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2015 (6) TMI 635 - ITAT AHMEDABAD

2015 (6) TMI 635 - ITAT AHMEDABAD - TMI - Disallowance of deduction claimed u/s 80IA(4) - CIT(A) deleted addition - Held that:- As dedcided in assessee's own case [2012 (4) TMI 563 - ITAT AHMEDABAD] the obligations which the assessee assumed under the terms of the contract were not merely for supply and installation of the cranes, but involved a continuous obligation right from the supply of the cranes to the installation, testing, commissioning, operation and maintenance of the cranes for a ter .....

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ree of cost. The finding that the assessee had developed the infrastructure facility and that it was engaged in operating the cranes was, therefore, based on the material on record. The fact that the assessee was also maintaining the cranes was not disputed. The facility was commenced after April, 1995. The assessee was entitled to the special deduction under section 80-IA - Decided in favour of assessee. - ITA No.1593/Ahd/2011 - Dated:- 10-6-2015 - Shri Shailendra Kumar Yadav and Shri Anil Chat .....

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(4) without appreciating the material facts that for eligible of deduction u/s 80IA(4), the assessee must fulfill the prime condition that The assessee must be owner of the infrastructure facilities , within the meaning of section 80IA(4) of the Act and assessee had failed to fulfill the said prime condition. 2. The assessee company is engaged in the business of consulting of pollution control and environmental related works, erection and commissioning of plant and also providing service of the .....

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re. In response to the notices the assessee filed written submissions. After considering the submissions of assessee the AO rejected the claim of the assessee and made addition of ₹ 66,53,384/- on account of disallowance of claim u/s 80IA(4) of the Act for the following reasons :- 1. The assessee company has claimed deduction of ₹ 66,53,384/- in respect of the income derived from the business of work contract which was awarded by some other person and executed by the assessee company .....

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DR supported the order of AO and submitted that the ld. CIT(A) has wrongly deleted the addition. Therefore, the order of ld. CIT(A) be set aside and that of the AO be restored 5. On the other hand the ld. AR supported the order of ld. CIT(A). She submitted that the issue is covered in favour of assessee by the order of the Tribunal in ITA Nos. 2902/Ahd/2008 for AY 2005-06 and others dated 30/4/2012. She placed on record a copy of the Tribunal s order in ITA No.2902/Ahd/2008 for AY 2005-06 and o .....

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in the past, however for the year under consideration,i.e.A.Y.2005-06, the section substituted by the Finance Act, 2001 w.e.f. 1/4/2002 is applicable. This section prescribes that in respect of profits and gains from an Industrial Undertaking engaged in infrastructure development; a deduction of an amount equal to 100% of the profits shall be allowed. Section 80IA(4) prescribes that an Enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, op .....

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d to the said section; infrastructure facility is defined as road, bridge, rail system, high-way project, irrigation product, sewerage system or solid waste management system . With these submissions of legal requirement, our attention has been brought on the fact that the assessee has developed the infrastructure meant for solid waste management system . The assessee has entered into an agreement with the Municipal Council Udaipur (Rajasthan) dated 15/07/2004. The assessee has also entered into .....

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ench in the case of Patel Engineering Ltd. 94 ITD 411(Mum.)cited-supra. We are convinced with the argument of the ld.AR that a contractor can also be a developer. In this context, our attention has been drawn on a latest decision of Hon ble Gujarat High Court pronounced in the case of CIT vs. Radhe Developers (2012)341 ITR 403 (Guj.), wherein the ITA Nos.2902,3077-08,1798-09,934, 1194-10, 1596-11 and CO 177-11 (Assessee s appeals & Revenue s Appeals) [ En-vision Enviro Engineers P.Ltd. vs. D .....

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ch wider connotation. As far as the agreement with Surat Municipal Corporation is concerned, the assessee has been referred as party of the first part , hence no serous objection has been raised by the Revenue. On account of these reasons and following the view expressed by the Hon ble Court as also considering the nature of the work executed by this assessee, we are not inclined to agree with the AO that the assessee has acted merely as a contractor , rather, we hereby hold that the assessee ha .....

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ase for thirty years. Only a token Re.1/- is charged as lease amount. We have also noted that vide clause(v) the Collector is authorized to observe the operation and maintenance of the facility. But it does not mean that the Municipal Council has financed the said project. This clause is meant only for supervision of the operation & maintenance. Therefore, according to us, it is a far fetched proposition on the part of the Revenue to argue that the entire project has been developed by the Mu .....

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e. One of the clauses says that the treated bio-medical waste shall be disposed-off along with other municipal solid waste. The transportation of the waste is to be carried out by the assessee. The clauses have also provided that for collection, transportation, storage and disposal of bio-medical waste after treatment within specified time shall be the responsibility of the assessee. However, the assessee has been entitled to use or sale any of the bio-product. 7.3. We have also examined the oth .....

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- per square meter per annum, the said agreement was entered into for seven years. The assessee is to make the construction on the land as per the approved plans. The assessee has to install necessary equipment and machinery. One of the clauses is very clear that En-Vision shall bear all the expenses for putting up the said plan . The assessee is entitled to charge for treatment of waste per kg. as fixed by Municipal Corporation from time to time. One of the clauses, thus is clear that the rate .....

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vices rendered to various hospitals and the amount of bill represented payment attributable to waste treatment and not in respect of any construction or development. We have also seen the invoices and the description therein was also bio-medical waste treatment facility . Because of this reason, we are not inclined to accept the allegation of the Revenue Department that since on TDS certificate the assessee has been mentioned as Contractor , therefore the assessee has not acted as a Developer . .....

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claimed depreciation which was also allowed to the assessee by the Revenue Department. 8.2. With this factual background, we have perused the decision of ABG Heavy Industries Ltd. 322 ITR 323(Bom.), wherein scope of the provision of section 80IA have been discussed and held as under:- The obligations which had been assumed by the assessee under the terms of the contract were obligations involving the development of an infrastructure facility. Section 80-IA of the Act essentially contemplated a d .....

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