ACIT, Circle-12(2), Kolkata, Kolkata V. M/S. Simplex Infrastructure Ltd., Kolkata

ITA 1/KOL/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3433 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-03-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 02-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MITHILESH KR. JHA
• Keywords: Retrospective amendment
• Section: 2; 143(3); 80IB; 80IA; 251; 20

Judgement Text

ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 1 | P A GE , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI A. T. VARKEY, JM] I.T.A. NO. 01/KOL/2020 ASSESSMENT YEAR: 2016-17 ACIT, CIRCLE-12(2), KOLKATA VS. M/S SIMPLEX INFRASTRUCTURES LTD. (PAN: AAECS 0765 R) APPELLANT RESPONDENT DATE OF HEARING 02.03.2021 DATE OF PRONOUNCEMENT 10.03.2021 FOR THE APPELLANT SHRI MITHILESH KR. JHA, CIT FOR THE RESPONDENT SHRI RAVI TULSIYAN, CA ORDER PER SHRI A. T. VARKEY, JM: THIS APPEAL PREFERRED BY THE REVENUE IS AGAINST T HE ORDER OF LD. CIT(A)-4, KOLKATA DATED 16.09.2019 FOR ASSESSMENT YEAR 2016-1 7. 2. THE SOLE ISSUE RAISED BY THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN ALLOWING THE DEDUCTION OF RS. 27,31,67,167/- U/S 80 IA(4) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) CLAIMED B Y THE ASSESSEE. 3. BRIEF FACTS AS NOTED BY THE AO WAS THAT THE ASSE SSEE COMPANY HAS CLAIMED DEDUCTION U/S 80IA(4) OF THE ACT FOR THE PROFIT FRO M DEVELOPMENT OF INFRASTRUCTURE PROJECT AMOUNTING TO RS. 27,31,67,167/-. THE AO SHO W 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 DI SAGREED WITH THE EXPLANATION ADDUCED BY THE ASSESSEE AND ACCORDING TO AO IN VIEW OF THE EXPLANATION INSERTED BELOW SECTION 80IA(13) WITH RETROSPECTIVE EFFECT FR OM 01.04.2008 HAS OVER-RIDING INFLUENCE AND DEBARS THE ASSESSEES CLAIM, BECAUSE, THE ASSESSEES CLAIM OF DEDUCTION ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 2 | P A GE U/S 80IA(4) ARE IN RELATION TO BUSINESS IN THE NATU RE 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 T HAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION TO A BUSINESS REFER RED TO IN SUB-SECTION (4) WHICH IS IN THE NATURE OF A WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT) AND EXECUTED BY THE UN DERTAKING OR ENTERPRISE REFERRED TO IN SUB-SECTION (1). THUS ACCORDING TO AO SINCE THE ASSESSEE HAS BEEN EX ECUTING THE BUSINESS OF CIVIL CONSTRUCTION IN THE NATURE OF WORKS CONTRACT AWARDE D BY THE STATE GOVERNMENT / CENTRAL GOVERNMENT, THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S 80IA OF RS. 27,31,67,167/- WHICH IS IN RESPECT UNDER-TAKINGS WH ICH EARNS PROFIT ON DEVELOPING FROM INFRASTRUCTURE FACILITY. 4. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE LD. CIT(A) WHO ALLOWED THE CLAIM TAKING NOTE THAT THE TRIBUNAL IN THE CASE OF ASSESSEE FOR AY 2010- 11, 2011-12 AND 2012-13 HAS ALLOWED SIMILAR CLAIM A ND THEREFORE, HE ALLOWED THE DEDUCTION. 