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2013 (5) TMI 80 - ITAT AGRAEligibility of deduction u/s 80IA(4) – Nature of contract - CIT(A) considered it as a contract only for short term improvements and routine maintenance & the assessee had only entered into agreement with M/s. Nagarjun Construction Co. Ltd. (NCC) and not with the Government as required in the section respectively. Held that - After considering nature of works carried out by the assessee, the details of expenditures incurred by the assessee and in the light of amendments in section 80IA R.W. judgement of Bajaj Tempo vs. CIT [1992 (4) TMI 4] held that a provision in a taxiing statute granting incentives for promoting growth and development should be construed liberally. As the case of the assessee covers by the conditions laid down in section 80IA(4)(i), (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining, therefore, the claim of deduction under section 80IA(4) is allowable in respect of Panipat-Jalandhar Project. As in relation to Sagar- Beena project a supplementary agreement of Nagarjuna Construction Company (NCC) Limited between NCC Limited and M/s. PNC Construction Company Limited, the assessee, wherein it is stated that both the parties have formed a JV with the sole purpose to submit a joint bid for Sagar- Beena Road Project. M/s. PNC Construction Co. Limited was offered for the entire works of joint venture and shall be liable for all taxes including income tax solely liable to government of Madhya Pradesh. The agreement with Government of Madhya Pradesh and NCC-PNC joint venture accepted the concept of Joint Venture. Thus the CIT(A) failed to consider the relevant provision of section 80IA(4)(i)(a) which provides that the prescribed infrastructure project in section 80IA(4)(i) is owned by company registered in India or by a consortium of such companies & considered only clause 80IA(4)(i)(b) of the Act without considering section 80IA(4)(i)(a.) As decided in ACIT vs. JSR Constructions (P) Ltd, [2013 (4) TMI 512 - ITAT BANGALORE], and DCIT vs. M/s. Transstroy (India) Limited, [2013 (5) TMI 87 - ITAT VISAKHAPATNAM],the assessee has satisfied the conditions laid down in section 80IA(4)(i)(a)(b) & entitled for deduction under section 80IA(4). Disallowance claim of sign board expenses – Held that - Merely failure to file the relevant vouchers as required by the A.O. cannot be the basis for making disallowance unless it is found that the expenditures were not incurred wholly and exclusively for the purposes of business. Thus delete the addition. Disallowance of temporary building structure expenditure – Held that - The A.O. made the disallowance without pointing out any specific expenditure which was incurred other than for the purposes of business. Thus delete the adhoc addition. Disallowance of Repair & Machinery expenses – Held that – A.O. made the addition on presumption basis. Thus delete the adhoc addition as the expenditures were incurred for the purposes of business. - Other grounds are general in nature, require no independent finding.
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