the purposes of this clause, "infrastructure facility" means- (a)a road including toll road, a bridge or a rail system; (b)to (d) * * * * * * " The above sub-clause (c), therefore, is obviously applicable to an enterprise which is engaged in 'operating and maintaining' the infr....
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.... a loss in the hands of the developer as he is not operating the infrastructure facility. When the Legislature has provided that the income of the developer of the infrastructure project would be eligible for deduction, it pre-supposes that there can be income to developer, i.e., to the person who is carrying on the activity of only developing infrastructure facility. Obvious as it is, a developer would have income only if he is paid for development of infrastructure facility, for the simple reason that he is not having the right/authorisation to operate the infrastructure facility and to collect toll therefrom, has no other source of recoupment of his cost of development. Considered as such, the business activity of the nature of "BT" (build and transfer) also falls within eligible construction activity, that is, activity eligible for deduction under section 80-IA inasmuch as mere 'development' as such and unassociated/ unaccompanied with 'operate' and 'maintenance' also falls within such business activity as is eligible for deduction under section 80-IA. Therefore, merely because the present assessee was paid by the Government, for development work, it can....
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.... developed infrastructure facility as per agreement with Maharashtra State Government/APSEB. Therefore, merely because, 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 claiming deduction under section 80-IA(4). Discussed/considered as above, we hold that the assessee having carried out the work of constructing the abovementioned two projects, . . . . is appropriately a developer of the said infrastructure facilities, and in turn is entitled, and entitled justifiably, to claim deduction under section 80-IA(4)." 11. The above judgment is also relevant, which contained adequate discussion on the applicability of sub-clause (c) to a case of an enterprise which is engaged in only developing of a infrastructural facility. Para 62 of the decision in the case of Patel Engineering Ltd. (supra) is reproduced as follows:- "It is noteworthy that the condition at clause (c), which reads "It has started or starts operating and maintaining the infrastructure facility on or after 1-4-1995"....
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.... operating or maintaining apart from others have been addressed by the Bombay Benches of Tribunal has addressed on various issues in this regard in the case of Patel Engineering Ltd. ( 94 ITD 411 ). Revenue disputes that the said judgment relates to the pre-amended provisions and relevant assessment year is assessment year 2002-03. Thus the post amended provisions apply. It is true that these provisions of section 80-IA(i) have been amended by the Finance Acts, 2002 and 2005 bringing more clarity on the issue. Evolution is the said amendments pre-supposes that there is need for the more infrastructural facilities in India and the enterprises engaged in developing or operating or maintaining such projects within the meaning of section 80-IA(4)(i) are entitled to statutory deduction under the said section. Now the question is about the language used in the said section. In short, the Assessing Officer disputes that the condition at (c) apply to the enterprise engaged in developing. Changes include: (i) Clarifying that the enterprises engaged in developing the infrastructure facility are entitled to deduction and (ii) The condition of transferring the developed infrastructure mandator....