5. AGGRIEVED THE REVENUE IS BEFORE US. 6. AT THE OUTSET THE LD. A.R OF THE ASSESSEE, SHRI RAVI TULSIYAN BROUGHT TO OUR NOTICE THAT SIMILAR CLAIM OF THE ASSESSEE HAS BEEN ALLOWED IN THE EARLIER ASSESSMENT YEARS I.E. IN AY 2008-09 AY 2010-11, AY 2011-12 & A Y 2012-13, AY 2014-15, AY 2015-16; AND IN THIS YEAR THE NEW PROJECT WAS P ROJECT NO. 3004 WITH RAIL VIKASH NIGAM LTD. (IN SHORT RVNL). IT IS NOTED THAT AN AGR EEMENT WAS ENTERED BY ASSESSEE COMPANY WITH RVNL FOR CONSTRUCTION OF PSC VIADUCT E MBANKMENT AND STATIONS INCLUDING E & M WORKS IN CONNECTION WITH EXTENSION OF METRO RAILWAY LINE BETWEEN CH: 2591 M TO CH: 6373M FOR NOAPARA (EXCLUDING)-BAR ANAGAR-DAKSHINESWAR OF KOLKATA METRO IN THE STATE OF WEST BENGAL IN INDIA. THE LD. A.R DREW OUR ATTENTION TO PAGE NOS. 686 TO 791 OF PB WHEREIN THE AGREEMENT BETWEEN THE ASSESSEE COMPANY AND RVNL HAS BEEN FOUND. AS WE DISCUSSED IN THIS AS SESSMENT YEAR I.E. AY 2016-17, THE FRESH CLAIM IS FOR PROJECT NO. 3004 WITH RAIL V IKASH NIGAM LTD. IN THIS RESPECT IT ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 3 | P A GE IS NOTED THAT AN AGREEMENT WAS ENTERED BY ASSESSEE COMPANY WITH RAIL VIKASH NIGAM LTD. FOR CONSTRUCTION OF PSC VIADUCT, EMBANKMENT A ND STATIONS INCLUDING E & M WORKS IN CONNECTION WITH EXTENSION OF METRO RAILWAY LINE BETWEEN CH: 2591M TO CH: 6373 M FOR NOAPARA (EXCLUDING)-BARANAGAR-DAKSHI NESWAR OF KOLKATA METRO IN THE STATE OF WEST BENGAL, INDIA. IN THIS REGARD, TH E LD. A.R POINTED OUT THAT THIS PROJECT HAS ALSO BEEN AWARDED BY THE RVNL FOR CONST RUCTION OF PSC VIADUCT, EMBANKMENT AND STATIONS INCLUDING E & M WORKS IN CO NNECTION WITH EXTENSION OF METRO RAILWAY LINE BETWEEN CH: 2591 M TO CH: 6373 M FOR NOAPARA (EXCLUDING)- BARANAGAR-DAKSHINESWAR OF KOLKATA METRO IN THE STAT E 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, INFR ASTRUCTURE FACILITY MEANS- (A) A ROAD INCLUDING TOLL ROAD, A BRIDGE OR A RAIL SYST EM; 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 NOT E 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 WA TER, 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, STOR E HOUSES, AND YARDS FOR BOTH PERMANENT AND TEMPORARY WORKS AND PROVIDE FREE ACCE SS TO THE ENGINEER AND THE ENGINEERS REPRESENTATIVE WHO WILL HAVE RIGHT OF IN SPECTION INCLUDING THAT OF INSTRUCTING THE CONTRACTOR TO REMOVE A PARTICULAR M ATERIAL FROM THE STORES AND NOT TO USE THE SAME ON THE WORKS. TEMPORARY WORKS - ALL TEMPORARY WORKS NECESSARY FOR THE PROPER EXE CUTION OF THE WORKS SHALL BE PROVIDED AND MAINTAINED BY THE CONTR ACTOR-ASSESSEE AT HIS COST AND SUBJECT TO THE CONSENT OF THE ENGINEER. THE SAME SH ALL BE REMOVED BY THE CONTRACTOR- ASSESSEE