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Mahalaxmi Construction Corporation Ltd. Versus ACIT, Circle-2, Kolhapur

2015 (12) TMI 616 - ITAT PUNE

Denial of deduction u/s.80IA(4) - whether Government or Statutory body is the developer of infrastructure facility and here appellant is not entitled to deduction under the section? - Held that:- As decided in CIT vs. ABG Heavy Industries Ltd & Ors (2010 (2) TMI 108 - BOMBAY HIGH COURT ) that even in the case before the Hon’ble High Court, the assessee acted as a contractor for Government agency, was held eligible for the purposes of claim of deduction u/s 80IA( 4) of the Income Tax Act. As per .....

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maintains and operates an infrastructural facility. In other words a developer who only develops (i.e., constructs) an infrastructural facility is not envisaged to operate and maintain such facility, cannot be accepted to fulfil the condition in clause (c) of sec. 80IA( 4) since it would be an impossibility. Therefore, in view of the construction placed by the Hon’ble Bombay High Court on the requirements of clause (c) of sec. 80IA( 4)(i) requiring it to be harmoniously read with the main sec. 8 .....

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5 and 2005-06 respectively. For the sake of convenience, both the appeals were heard together and are being disposed of by this common order. 2. Although a number of grounds have been taken by the assessee for both the assessment years, however, they all relate to the order of the CIT(A) in upholding the denial of deduction u/s.80IA(4) of ₹ 84,02,555/- for Assessment Year 2004-05 and ₹ 1,46,85,364/- for Assessment Year 2005-06 respectively. 3. Facts of the case, in brief, are that th .....

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of the Tribunal in assessee s own case for A.Y. 2003-04 upheld the order of the CIT(A) and dismissed the appeal filed by the assessee. 4. Similarly for Assessment Year 2005-06 the AO disallowed claim of deduction of ₹ 1,46,85, 364/- u/s.80IA(4) in the order passed u/s.143(3) dated 25-04-2007 which was upheld by the CIT(A) vide order dated 16-11-2007. The Tribunal vide order dated 25-11-2010 following the order for A.Y. 2003-04 in assessee s own case vide ITA No.433/PN/2007 order dated 24- .....

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he Assessee has in respect of assessment year 200506 raised the following question of law for our consideration. Whether on the facts and in the circumstances of the case on a proper and reasonable interpretation of S.80IA(4), the Tribunal is right in holding that Government or Statutory body is the developer of infrastructure facility and here appellant is not entitled to deduction under that section? 3. The Tribunal, while dismissing the Assessee s Appeal followed its order for assessment year .....

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l, for fresh decision in accordance with law. 4. All the contentions of the parties are kept open to be urged before the Tribunal. 5. The appeal is accordingly disposed of with no order as to costs. (Identical order has been passed by the Hon ble High court for A.Y. 2005-06) 6. We have considered the rival arguments made by both the sides. We find after the order for A.Y. 2003-04 was set aside by the Hon ble Bombay High Court to the file of the Tribunal, the Tribunal vide ITA No.433/PN/2007 orde .....

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ase of B.T. Patil & Sons Belgam Construction (P) Ltd vs. ACIT 126 TTJ (Mum) (TM) 577. The Hon ble High Court has observed that it is not in dispute that the said decision of the Tribunal in the case of B.T. Patil & Sons (supra) has been recalled by the Tribunal by order dated 18.2.2011 as evident from the order passed by the Tribunal in ITA No.766/PN/2009 dated 8.6.2011. The Hon ble High Court has accordingly quashed and set aside the impugned order of the Tribunal dated 24.2.2010 passed .....

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sion which was urged on behalf of the Revenue is that under cl. (iii) of subsec. (4A) of sec. 80IA, one of the conditions imposed was that the enterprise must start operating and maintaining the infrastructure facility on or after 1st April, 1995. The same requirement is embodies in subcl. (c) of subsec. (4) of the amended provisions of sec. 80IA. On this basis, it was urged that since the assessee was not operating and maintaining the facility, he did not fulfil the condition. This submission i .....

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st April, 1995. After sec. 80IA was amended by the Finance Act of 2001, the section applied to an enterprise carrying on the business of (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining any infrastructure facility which fulfils certain conditions. Those conditions are : (i) Ownership of the enterprise by a company registered in India or by a consortium; (ii) An agreement with the Central or State Government, local authority or statutory body; and .....

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ect and intent underlying the amendment of the provision by the Finance Act of 2001 would be defeated. A harmonious reading of the provision in its entirety would lead to the conclusion that the deduction is available to an enterprise which (i) develops; or (ii) operates and maintains; or (iii) develops, maintains and operates that infrastructure facility should be after 1st April, 1995. In the present case, the assessee clearly fulfilled this condition. 23. In view of which we have taken, all t .....

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ance Act of 2001, we have already noted that the consistent line of circulars of the Board postulated the same position. The amendment made by Parliament to sec. 80IA( 4) of the Act set the matter beyond any controversy by stipulating that the three conditions for development, operation and maintenance were not intended to be cumulative in nature. 9. We find from the decision of Hon ble Bombay High Court in aforesaid case of CIT vs. ABG Heavy Industries Ltd & Ors (supra) that even in the cas .....

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