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2008 (6) TMI 281 - AT - Income TaxAllowability of deduction under s. 80-IA - work on contract basis - Allowability of employer's contribution to ESI payment - Paid beyond the due date but before the date of filing the return of income. Allowability of deduction under s. 80-IA - work on contract basis - insitu lining for water supply project and anti-corrosive lining - Ex consequenti notice u/s. 148 issued and the deduction claimed u/s 80-IA was denied - CIT(A) reversed the order of the AO - 'Contractor' and 'developer' - HELD THAT:- 'Contractor' and 'developer' are two different terms. As per the Oxford Advanced Learner's Dictionary, 'developer' is a person or company that designs and creates new projects, whereas 'contractor' is a person or company that has a contract to do work or provides services or goods to another - It is made abundantly clear that the prescription of s. 80-IA shall not apply to a person who executes work contracts entered into with an undertaking or enterprise. Thus, in a case where a person who makes investment and himself executes development works and carries out civil works will be eligible for tax benefit u/s. 80-IA of the Act. In contrast to this, a person who enters into a contract with another person for executing works eon tract will not be eligible for the tax benefit u/s. 80-IA of the Act - Thus, the assessee was doing only contract works of insitu cement lining for water supply project of the Gujarat Water Supply and Sewerage Board. As such, the benefit of s. 80-IA cannot be extended to the assessee. The decisions relied upon by the assessee were rendered prior to the amendment and as such not relevant for deciding this issue - the order of the AO restored and the order of the CIT(A) reversed - In the result the Revenue's appeal stands allowed. Allowability of employer's contribution to ESI payment - Paid beyond the due date but before the date of filing the return of income - HELD THAT:- The Hon'ble Supreme Court in the case of CIT vs. Vinay Cement Ltd. [2007 (3) TMI 346 - SC ORDER] held that the assessee was entitled to claim the benefit of s. 43B for that period, particularly in view of the fact that he has contributed to the provident fund before filing of the return. Respectfully following the precedent we decide this issue in favour of the assessee and against the Revenue. In the result the cross-objection filed by the assessee stands partly allowed.
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