AT HIS OWN EXPENSE WHEN THEY ARE NO LONGE R REQUIRED AND IN SUCH MANNER AS THE ENGINEER SHALL DIRECT. IN CASE THE CONTRACTOR A SSESSEE FAILS TO REMOVE THE TEMPORARY WORKS ON COMPLETION, THE ENGINEER IS AUTH ORIZED TO GET THE SAME REMOVED ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 4 | P A GE AND RECOVER THE COST THEREOF FROM THE CONTRACTOR-AS SESSEE. CONTRACTOR TO KEEP SITE CLEAR - DURING THE EXECUTION OF THE WORKS, THE CONTRACTO R SHALL KEEP THE SITE FREE FROM ALL UNNECESSARY OBSTRUCTION AND SHALL STORE , OR DISPOSE OF ANY CONTRACTORS EQUIPMENT OR SURPLUS MATERIALS. THE CO NTRACTOR-ASSESSEE SHALL CLEAR AWAY AND REMOVE FROM THE SITE ANY WRECKAGE, RUBBISH OR TEMPORARY WORKS NO LONGER REQUIRED. ALL RUBBISH, GARBAGE, BUILDERS WASTE, MALBA ETC SH ALL BE REMOVED FROM SITE ON A DAILY BASIS OR AS IT ACCUMULATES, WHICHEVER IS MORE FREQU ENT. ALL SURFACE AND SUB-SOIL DRAINS SHALL BE MAINTAINED IN A CLEAN, SOUND AND SA TISFACTORY STATE OF PERFORMANCE. NO EXTRA PAYMENT SHALL BE MADE ON THIS ACCOUNT. ON COMPLETION OF THE WORKS THE CONTRACTOR-ASSESSEE SHALL CLEAR AWAY AND REMOVE FROM SITE ALL CONSTRUCTIONAL PLANT, SURPLUS MATERIA L AND TEMPORARY WORKS. HE SHOULD LEAVE THE WHOLE OF THE SITE AND WORKS IN A CLEAN, T IDY AND WORKMAN LIKE CONDITION TO THE SATISFACTION OF THE ENGINEER. ENGAGEMENT OF STAFF AND LABOUR - THE CONTRACTOR-ASSESSEE SHALL MAKE HIS OWN ARRANGEMENTS FOR THE ENGAGEMENT OF STAFF AND LABOUR AT HIS OWN COST. THE CONTRACTOR- ASSESSEE SHALL, IF REQUIRED BY THE EMPLOYER, DELIVE R TO THE ENGINEER OR TO HIS OFFICE, A RETURN IN DETAIL IN SUCH FORM AND AT SUCH INTERVALS AS THE EMPLOYER MAY PRESCRIBE, SHOWING THE NUMBER OF LABOUR EMPLOYED IN DIFFERENT CATEGORIES BY THE CONTRACTOR ON THE SITE. FACILITIES OF STAFF AND LABOUR - THE CONTRACTOR-ASSESSEE SHALL PROVIDE AND MAINTA IN ALL NECESSARY ACCOMMODATION AND WELFARE FACILITIES AS S TIPULATED IN THE EMPLOYERS REQUIREMENTS FOR HIS (AND HIS SUB-CONTRACTORS) STA FF AND LABOUR. HEALTH AND SAFETY - PRECAUTION SHOULD BE TAKEN BY THE CONTRACTOR-ASS ESSEE TO ENSURE THE HEALTH AND SAFETY OF HIS STAFF AND LABOUR. THE CONTRACTOR-ASSESSEE SHALL, IN COLLABORATION WITH AND TO THE REQUIREMENTS OF THE L OCAL HEALTH AUTHORITIES, ENSURE THAT MEDICAL STAFF, FIRST AID FACILITIES, SICK BAY AND A MBULANCE SERVICE ARE AVAILABLE AT THE ACCOMMODATION AND ON THE SITE AT ALL TIMES, AND THA T SUITABLE ARRANGEMENTS ARE MADE FOR ALL NECESSARY WELFARE AND HYGIENE REQUIREMENTS AND FOR THE PREVENTION OF EPIDEMICS. ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 5 | P A GE DELIVERY TO SITE - THE CONTRACTOR-ASSESSEE SHALL BE RESPONSIBLE FOR PROCUREMENT, TRANSPORT, RECEIVING, UPLOADING AND SAFE KEEPING OF ALL PLANT, CONSTRUCTION, MATERIALS, CONTRACTORS EQUIPMENT AND OTHER THINGS REQUIRED FO R THE COMPLETION OF THE WORKS. TESTING - THE CONTRACTOR-ASSESSEE SHALL PROVIDE ALL DOCUME NTS AND OTHER INFORMATION NECESSARY FOR ALL TYPES OF TESTING AND SUCH ASSISTA NCE, LABOUR, MATERIALS, ELECTRICITY, FUEL, STORES, APPARATUS AND INSTRUMENTS AS ARE NECE SSARY TO CARRY OUT SUCH TESTS EFFICIENTLY. 7. FROM THE AFORESAID ACTIVITIES UNDERTAKEN BY THE ASSESSEE WE NOTE THAT THE CONTRACTOR ASSESSEES ACTIVITIES INVOLVES SUBSTANTI AL RISK. IT IS NOTED THAT LIKE ANY OTHER ENTREPRENEUR WHO EMPLOYS HIS MATERIAL, PLANT, MACH INERY, LABOUR ETC. IN A PROJECT AND UNDERTAKES RISK, THE ASSESSEE WAS ALSO EXPOSED TO SUBSTANTIAL AMOUNT OF RISK BY VIRTUE OF ENGAGING HIS ESTABLISHMENT IN THE INFRAST RUCTURE PROJECTS. IN ADDITION, THE ASSESSEE WAS EXPOSED TO FURTHER RISK OF NON-COMPLET ION OF WORK WITHIN TIME, OR OF ANY DAMAGE CAUSED TO THE WORKS SITE, ETC., OR INCR EASE IN PRICES OF MATERIALS, LABOUR ETC. BEYOND WHAT THE GOVERNMENT HAD AGREED TO COMPE NSATE AS PER THE AGREEMENTS. THUS, WE ARE OF THE OPINION THAT IT IS NOT A CASE W HERE THE ASSESSEE IS A WORKS CONTRACT SIMPLICITOR, WHERE THE GOVERNMENT AUTHORITY HAS PRO VIDED THE ASSESSEE WITH THE ENTIRE SET UP I.E. PLANT & MACHINERY, MATERIALS AND THE INFRASTRUCTURE NEEDED TO SUPPORT CONSTRUCTION; AND ALL THAT THE ASSESSEE HA D TO EMPLOY WAS LABOUR TO CARRY OUT CONSTRUCTION. INSTEAD IN THIS CASE THE ASSESSEE HAD PROVIDED AN ENTIRE ENTERPRISE WHICH WAS NEEDED TO CONVERT THE SITE (GIVEN BY THE GOVERN MENT) INTO AN INFRASTRUCTURAL FACILITY. 8. IN THIS CONNECTION IT WOULD BE GAINFUL TO REFER TO A RECENT DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER O F INCOME-TAX-VI V. VRM (INDIA) LTD. REPORTED IN [2019] 261 TAXMAN 164, WHE REIN UPHOLDING THE ORDER OF THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONE R OF INCOME TAX VS. VRM INDIA LTD. (2015) 280 CTR 0036 (DEL), IT WAS HE LD THAT WHERE THE ASSESSEE WAS AWARDED BOTH CONTRACTS AS TURNKEY PROJECTS AND CONCEPTUALIZATION, OVERALL ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 6 | P A GE PLANNING AND EXECUTION, OVERSIGHT OF ENTIRE EXECUTI ON, ETC. WAS WITH THE ASSESSEE, IT COULD BE SAID THAT ASSESSEE WAS ENGAGED IN DEVELOPM ENT AND CONSTRUCTION OF A HOUSING PROJECT. THE BRIEF FACTS OF THAT CASE WAS THAT THE ASSESSEE WAS ENGAGED IN BUSINESS OF BUILDING AND DEVELOPING OF HOUSING PROJECTS AND IT CLAIMED D EDUCTION UNDER SECTION 80 IB(10) FOR PROFITS DERIVED UNDER TWO PROJECTS EXECUTED AND DEVELOPED FOR DDA AND IRWO. THE ASSESSING OFFICER DENIED DEDUCTION ON THE GROUN D THAT ASSESSEE COMPANY DID NOT DEVELOP AND BUILD ANY HOUSING PROJECT OF ITS OWN BU T MERELY EXECUTED CONTRACT WORK AWARDED TO IT BY ITS PRINCIPALS, I.E., DDA AND IRWO . THE HONBLE HIGH COURT IN ITS ORDER HELD THAT SINCE ASSESSEE WAS