TMI Blog2015 (8) TMI 1446X X X X Extracts X X X X X X X X Extracts X X X X ..... s not advisable to discuss all the parameters in this regard but to leave it to the Revenue authorities to examine the issue in its entirety so as to arrive at the correct judicial decision. It is also worth to mention that the guidelines enumerated in the case of ABG Heavy Industries Ltd. (2010 (2) TMI 108 - BOMBAY HIGH COURT) are required to be followed while deciding this issue. Revision u/s 263 - this is not the case of the assessee that on one hand the Assessing Officer has rightly granted the deduction under section 80IA(4) of I.T. Act and on the other hand there was a change of opinion of learned Commissioner while passing the order under section 263 of I.T. Act. Therefore, after recording these reasons, we are of the conscientious view that the issue should be re-examined by the Assessing Officer - Decided in favour of assessee for statistical purposes - I.T.A. No.115 /Nag/2013 - - - Dated:- 28-8-2015 - Shri Mukul K. Shrawat, Judicial Member And Shri Shamim Yahya, Accountant Member. Appellant by : Shri C.J. Thakar Shri S.C. Thakar. Respondent by : Shri Narendra Kane. ORDER Per Mukul K. Shrawat, J.M.. This is an appeal filed by the assessee arising fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a project developed by the assessee comprising erection of new lines, therefore, entitled for the deduction under section 80IA of I.T. Act. Before the learned Commissioner, the assessee has further pleaded as under : In its written submissions, the assessee says that the A.O. did enquire about the eligibility of the assessee to this claim of deduction u/s 80IA and that vide letter dt. 29.11.2010, an explanation was furnished before the A.O. The assessee is said to be engaged in the business of developing electrical distribution, infrastructure facilities and electricity distribution by laying network of new distribution of high tension and low tension electric lines. The work was allocated by MSEDCL to complete the infrastructure project. The work mainly comprised erection of new lines for the infrastructure development of particular areas. Section 80IA(4) applies to the claim of the assessee. It is in fact a developer and would be understood to be engaged in developing infrastructure facilities which will be maintained by MSEDCL. The Bid documents and the agreements with the MSEDCL making it clear that the assessee is indeed entitled to deduction u/s 80IA. Whether or not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 35 SOT 171 (Mum)(LB) was to be applied on the facts of the case. Learned Commissioner has, therefore, directed the Assessing Officer to disallow the claim of deduction under section 80IA(4) because the assessee had acted only as a contractor. Against the said direction to disallow the claim of deduction, now the assessee is in appeal. 5. From the side of the appellant learned A.R. Mr. C.J. Thakar appeared and at the outset pleaded that while passing the order under section 143(3) the Assessing Officer has thoroughly examined the facts of the case and thereafter came to the conclusion that the assessee is entitled for the exemption under section 80IA(4). Learned A.R. has pleaded that a reply was given to the Assessing Officer during the course of assessment proceedings dated 29th Nov., 2010 wherein it was explained the terms of the contract and the work assigned to the assessee. Copy of the agreement with MSEDCL has also been submitted before the Assessing Officer. It is argued that merely because the term contractor is used in the said development agreement with MSEDCL, there was no restriction on the assessee to explain the correct factual position that the contract was sig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is engaged in the business of developing electrical distribution infrastructure facility and distribution by laying network of new distribution lines in the name style as M/s Manmit Electricals Civil Contractors . In his return of income the assessee has claimed deduction of ₹ 95,30,080/- u/s 80 IA(4)(iv)(b). The assessee has maintained separate trading profit and loss account for the AG turnkey business and for other business not covered under section 80IA.s The assessee has also enclosed audit report u/s 80I of the I.T. Act in Form No. 10CCB (as prescribed in rule 18BBB. The assessee has maintained regular books of accounts and the same have been audited. The audit report in form no. 3CB and 3CD and audited Profit Loss account and Balance sheet have been enclosed with the return. During the course of assessment proceedings assessee s Counsel produced books of accounts, purchase bills, bills/vouchers of expenses etc. and the same were duly verified on test check basis. Bank account statement has been furnished, verified and kept on record. The assessee s Counsel has also furnished various details and the same have been placed on record after verification. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v/s. CIT (2002) {253 ITR 319 (Kewrla). VIII. CIT v/s. T.C. Usha (2003) [264 ITR 368 (Kerala). IX. CIT v/s. Cement Distribution Ltd. (1994) (208 ITR 355 (Del)]. X. Niram Industries Ltd. v/s. ACIT [95 ITD 199 (Ahmedabad)]. XI. Rajkumar Impex (P) Ltd. v/s. DCIT (2008) [15 DTR (Mad) 118]. 7.1 After mentioning few case laws the Assessing Officer has discussed the two expressions used in the statute viz. attributable to and derived from . On the basis of the few judgments the bank interest as itself received by the assessee was not taken into account as eligible income for the purpose of computation of deduction under section 80IA. With the result, the deduction claimed by the assessee of ₹ 95,30,080/- was restricted to ₹ 92,01,893/-. 8. Learned Commissioner has perused the said assessment order but he was of the opinion that instead of considering the correctness of the computation of the said deduction the Assessing Officer was expected to first examine whether the assessee was eligible for the deduction as prescribed under section 80IA(4) of I.T. Act. We have already mentioned the reasons given by learned Commissioner to invoke the provisions of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract between the assessee and MSEDCL was a contract agreement . The assessee was submitting the monthly bills and receiving about 90% of the billing amount. Due to the said reason the learned Commissioner has applied the Explanation inserted by Finance Act, 2007 which was with effect from 01-04- 2000. As per the said Explanation, it is provided in the statute that for removal of doubt it was declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) of section 80IA which is in the nature of works contract . According to us the Revenue Department is expected to examine few things to ascertain whether the assessee is a developer or a contractor such as the utilization of funds, development of project, the nature of venture, the substance of the transaction etc. Moreover the provisions of section 80IA also require a finding to the effect that whether the assessee as an enterprise carried out the business of developing a project or the assessee has developed, maintain and also operating the project. The provisions are applicable in respect of the project which is related to development of infrastructure facility. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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