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TMI Blog2016 (8) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... o, he had recorded the following reasons : "M/s. Avadh NILP(JV),Rajkot (PAN:AAQFA7091P), Rajkot, AY 201011: In this case, return of income for the AY 201011 showing income of Rs.NIL/was filed by the assessee and the assessment was finalized vide order u/s 143(3) of the IT Act dated 24.3.2013. The assessee has claimed deduction of a sum of Rs. 70,52,150/- u/ s. 80IA(4) of the IT Act. After finalization of the assessment, it was noticed it is further seen that, the Ex.Engg Valsad had entered into an agreement with M/s. Avadh Infrastructure Pvt. ltd for construction of "NagroBridge" at Valsad and worked awarded vide order dtd. 12.06.2009. However, M/s. Avadh Infrastructure Pvt. Ltd. and Narayan Infra Pvt. Ltd has constituted a joint venture in the name of M/s. Avadh NIPL (JV) vide partnership deed dated06.11.2009. Thereafter, the assessee firm (JV) had carried out the construction work of bridge on behalf of the M/s. Avadh Infrastructure Pvt. It is seen that the receipts in the case of assessee mainly consist of works contract with the Govt./Semi Govt. Bodies. On perusal of computation of income filed along with the return of income, it is noticed that the assessee has claimed a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available to a developer of the infrastructural facilities as provided within the meaning of the said section and not to the contractors who simply execute work as per work contract received from either Central Govt. or State Govt. or any other agency. The Explanation, below sub section (13) of section 80IA, as inserted by the Finance Act, 2009 with retrospective effect from 01.04.2000 has only clarified that the deduction is not available to business referred to in subsection (4) which is in the nature of a works contract awarded by any person (including the Central or State Government) and executed by an enterprise referred to in subsection( 1). The argument as to whether a contractor is a 'developer' within the meaning of the above provision of the Act has only been put to rest by providing an explicit clarification which leaves no scope for any ambiguity as regard the issue that the contractors are not developers within the meaning of subsection (1) of section 80IA and hence, they are not eligible for deduction in respect of their business income from executing work orders as per contract with either Central Govt. or State Govt. or any other agency. The explanation doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer on 9.5.2016. 4. Having taken us through the materials on record and the reasons recorded by the Assessing Officer, counsel for the petitioner submitted that there was no failure on part of the assessee to disclose truly and fully all material facts. Reopening of assessment beyond a period of four years was therefore, not permissible. Even otherwise, entire issue was examined by the Assessing Officer during the original scrutiny assessment. Any attempt on his part to now reopen the assessment would not be permissible. 5. On the other hand, learned counsel Shri Desai for the department submitted that the petitioner had raised wrong claim. Deduction under section 80IA(4) of the Act would not be available for carrying out the works contract since the petitioner was not engaged in development of the specified project. 6. The Assessing Officer had recorded elaborate reasons. Crux of the reasons however, is brief namely, that the assessee who claimed deduction of Rs. 70.52 lacs under section 80IA(4) of the Act was not eligible for such deduction on the ground that it was not carrying on the business of developing or operating and maintaining or developing, operating and mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e eligible business. Please furnish the same. (v) Contract wise details in following proforma along with working of 80IA of the Act. Sl No. Particulars of the contract/project Amount of profit earned (Rs.) Nature of work done Please furnish consolidated contract income account." 9. In response to such query, the petitioner replied under letter dated 12.2.2013 as under : "1. The assessee is a partnership firm. The firm is mainly established to construct a bridge across Nargol Creek near Nargol village on NargolDehriGowada road upto M.S. Border CSH6 Dist Valsad. Accordingly, during the previous year and earlier years, construction work of the same has been done." 10. It was after such scrutiny that the Assessing Officer framed the assessment on 24.3.2013 in which he observed as under : "3. During the course of assessment proceedings, details were called for regarding fulfillment of conditions for claim of deduction u/s 80IA of the Act. The assessee is a partnership firm came into existence with effect from 12.6.2009, is an enterprise of two partners (1) Avadh Infrastructure Pvt. Ltd. (2) Narnarayan Infrastructure Pvt. Ltd. had jointly applied to the Executive Engine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or by the Assessing Officer. Even the reasons recorded by the Assessing Officer for issuing notice for reopening do not even indirectly suggest that there was any failure on part of the assessee to disclose true and full facts. In fact, the reasons rely solely on the materials already on record. In earlier portion of the reasons, the Assessing Officer noted that "After finalization of the assessment, it was noticed it is further seen that..." Further in paragraph no.4, the Assessing Officer recorded that the details of work carried out by the assessee were called for during the course of assessment proceedings and on verification of the details it was seen that the assessee had been executing works contract. On the basis of such materials, the Assessing Officer recorded that assessee was not eligible for deduction under section 80IA(4) of the Act. He further recorded that "However, this issue seems to have not been properly examined by the Assessing Officer while finalizing the assessment." 13. It can thus be seen that the Assessing Officer merely desires to revisit the claim which was granted after full scrutiny in the original assessment. His opinion that the claim was not prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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