AWARDED BOTH CON TRACTS AS TURNKEY PROJECTS AND CONCEPTUALIZATION, OVERALL PLANNING AND EXECUTION, OVERSIGHT OF ENTIRE EXECUTION, ETC., WAS WITH ASSESSEE, IT COULD BE SAID THAT ASSESSEE W AS ENGAGED IN DEVELOPMENT AND CONSTRUCTION OF A HOUSING PROJECT AND MERE CIRCUMST ANCES THAT ASSESSEE, AFTER DEVELOPMENT OF INFRASTRUCTURE FACILITY PROJECT, TRA NSFERRED SAME TO GOVT. AND IRWO OR DDA AND THEY PAID ASSESSEE FOR DEVELOPMENT OF SU CH HOUSING PROJECT DID NOT MEAN THAT ASSESSEE DID NOT DEVELOP RESIDENTIAL PROJ ECT, DISENTITLING IT TO DEDUCTION U/S 80IB(10) OF THE ACT. THE SLP FILED BY THE DEPARTMEN T AGAINST THE IMPUGNED ORDER WAS DISMISSED BY THE HONBLE SUPREME COURT RULING T HAT WHERE ASSESSEE, AFTER DEVELOPMENT OF INFRASTRUCTURE FACILITY PROJECT, THE REAFTER TRANSFERRED THE SAME TO GOVERNMENT FOR WHICH IT WAS PAID COST PLUS MARGIN O F 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 CLA IM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, YET, THE RATIO UPHELD IN THE A BOVE-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 TECH NICAL PERSONNEL, PLANT AND MACHINERY, TECHNICAL KNOWHOW, EXPERTISE AND FINANCI AL RESOURCES IT CAN BE SAID THAT THE ASSESSEE IS ENGAGED IN DEVELOPMENT OF INFRASTRU CTURE FACILITY, FULLY APPLIES IN THE CASE OF THE ASSESSEE. ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 7 | P A GE 9. IN THE INSTANT CASE, AS WILL BE EVIDENT FROM THE PERUSAL OF THE AGREEMENTS, AS ENCLOSED IN THE PAPER BOOK AND RELEVANT PORTIONS OF WHICH ARE DISCUSSED AS ABOVE, ALL THE AGREEMENTS UNDER CONSIDERATION ARE NOT FOR A SP ECIFIC WORK, THEY ARE FOR DEVELOPMENT OF FACILITY AS A WHOLE. THEREFORE, MERE LY BECAUSE IN THE AGREEMENT FOR DEVELOPMENT OF INFRASTRUCTURE FACILITY, ASSESSEE IS REFERRED TO AS CONTRACTOR OR BECAUSE SOME BASIC SPECIFICATIONS ARE LAID DOWN, IT DOES NO T DETRACT THE ASSESSEE FROM THE POSITION OF BEING A DEVELOPER, NOR WILL IT DEBAR TH E ASSESSEE FROM CLAIMING DEDUCTION U/S.80IA(4) OF THE ACT. 10. IT IS NOTED THAT IN A DEVELOPMENT CONTRACT, RES PONSIBILITY IS FULLY ASSIGNED TO THE DEVELOPER FOR EXECUTION AND COMPLETION OF WORK. IT IS EVIDENT THAT THE ASSESSEE, VIDE THE AGREEMENTS, HAS CLEARLY DEMONSTRATED THE V ARIOUS RISKS UNDERTAKEN BY IT. IN ALL THE AGREEMENTS, RELEVANT PORTIONS OF WHICH ARE REPRODUCED SUPRA, THE ASSESSEE HAS UNDERTAKEN HUGE RISKS IN TERMS OF DEPLOYMENT OF TEC HNICAL PERSONNEL, PLANT AND MACHINERY, TECHNICAL KNOWHOW, EXPERTISE AND FINANCI AL RESOURCES. HENCE, UNDOUBTEDLY ENTERING INTO LAWFUL AGREEMENTS AND THE REBY BECOMING A CONTRACTOR SHOULD, IN NO WAY, BE A BAR TO THE ONE BEING A DEVE LOPER SINCE THE ROLE OF A DEVELOPER IS LARGER THAN THAT OF A CONTRACTOR. AS SUCH IT FOL LOWS FROM THE ABOVE THAT THE ASSESSEE, WHO IS ENGAGED IN DEVELOPING THE INFRASTRUCTURAL