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2014 (1) TMI 292 - AT - Income TaxWhether deduction u/s 80IA available to work contractor - As per the explanation substituted to section 80IA by Finance (No. 2) Act, 2009 with retrospective effect from 01.04.2000 - Section 80IA is not applicable for the persons who executes a works contract with any undertaking or enterprises - Following GVPR Engineers Ltd. -vs.- ACIT [2012 (4) TMI 149 - ITAT HYDERABAD] - Mere works contract would not be eligible for deductions under section 80IA - The purpose of the tax benefit has all along been to encourage investment in development of infrastructure sector and not for the persons who merely execute the civil construction work - Section 80IA is available to developers who undertakes entrepreneurial and investment risk and not to the contractors, who undertake only business risk - The assessee clearly demonstrated that it has undertaken huge risk in terms of development of technical personnel, plant and machinery, technical know-how, expertise and financial resources - Prior to amendment the 'or' between the activities was not there, after the amendment 'or' has been inserted with effect from 1.4.2002 by Finance Act, 2001 - If the contracts involve design, development, operating and maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract to deny the deduction under section 80IA - The contracts which contain above features to be segregated, this deduction under section 80IA have to be granted and the other agreements which are pure works contracts hit by the Explanation to section 80IA(13 ), those work are not entitled for deduction under section 80IA - The order of CIT was quashed - Decided in favour of assessee.
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