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2016 (9) TMI 1296 - ITAT MUMBAIAddition u/s 40A - Held that:- Nowhere the AO doubted genuineness of the expenditure and insufficiency of the details. Only reason given by AO was that payment was excessive or unreasonable. As per our considered view whenever provisions of Section 40A(2) is invoked, burden is on the revenue to show that payment made to sister concern is more than the fair market value for which similar service are available. However, there is no such finding by the AO to allege that payment so made was not reasonable or similar service were available to assessee at lower price than what was paid to the sister concern for getting the work done. After discussing the facts in detail, the CIT(A) has also applied the decision in the case of Batliwala & Karani Vs. ACIT (2004 (12) TMI 626 - ITAT MUMBAI ) wherein it has been held that unless there is a clear finding that market value of services taken from sister concern is less than the price at which services are obtained, there cannot be an occasion to apply disabling provisions of Section 40A(2). We do not require any interference on our part for deleting the addition made u/s.40A(2). - Decided in favour of assessee Disallowance of claim of deduction u/s.80IA(4) - absence of the operation and maintenance - Held that:- The appellant carried out the entire development of its own by giving specifications and necessary Designs/plans as per the location of the site, which was done by the technical experts employed by the assessee. Thus, the assessee did the entire development of the infrastructure facility. We also found that the cost of development of the infrastructure facility was paid to the assessee and the same was received by the assessee as per the bills raised. The MCGM while making the payments, deducted tax at source under the provisions of section 194-C of the Act as the development of infrastructure facility was as per the agreement entered into which was contract between the Government Authority and the assessee and the provisions of Section 194-C of the Act were applicable. However, merely because the tax was deducted in terms of provisions of section 194-C of the Act, It did not make the assessee a mere contractor executing the works contract. In the development of the project it was the technical personnel of the assessee that made the proper specifications etc. from time to time as per the location of the site and as the project progressed. Developer does not mean merely a person who was conceiving the idea. Any enterprise developing infrastructural facilities is a developer of such facility since all the responsibility of the project was that of the enterprise from the start of the project till Its completion, Therefore, It would not be said that merely because the idea was conceived by the government and more Importantly on the land, etc. which was in domain of the government, that the government was the developer. The fact that the TDS was deducted did not in any way bar the appellant from claiming the benefit of deduction u/s.80-IA, as the fact remained that the appellant was a developer of Infrastructural facilities. With regard to the AO’s objection that assessee is neither BOT nor BOOT, we found that the wordings of the section prior to the amendment made w.e.f. 01.04.2000 did not have any alternative by usage of the word 'OR' in sub-section (4) of section 80lA of the Act and hence, the provision of section 80lA of the Act was available only to an assessee who not only developed but after developing also operated and maintained the Infrastructure facility. Thus, while introducing the provisions of section 80lA of the Act, the concept of BOT /BOOT prevailed and it was in this context that the Department issued circular nO.717 dated 14/8/1995, which clearly explained the new provisions of section 80-lA of the Act in terms of Infrastructural development. Thus, the concept of BOT IBOOT underwent changes in the year 2000. If the Intention was only to give benefit to enterprises on the income earned from operating and maintaining the Infrastructure facility, In that case, the provision would not have been amended in such a manner so as to also allow benefit to the enterprise which was merely developing the facility. Further, there would have been no necessity to make the amendment if the enterprise was to be allowed in respect of Income earned from operating and maintaining the facility. When the provision of section 80lA of the Act had been substantially amended and where the enterprise was only a developer of the Infrastructure facility, deduction could not be denied under section 80-lA of the Act on the ground that the concept of BOT/BOOT was the main requirement for getting benefit of deduction under section 80-lA of the Act. Thus as keeping in view that assessee in earlier years have already been allowed deduction 80IA(1) by the AO, we do not find any infirmity in the order of CIT(A) for allowing assessee’s claim for deduction u/s.80IA - Decided in favour of assessee
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