FA CILITY, IS RIGHTFULLY ENTITLED TO THE BENEFITS OF DEDUCTION U/S.80IA(4) OF THE ACT. FURTH ER WE NOTE THAT THE ASSESSEE WAS EVEN ASSESSED TO VAT ON THE AFORESAID PROJECTS. [VA T RETURNS ARE FOUND ENCLOSED AT PAGES 792 TO 798 AND VAT AUDIT REPORT IS ENCLOSED I S FOUND PLACED AT PAGES 799 TO 802 OF THE PAPER BOOK]. FURTHER WE NOTE THAT IN THE EARLIER ASSESSMENT YEARS, THE ASSESSEES CLAIM FOR DEDUCTION U/S 80IA(4) OF THE A CT HAS BEEN ALLOWED AND THE FOLLOWING CHART WILL GIVE A BIRDS EYE VIEW IN RESP ECT OF DEDUCTION ALLOWED IN THE EARLIER YEARS AND THE ITEM NO. 5 (INFRA) PERTAINS T O THAT OF THIS ASSESSMENT YEAR. ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 8 | P A GE SL. NO. CONTRACT NO. NAME OF CLIENT DESCRIPTION NET(RS.) REMARKS 1 2849 N.F.RAILWAY BRIDGE 3,32,43,752 ALREADY CONSI DERED AND ADJUDICATED BY THE TRIBUNAL IN AY 2015-16. 2 2850 N.F. RAILWAY BRIDGE 1,76,74,691 ALREADY CONS IDERED AND ADJUDICATED BY THE TRIBUNAL IN AY 2015-16. 3 2879 N.F. RAILWAY BRIDGE 2,37,73,102 ALREADY CONS IDERED 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 ASSESSEES OWN CASE FOR AY 200 7-08 THE TRIBUNAL HAS CONFIRMED THE APPEAL OF LD. CIT(A) WHEREIN THE ASSE SSEES CLAIM FOR DEDUCTION WAS ALLOWED WHICH IS FOUND PLACED AT 1 TO 16 OF PB. SIM ILARLY IN RESPECT OF ASSESSEES OWN CASE FOR AY 2008-09 FOR DEDUCTION U/S 80IA HAS BEEN ALLOWED WHICH IS PLACED AT PAGE 17-44 OF PB; AND IN ASSESSEES OWN CASE FOR AY 2011-12 AND AY 2012-13 DEDUCTION WAS PARTLY ALLOWED I.E. THE TRIBUNAL ALLO WED THE ASSESSEES CLAIM IN RESPECT OF NHAI & INDORE MUNICIPAL CORPORATION TO THE TUNE OF RS. 10,27,17,740/- & RS. 1,53,70,937/- RESPECTIVELY. AND IN RESPECT OF THE A SSESSEES CLAIM OF DEDUCTION IN RESPECT OF PROJECT WITH BANGALORE DEVELOPMENT AUTHO RITY AND KOLKATA MUNICIPAL CORPORATION TO THE TUNE OF RS. 99,79,770/- & RS. 25 ,84,151 WAS REMITTED BACK TO AO TO EXAMINE THE TERMS AND CONDITIONS OF THE CONTRACT AND TO ALLOW DEDUCTION IF IT FALLS IN THE KEN OF SECTION 80IA(4) OF THE ACT WHICH IS F OUND AT PAGE 58 TO 97 OF PB ( WHICH ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 9 | P A GE WAS SUBSEQUENTLY ALLOWED BY AO FOR AY 2011-12 & AY 2012-13 ) ; AND SIMILARLY IN ASSESSEES OWN CASE FOR AY 2014-15 AND 2015-16, THE TRIBUNAL ALLOWED THE CLAIM OF DEDUCTION U/S 80IA WHICH IS PLACED AT 98-104 OF PB. SO WE NOTE THAT THE ASSESSEES CLAIM FOR DEDUCTION U/S 80IA(4) ON THE PROFITS, IT EARNED FROM DIFFERENT PROJECTS (SUPRA) ARE COVERED BY THE EARLIER DECISION OF THIS TRIBUNAL. IN RESPECT OF ITS CLAIM U/S 80IA OF THE ACT THIS TRIBUNAL HAS TAKEN NOTE THAT T HE ASSESSEE COMPANY WAS ENGAGED IN THE CONSTRUCTION AND DEVELOPMENT OF INFRASTRUCTU RE PROJECTS SUCH AS CONSTRUCTION OF BARRAGE, FLYOVER ETC. AND THE ISSUE BEFORE THE TRIB UNAL IN