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2015 (8) TMI 324 - ITAT PUNE

2015 (8) TMI 324 - ITAT PUNE - TMI - Eligibility for deduction u/s.80IA(4) - Held that:- The question that arose between the parties was, whether the assessee could be said to be a developer of such project. The authorities below on facts came to the conclusion that the assessee could be said to be a developer as contemplated by section 80IA(4). We have noticed that the authorities below have considered facts quite meticulously by minutely going through the terms of the contract and came to an u .....

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, AM : This appeal filed by the assessee is directed against the order dated 13-09-2013 of the CIT(A)-II, Nashik relating to A.Y. 2009-10. 2. Facts of the case, in brief, are that the assessee is a limited company engaged in a variety of activities such as undertaking of contract work relating to infrastructure projects like water supply and lift irrigation project, road constructions contract on BOT basis, manufacturing of PSC pipes, trading in MS plates and pipes etc. The assessee filed the re .....

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cessor for A.Y. 2007-08 wherein similar disallowance was made for the following reasons : i. The assessee company is only a contractor and not a developer of any infrastructure project. ii) There is no clause in tender document/agreement by which the ownership of the land or any property is entrusted to the contractor i.e. the assessee company. iii) The drawings and designs of the projects have been prepared by the contractees and have not been prepared by the assessee company. iv) The assessee .....

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in the case of CLT Vs. ABG Heavy Industries Ltd. and Ors. are distinguishable on facts. 3. In appeal the Ld. CIT(A) following the order for A.Yrs. 2007-08 and 2008-09 in case of the assessee allowed the claim of deduction u/s.80IA(4) of the I.T. Act. 4. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us with the following grounds : 1. On the facts and in the circumstances of the case, the CIT(A) erred in relying on the decisions of Hon'ble ITAT Pune in the cases of L .....

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iate the fact that on being confronted by the Assessing officer during assessment proceedings for A.Yr.2009-10 regarding eligibility for deduction u/s.80IA(4), assessee voluntarily revised its claim of deduction from ₹ 15,33,36,705/- to ₹ 10,92,36,658/-. The CIT has erred in allowing deduction u/s 80(IA)(4) ₹ 10,92,36,658/- 4. On the facts and in the circumstances of the case, the CIT(A) has not appreciated the fact that survey action u/S.133A was conducted in assessee's ca .....

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efore the Tribunal in assessee s own case for A.Yrs. 2007-08 and 2008-09 where the claim of deduction u/s.80IA(4) which was denied by the AO was allowed by the CIT(A) and on further appeal the Tribunal dismissed the appeal filed by the Revenue by observing as under : 3.3 After going through the rival submissions and material on record, we find that the Revenue has challenged the order of the CIT(A) who has held that the assessee was developer and entitled to claim deduction under section 80IA(4) .....

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ndia as all such infrastructure work is awarded by Govt. & Semi govt. Departments to developer contractors through tenders and thereafter entering into contract for the work with the developers. In case the Assessing Officer's contention is accepted then certainly provision for allowing deduction u/s. 80IA(4) for developing infrastructure shall become redundent". The Assessing Officer has ignored the decision of the ITAT Pune Bench - in the case M/s Pratibha Construction & Engin .....

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red the contract received from JMC and preliminary condition of designing and drawing essential for developer is lacking and therefore the assessee company could not be called to be a developer. 3.5 CIT(A) held that the Assessing Officer has erred by misunderstanding the conditions eligible for deduction specified u/s 80IA(4). What is eligible for deduction u/s 80IA(4) is the profits and gains derived from development of infrastructure facility, such as road project, airport, port inland waterwa .....

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and the proper execution of the project by devoting part of their time. By any stretch of imagination it cannot be accepted/perceived that the said 2/3 engineers/officers have executed the said infrastructure project of water supply and lift irrigation. The Assessing Officer has not justified to hold that the work has been executed by JMC as developer and the appellant is a mere contractor. 3.7 As regards preparation of design and drawing of the project it is evident form the following documents .....

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design and drawings of all components of the work stated in Annex A. The contractor/consultant shall use guide lines in the relevant ISI codes/CDO codes prepared by ISI/CDO for various components of the project in the lift irrigation scheme. 2) CPWD manual relevant papers at page Nos. 74 & 75. 3) Letter dated 24-08-2006 filed with Supdt. Engineer(PHs), Central Designs Organisations, Nashik. 4) Letter dated 07-10-2006 issued by Chief Engineer, Nagpur to the appellant. 5) Letter dated 13-10-2 .....

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laimed deduction u/s 80IA(4) in respect of profit on infrastructure projects of water supply and lift irrigation Project. As stated above Assessing Officer has disallowed deduction in respect of water supply and lift irrigation projects on the ground that the appellant was a contractor and work executed by it was covered under 'works contract' and hence deduction was not admissible in view of Explanation to Section 80IA introduced by Finance Act, 2007 and amended by Finance Act 2009 with .....

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s given a detailed analysis of appellant's contract with Jalgaon Municipal Corporation (JMC) in the assessment order for A. Y. 2008-09 and also referred to the statement of Dy. Engineer JMC recorded on oath wherein he is stated to have told that the project with JMC was a "works contract". On the basis of the contract document and the above referred statement of Dy. Engineer, JMC, AO held that the appellant did not fulfill the conditions of S. 80IA(4) of the Act. She disallowed the .....

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f the appellant was similar to that of Laxmi Civil Engg. (P) Ltd and Mahalaxmi Corporation i.e. the nature of work was also more or less similar. The similarities in the tender documents pertaining to the projects undertaken by these persons suggest that the terms and conditions were by and large identical. Further, tender document for Goshikhurd Project awarded to Om Metal Infra by VIDC proves that it was for irrigation work and the terms and conditions were akin to that of Mokabardi Irrigation .....

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Act are squarely applicable to the appellant's case. Nothing contrary was brought to our knowledge on behalf of revenue. In view of above judicial precedents the appellant has rightly been held eligible for deductions u/s. 80IA (4) of the Act in respect of the infrastructural projects undertaken by it during Ays 2007-08 and 2008-09. We uphold the same. 6. We find on further appeal filed by the Revenue against the order of the Tribunal, the Hon ble Bombay High Court vide ITA No.106 and 107 of .....

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