TMI Blog2021 (3) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 27,31,67,167/- u/s 80IA(4) of the Income Tax Act, 1961 (hereinafter referred to as the Act) claimed by the assessee. 3. Brief facts as noted by the AO was that the assessee company has claimed deduction u/s 80IA(4) of the Act for the profit from development of infrastructure project amounting to ₹ 27,31,67,167/-. The AO show caused the assessee to as to why the deduction should be allowed u/s 80IA(4) of the Act. The AO acknowledges that the assessee submitted a detailed reply to it explaining how it qualifies for deduction u/s 80IA(4) of the Act. However the AO disagreed with the explanation adduced by the assessee and according to AO in view of the explanation inserted below Section 80IA(13) with retrospective effect from 01.04.2008 has over-riding influence and debars the assessee s claim, because, the assessee s claim of deduction u/s 80IA(4) are in relation to business in the nature of works contract. And thereafter he referred to the explanation to Sub-section (13) to Sec. 80IA which reads as under: For the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to CH: 6373 M for Noapara (excluding)- Baranagar-Dakshineswar of Kolkata Metro in the state of West Bengal, India which essentially falls within the meaning of infrastructure facility as contained in clause (a) of the Explanation, reproduced as under: Explanation: For the purpose of this clause, infrastructure facility means- (a) A road including toll road, a bridge or a rail system; And he drew our attention to the agreement which is enclosed at pages 686 to 791 of the paper book and on a perusal of the same, we note the following duties and responsibilities of the assessee is as under:- Electricity, Water and gas - The assessee shall be responsible for making his own arrangements at his own cost to obtain supply of water, electricity and/or gas for the works. Sheds, stores, yards - It shall be the responsibility of the Contractor-assessee to provide at his own expense the required sheds, store houses, and yards for both permanent and temporary works and provide free access to the engineer and the engineer s representative who will have right of inspection including that of instructing the Contractor to remove a particular material from the stores and not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... local health authorities, ensure that medical staff, first aid facilities, sick bay and ambulance service are available at the accommodation and on the site at all times, and that suitable arrangements are made for all necessary welfare and hygiene requirements and for the prevention of epidemics. Delivery to site - The Contractor-assessee shall be responsible for procurement, transport, receiving, uploading and safe keeping of all plant, construction, materials, contractor s equipment and other things required for the completion of the works. Testing - The Contractor-assessee shall provide all documents and other information necessary for all types of testing and such assistance, labour, materials, electricity, fuel, stores, apparatus and instruments as are necessary to carry out such tests efficiently. 7. From the aforesaid activities undertaken by the assessee we note that the contractor assessee s activities involves substantial risk. It is noted that like any other entrepreneur who employs his material, plant, machinery, labour etc. in a project and undertakes risk, the assessee was also exposed to substantial amount of risk by virtue of engaging his establishment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d assessee for development of such housing project did not mean that assessee did not develop residential project, disentitling it to deduction u/s 80IB(10) of the Act. The SLP filed by the Department against the impugned order was dismissed by the Hon ble Supreme Court ruling that where assessee, after development of infrastructure facility project, thereafter transferred the same to Government for which it was paid cost plus margin of income by Government, it would be entitled to deduction u/s 80IB of the Act. It may be noted here that although the above-said decision relates to the claim of deduction under section 80IB(10) of the Act, yet, the ratio upheld in the above-said case that where assessee has been awarded contracts as turnkey projects and has been entrusted with the full responsibility of execution and completion of work for .which the assessee has to undertake huge risks in terms of deployment of technical personnel, plant and machinery, technical knowhow, expertise and financial resources it can be said that the assessee is engaged in development of infrastructure facility, fully applies in the case of the assessee. 9. In the instant case, as will be evident from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 2850 N.F. Railway Bridge 1,76,74,691 Already considered and adjudicated by the Tribunal in AY 2015-16. 3 2879 N.F. Railway Bridge 2,37,73,102 Already considered and adjudicated by the Tribunal in AY 2015-16. 4 2931 PHED Water supply 10,44,94,221 Already considered and adjudicated by the Tribunal in AY 2015-16. 5 3004 RVNL METRO 89,88,711 New Project 6 2105 NHAI Road 8,49,92,690 Already considered and adjudicated by the Tribunal in AY 2015-16. 27,31,67,167 11. We note that the assessee s own case for AY 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereby the claim of assessee for deduction u/s 80IA(4) was allowed in the previous years. In the relevant assessment year AY 2016-17, as we discussed, the assessee s claim of deduction u/s 80IA(4) of the Act is in addition to the five (5)) projects which had already under gone our scrutiny in the earlier assessment years and has been allowed. So out of the total claim of deduction of ₹ 27,31,67,167/-, the claim of ₹ 26,41,78,456/- [i.e. ₹ 27,31,67,167 ₹ 89,88,711] is continuing from earlier years and the Tribunal has upheld the claim in respect of ₹ 26,41,78,456/-. So in this relevant assessment year i.e, AY 2016-17, the fresh claim is in respect of project/contract No. 3004 which is in respect of agreement between Assessee Company and RVNL, and which pertains to Metro railway Infrastructure. In respect of this project (Metro) we note that the assessee in its submission before the Ld. CIT(A) has explained the nature of the projects the responsibilities, risks and duties of the assessee company. The Ld. CIT(A) has taken note of these facts which are found noted by him at pg 3 to 20 of his impugned order. We have carefully gone through the content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in its order dated 08.02.17 in ITA No.1840/Kol/2014 held as follows: 8. ...At the outset we find that the instant issue is covered in favour of assessee in its own case by the order of Hon'ble Kolkata Tribunal in ITA NO.2168/Kol/2013 vide order dated 08/02/2017 .. 9. We also find that the facts of the case of the assessee are identical as that of the above case of the assessee's own case (supra). In the light of above reasoning, we hold that the order of the Ld. CIT(A) is correct and in accordance with law and no interference is called for. We uphold the same. Hence, this ground of Revenue's appeal is dismissed. 14. As already stated for the AY 2011-12 and A.Y 2012-13, the Tribunal restored the matter to the file of the Assessing Officer, and the Assessing Officer after examining the terms and conditions of the contract and nature of the projects and various risks undertaken by it had granted deduction 80IA(4) of the Act as claimed by the assessee in an order passed u/s 143(3) r.w.s. 251 of the Act dated 11.07.2017. 15. The Ld. CIT(A) in this assessment year has followed the earlier order of Tribunal in assessee s own case and gave relief to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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