9911796707
TMI Blog2024 (1) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... s. M.S. Khurana Engineering Ltd. under the name and style of NCC-KSKEL. The assessee submitted a bid for works relating to construction of New Domestic Arrival Block at Ahmedabad to the Airports Authority of India, New Delhi. The contract for construction of new Domestic Arrival Block at Sardar Vallbhbhai Patel International Airport, Ahmedabad was awarded to the assessee vide working order dated 08.05.2006. 3. For A.Y. 2007-08, the Ld. CIT(A) dismissed the appeal of the assessee on the ground that the assessee is not eligible for deduction under Section 80-IA(4) in view of Explanation inserted in the Act by Finance Act 2009 with retrospective effect from 01-04-2000 and therefore, he confirmed the disallowance of Rs. 1,28,29,000/- made by the Assessing Officer. The assessee is in appeal against the aforesaid order passed by Ld. CIT(A) dismissing the appeal of the assessee and confirming the disallowance of claim of deduction under Section 80- IA(4) of the Act. 4. For A.Y. 2008-09, Ld. CIT(A) allowed the appeal of the assessee on the same set of facts and held that the assessee qualifies as a "developer" and is eligible for claim of deduction under Section 80- IA(4) of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first issue for consideration before us is that whether contracts given by Airports Authority of India (AAI) are eligible for grant of deduction under Section 80-IA(4) of the Act. 9. For A.Y. 2007-08, the Ld. CIT(A) held that one of the reasons why the assessee is not eligible for claim of deduction under Section 80- IA(4) of the Act is that the assessee has not entered into a contract with Government of India towards construction of new Domestic Arrival Terminal at Ahmedabad Airports. The issue for consideration therefore is that whether contracts granted by Airports Authority of India would be eligible for claim of deduction under Section 80-IA(4) of the Act. 10. We observe that Section 80-IA(4)(i)(b) of the Act states that the assessee can enter into an agreement with Central Government or a State Government or a Local Authority or any Statutory Body for development of new infrastructure facility. The relevant extracts of Section 80-IA(4) of the Act are reproduced for ready reference:- "(4) This section applies to- ..... (b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of deduction under Section 80-IA(4) of the Act. The Gujarat High Court held that the CIT(Appeals) has given a detailed factual finding that the projects assigned to the assessee were executed in the capacity of a "developer". The Ld. CIT(A) gave a categorical finding that entire investment in the project was to be made by the assessee, interim payment to the tune of estimated contract value in respect of the development work done for each month after retention and other adjustments, were to be made to the assessee, security deposit was to be paid by the assessee, there was penalty for delay by the assessee in completion of the project, procurement of the material was the responsibility of the assessee, procurement of land for camp, for shop, labour camp etc. and also the employment of qualified engineers, action and compensation in respect of bad work, defect liability of the accidents to persons in relation to Workman Compensation Act, indemnity insurance of the workmen employed etc. were all the responsibility of the assessee. Accordingly, the Gujarat High Court held that the Ld. CIT(A) and Tribunal considering such aspects of the tender agreement, concurrently held that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue for consideration is whether the assessee has undertaken the necessary financial and entrepreneurial risk so as to qualify as a "developer", or is it a case that the assessee is merely acting on the directions of AAI wherein complete responsibility for finance, man-power, scope of work, penalty provisions etc. are to be borne by AAI and assessee is only working at the behest and under the control and directions of AAI. In this case, we observe that the assessee has furnished bank guarantee to AAI (refer Pages 51-61 of the Paper Book), the assessee has furnished detailed program and CPM work diagram to AAI for its approval (refer Pages 51-61 of the Paper Book), the assessee has prepared and submitted electrical layout drawing for site office (refer Pages 69-70 of Paper Book), the assessee has prepared various other designs like curtain glazing wall (refer Pages 72-98 of Paper Book), honey comb panels designs (refer Pages 99-103 of Paper Book), design for air handling unit Duct & Pipe (refer Pages 104-124 of the Paper Book) etc. Further, the assessee has also undertaken to provide all materials for the project at it's own expenses (other than those which are supplied by AAI) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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