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2013 (9) TMI 556 - ITAT CHENNAIDeduction under section 80IA – Infrastructure facility – Whether the contractor was synonymous with the developer within the meaning of section 80IA (4)(i) of the Act - Whether the condition placed in clause (c) was applicable to the case of a developer, who was not carrying on business of operating and maintaining the infrastructural facilities - The assessee claimed special deduction under section 80IA - The assessing officer rejected the claim but the commissioner (Appeals) Tribunal allowed it - Held that:– Assessee was engaged in the civil construction work like construction of flyover, bridge underpass, sewerage, water supply etc. for various local bodies, railways, Central/State Governments - Following COMMISSIONER OF INCOME-TAX Versus ABG HEAVY INDUSTRIES LIMITED [2010 (2) TMI 108 - BOMBAY HIGH COURT] - The main thrust of the decision was that a developer need not be the owner of the land on which development was made - Although that decision was rendered in the context of a developer of buildings and the deduction was in respect of 80IB(10), but the definition of ‘developer’ given in that case is also relevant for this purpose - Moreover, we are in agreement that in incentive provisions, the construction should be liberally given as held by the Hon'ble Supreme Court rendered in the case of Bajaj Tempo Ltd vs CIT [1992 (4) TMI 4 - SUPREME Court]. When the assessee makes investment and himself executes development work and carried out civil works, he was eligible for tax benefit u/s 80IA of the Act - the assessee was entitled to deduction u/s 80IA(4) of the Act. Entering into a lawful agreement and thereby becoming a contractor should in no way be a bar to the one being a ‘developer’ - The assessee had developed infrastructure facility as per the agreement with Maharashtra Government/APSEB, therefore, merely because in the agreement for development of infrastructure facility the assessee was referred to as a 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 u/s 80IA(4) - Section 80IA(4)(i)(b) required development of infrastructure facility and transfer thereof as per agreement and it cannot be disputed in view of the material on record that the assessee had transferred the infrastructure facility developed by it by handing over the possession thereof to the concerned authority as required by the agreement - The handing over of the possession of developed infrastructure facility/project is the transfer of the infrastructure facility/project by the assessee to the authority. The handing over of the infrastructure facility/project by the developer to the Government or authority takes place after recoupment of the developer’s costs whether it be “BT’ or ‘BOT’ or ‘BOOT’ because in ‘BOT’ and ‘BOOT’ this recoupment is by way of collection of toll therefrom whereas in ‘BT’ it was by way of periodical payment by the Government/Authority - The land involved in infrastructure facility/project always belongs to the Government/Local authority etc., whether it be the case of ‘BOT’ or ‘BOOT’ and it is handed over by the Government/Authority to the developer for development of infrastructure facility/Project. The same has been the position in the given case as well - So, deduction u/s 80IA(4) is also available to this assessee which had undertaken work of a mere ‘developer’ - Decided against Revenue.
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