TMI Blog2008 (6) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;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 en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is directed against the order, dt. 27th March, 2007 passed by the CIT(A)-III, Chennai, and relates to the asst. yr. 2002-03. 2. The solitary issue raised in this appeal relates to the allowability of deduction under Section 80IA of the IT Act, 1961. 3. We have heard the rival submissions in the light of the material placed before us and the precedents relied upon. The assessee is engaged in undertaking contract works for in situ lining for water supply project and anti-corrosive lining. For the relevant assessment year, the assessee filed return admitting a total income of Rs. 64,81,590. It was processed under Section 143(1) of the Act. Subsequently, it was noticed that the claim for deduction under Section 80IA was not maintainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eas 'contractor' is a person or company that has a contract to do work or provides services or goods to another. The benefit of Section 80IA is available only to the developer. It is the condition precedent for the availability of the benefit of this section that the undertaking or enterprise must derive its income from carrying on the business of developing any infrastructure facility. 7. In the facts of the present case, we find that the assessee undertook work on contract basis. The assessee took contract work of in situ cement lining for water supply project of the Gujarat Water Supply and Sewerage Board (Gujarat Government undertaking). 8. Vide Finance Act, 2007, an Explanation was inserted with retrospective effect from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e infrastructure sector and not for the persons who merely execute the civil construction work or any other works contract. Accordingly, it is proposed to clarify that the provisions of Section 80IA shall not apply to a person who executes a works contract entered into with the undertaking or enterprise referred to in the said section. This, in a case where a person makes the investment and himself executes the development work, i.e., carries out the civil construction work, he will be eligible for tax benefit under Section 80IA. In contrast to this, a person who enters into a contract with another person (i.e., undertaking or enterprise referred to in Section 80IA) for executing works contract, will not be eligible for tax benefit under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's contribution to ESI payment, which had been paid beyond the due date but before the date of filing the return of income. 15. We have heard the rival submissions. The Hon'ble Supreme Court in the case of CIT v. Vinay Cement Ltd. (2007) 213 CTR 268 (SC) has held that the assessee was entitled to claim the benefit of Section 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. 16. In the result the cross-objection filed by the assessee in CO. No. 91/Mad/2007 stands partly allowed. ITA No. 1632 /Mad/ 2007: 17. The solitary issue raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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