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2008 (12) TMI 744 - AT - Income TaxValidity of order of revision u/s 263 - CIT held assessment order allowing deduction u/s 80IA(4) as erroneous and prejudicial to the interest of revenue - assessee has earned profit from the Goshi Khurd Project wherein dam gates have been constructed and installed by the assessee - during the AY 2003-04 claiming deduction u/s 80IA(4) - in AY 2004-05 in respect to the profit earned, assessee filed its return of income, which was accepted by the AO. CIT was however, of the different opinion that as per the provisions of section 80IA(4) for the relevant previous year, the enterprises or undertaking carrying on the business of "Developing the Infrastructure facility" was eligible for deduction but only the profit earned from "Operating and maintaining the infrastructure facility" was exempt and not the profit derived from "Developing the infrastructure facility". HELD THAT:- The Mumbai Bench of the Tribunal in the case of PATEL ENGG. LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLES 24 & 26. [2004 (6) TMI 245 - ITAT BOMBAY-F] relied upon by the AO vide para 8 thereof, under almost similar facts and circumstances has held that the assessee therein was the developer or infrastructure project and eligible for deduction under section 80IA. As per the Law Dictionary, the term "development"is bringing into being, converting natural resources, like land into a specific purpose by building extensively, realizing and making real the potential of natural resources, and bring to a more advanced or effective stage etc. The contention of the ld. D/R is concerned regarding that the assessee is not the developer of irrigation project since u/s 80IA(4) "developer" who do not "operate and maintain" the infrastructure facilities are not eligible for the deduction, we do not agree with. Since in our view the word "OR" has been inserted in section 80IA(4)(i) as any enterprise carrying on the business of:- (i) developing, or (ii) operating and maintaining, or (iii) developing, operating and maintaining any infrastructure facility has been introduced by the legislature from assessment year 2002-03 only to remove the ambiguity. Hence the insertion of word "OR" was clarificatory in nature. In our view, AO has also rightly followed the decision of the Tribunal. The assessment order, therefore, cannot be held as erroneous merely because the ld. CIT nurturing a different view on the issue. Hence the mid assessment orders on the issue, which is not erroneous even if it is prejudicial to the interest of revenue cannot be made a subject matter of revision u/s 263. There is also no substance in the contention of the id. D/R that the assessment orders on the issue have only been set aside by the ld. CIT vide the impugned order and the assessee will be at liberty to avail the opportunity to present its case on the issue before the AO in a fresh assessment so directed by the ld. CIT, because it cannot be a acceptable reason for justification of invocation of provisions of section 263. The requirement for invocation of the provisions of section 263 is that the assessment order on the issue must be erroneous in so far as it is prejudicial to the interest of revenue and mere mentioning of the said two ingredients will not extend any jurisdiction to the ld. CIT to invoke the supervisory provisions u/s 263. Therefore, we are of the view that the assessment orders in question on the issue were neither erroneous nor prejudicial to the interest of revenue hence the ld. CIT was not justified in setting aside the same. The assessment orders on the issue for the assessment years under consideration are restored while setting aside the revisional order u/s 263 in question. The issue is decided in favour of the assesses Grounds raising the issue are accordingly allowed - In the result, appeals are allowed.
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