TMI Blog2022 (1) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... y the state government s department on periodic basis, and, then only it executed the corresponding lift irrigation project works contract followed by its yet another claim of section 80IA of the Act deduction - We accordingly conclude both the learned lower authorities have rightly disallowed assessee's 80IA deduction claim involving varying sum(s) in their respective orders. The same stands confirmed. Section 80IA s Explanation(s) is squarely attracted herein that even if the assessee itself is treated as the developer under sub-section (4) of the very provision, the impugned claim shall be hit by the foregoing Explanation as its business is in the nature of a works contract only. Reliance placed on all earlier orders (supra); not considering the statutory Explanation(s) , are not forced to be binding precedent in light of CIT Vs. B.R. Constructions [ 1992 (6) TMI 13 - ANDHRA PRADESH HIGH COURT ] - Decided in favour of revenue. - ITA No.1331 to 1333/Hyd/2017, ITA Nos.1340 to 1342/Hyd/2017 - - - Dated:- 9-12-2021 - SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER For the Assessee : Shri B. Shanti Kumar and Shri Mohan Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, and in law, the Ld. CIT(A) has grossly erred in extrapolating the clarification in CBDT CircularNo.4/2010 dated 18-05-2010 which was meant exclusively for road projects onto irrigation projects. The said Circular exclusively deals with road projects. There is nothing in it to suggest its applicability to irrigation projects. 6. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in not appreciating that the most of irrigation/canal work undertaken by the assessee are in the nature of repairs, renovations and reconstruction of the existing facility and thus do not constitute new infrastructure facility. 7. The appellant craves leave to amend or alter any ground or add any other grounds which may be necessary. 3. The assessee s cross appeal ITA 1340/Hyd/2017 raises the following substantive grounds : 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous to the extent it is prejudicial to the appellant. 2. The learned Commissioner of Income Tax (Appeals) erred in not directing the Assessing Officer to allow deduction u/s 80IA(4) of the I.T. Act in respect of the following projects : a) U-11, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a designed, developed as well as ensured maintenance of the projects as per warranty clause within specified period. The assessee further sought to highlight the fact that the Board s circular (supra) had also entitled an entity engaged in road widening to be a developer only u/s 80IA(4) of the Act. 6. We have given our thoughtful consideration to rival contentions and find no merit in the assessee s foregoing arguments supporting the CIT(A) s action holding it partly eligible for the impugned section 80IA deduction relief. There is hardly any dispute about the assessee having undertaken irrigation and road projects from the concerned government departments in the nature of works contract only wherein it not only received mobilization advances in the initial stage but also there was no risk element involved as it had to carry out the construction of the irrigation project or and widening the road (supra) concerned as per the specific terms and conditions and prescribed specifications only. We notice in this factual backdrop that this tribunal s recent co-ordinate bench s decision in M/s. NEC NCC MAYTAS JV Vs. DCIT (supra) has considered the Explanation regarding works c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee s first argument is rejected therefore. 10. We next examine the merits of the assessee's claim in light of section 80IA(4) r.w. Explanation ( c ) thereof. This is for the reason that the legislature has reintroduced the Explanation; formerly inserted by the Finance Act, 2007 w.e.f. 1.4.2007 that For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a person who executes a works contract entered into with the undertaking or enterprise as the case may be, followed by its substitution by the Finance Act, 2009 w.e.f. 1.4.2000 that 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 subsection (4) which is in the nature of a works contract awarded by any person (including the central or state government) and executed by the undertaking or enterprise referred in sub-section (1). 11. Learned CIT-DR at this stage quoted Katira Constructions Limited Vs. Union of India and Others (2013) 352 ITR 513 (Guj) upholding vires of the latter explanation that the same is purely explanatory in nature than amending the existing provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislature are to be understood in their natural, ordinary or popular sense or constructed as per their grammatical meaning unless such a construction lead to some absurdity or there is something in the context or in the object of the statute to the contrary. 13. We go by the foregoing observations of their lordships and observe that the stages I II of the Bhima Lift Irrigation project undertaken by the assessee containing all the civil works like canal approach to the tunnel, tunnel, surge pool pump house, delivery mains manufacturing, testing, inspection, packing, supply, erection and commissioning of electro mechanical and hydro mechanical equipment indeed formed an architectural as well as engineering structure and therefore, amounts to an execution of a works contract awarded by the state government through its irrigation development only and covered u/s. 80IA Explanation incorporated in the Act by the Finance Act, 2009 w.e.f. 1.4.2000. Learned CIT-DR at this stage invited our attention to page 18 in assessee's Paper Book II Part 1 that it had purely executed works contract only in view of the fact that the irrigation department had issued it mobil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the baker that we expect our dinner, but from their regard to their own interest. 17. Nevertheless, the same connotation applies in the facts of the instant case. It is clear that the assessee has first of all been paid mobilization advances by the state government s department on periodic basis, and, then only it executed the corresponding lift irrigation project works contract followed by its yet another claim of section 80IA of the Act deduction (supra). We are afraid that such a liberal interpretation would amount to going against the stricter interpretation principle in view of honourable apex court decision (supra). We accordingly conclude both the learned lower authorities have rightly disallowed assessee's 80IA deduction claim involving varying sum(s) (supra) in their respective orders. The same stands confirmed. These assessee's appeals are dismissed therefore. 7. We thus hold that section 80IA s Explanation(s) is squarely attracted herein that even if the assessee itself is treated as the developer under sub-section (4) of the very provision, the impugned claim shall be hit by the foregoing Explanation as its business is in the nature of a works cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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