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2012 (12) TMI 338 - DELHI HIGH COURTDeduction u/s 80HHBA – Deduction u/s 80HHB – Assessee was engaged in the business of engineering and technical consultants – Deduction claimed in relation to derive profits from the business of execution of a foreign project – AO argued that assessee’s role in the above works are of consultancy and supervisory nature which cannot be treated as an integral part of execution of any project. Whether services rendered by the assessee fell within the scope of the expressions “execution of a foreign project” or “execution of a housing project’’ and the profits derived from such services are eligible for the deduction u/s 80HHBA & 80HHB Revenue contended that the expression used in both the sections is “execution of the project” or “execution of a housing project” and not merely “project” and therefore, the word “execution” would merely involve the physical activity or aspect of the project and cannot take in the technical or technological aspect. Held that:- It was the duty of the assessee to ensure that the construction of the project is undertaken in an economical and efficient manner in accordance with the conditions of the contract, technical specifications and engineering drawings and any amendments thereto, to optimize the use of the available resources and to minimize the cost, maximize the quality of the work, to expedite the construction so as to meet the completion deadlines, to ensure that there is no cost over-run etc. Supply of material and labour which constitute the physical aspects of the project cannot by itself ensure the execution or completion of the project; it has to be complemented by an equally important aspect of the supply of the designs, drawings and such other technical or technological inputs as well as supervisory and engineering services rendered by the assessee company Both the physical as well as technical aspects of the project are equally important and one cannot be separated from the other. Therefore assessee is entitled to the deduction both u/s 80HHB and u/s 80HHBA. In favour of assessee
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