THE EARLIER YEARS WAS WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING THE CL AIM OF DEDUCTION OF PROFIT MADE BY THE COMPANY FROM DEVELOPMENT OF INFRASTRUCTURE F ACILITY AS DEFINED U/S 80IA(4) OF THE ACT IN VIEW OF THE EXPLANATION INSERTED UNDER S UB-SECTION (13) OF SECTION 80IA(4) OF THE ACT BROUGHT IN BY FINANCE ACT, 2007 W.E.F. 0 1.04.2000. THE AO HAD REJECTED THE CLAIM FOR DEDUCTION U/S 80IA(4) OF THE ACT MADE BY THE ASSESSEE THAT IT WAS A DEVELOPER AND ACCORDING TO HIM, THE ASSESSEE WAS A MERE WORKS CONTRACTOR AND IN VIEW OF EXPLANATION INSERTED BELOW SECTION 80IA(13) OF THE ACT THE ASSESSEE WAS DISENTITLED TO THE CLAIM AND IT WAS DISALLOWED, WHI CH ACTION OF AO WAS OVERTURNED BY THE LD. CIT(A) AND IN THE REVENUES APPEAL BEFORE T HE TRIBUNAL, THE TRIBUNAL WAS PLEASED TO UPHOLD THE ACTION OF LD. CIT(A) AND THER EBY THE CLAIM OF ASSESSEE FOR DEDUCTION U/S 80IA(4) WAS ALLOWED IN THE PREVIOUS Y EARS. IN THE RELEVANT ASSESSMENT YEAR AY 2016-17, AS WE DISCUSSED, THE ASSESSEES CL AIM OF DEDUCTION U/S 80IA(4) OF THE ACT IS IN ADDITION TO THE FIVE (5)) PROJECTS WH ICH HAD ALREADY UNDER GONE OUR SCRUTINY IN THE EARLIER ASSESSMENT YEARS AND HAS BE EN ALLOWED. SO OUT OF THE TOTAL CLAIM OF DEDUCTION OF RS. 27,31,67,167/-, THE CLAIM OF RS. 26,41,78,456/- [I.E. RS. 27,31,67,167 RS. 89,88,711] IS CONTINUING FROM EA RLIER YEARS AND THE TRIBUNAL HAS UPHELD THE CLAIM IN RESPECT OF RS. 26,41,78,456/-. SO IN THIS RELEVANT ASSESSMENT YEAR I.E, AY 2016-17, THE FRESH CLAIM IS IN RESPECT OF P ROJECT/CONTRACT NO. 3004 WHICH IS IN RESPECT OF AGREEMENT BETWEEN ASSESSEE COMPANY AND R VNL, AND WHICH PERTAINS TO METRO RAILWAY INFRASTRUCTURE. IN RESPECT OF THIS PR OJECT (METRO) WE NOTE THAT THE ASSESSEE IN ITS SUBMISSION BEFORE THE LD. CIT(A) HA S 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 FOUN D NOTED BY HIM AT PG 3 TO 20 OF ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 10 | P A GE HIS IMPUGNED ORDER. WE HAVE CAREFULLY GONE THROUGH THE CONTENTS OF SAME (SUPRA) AND HAVE DISCUSSED ABOUT IT IN PARA 6 & 7 SUPRA AND THEREFORE WE CONCUR WITH THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE THAT ASSES SEE IS A DEVELOPER OF INFRASTRUCTURE FACILITY AND SO IS ENTITLED TO THE CLAIM OF DEDUCTI ON. WE NOTE THAT THE TRIBUNAL IN EARLIER ASSESSMENT YEARS HAD EXAMINED THE NATURE OF THE FIVE (5) PROJECTS AND THE RISK, RESPONSIBILITY AND DUTIES OF THE ASSESSEE COMPANY A ND GAVE ITS IMPRIMATUR TO THE CLAIM OF ASSESSEE U/S 80IA(4) OF THE ACT BY HOLDING THAT THESE PROJECTS ARE DEVELOPMENT OF INFRASTRUCTURE FACILITY. THE LD. A.R HAS POINTED OUT THAT IN CERTAIN ASSESSMENT YEARS, THE TRIBUNAL HAD EVEN REMITTED TH E ISSUE OF DEDUCTION U/S 80IA(4) OF THE ACT BACK TO THE AO AND THE AO IN THOSE PROCE EDINGS AFTER EXAMINING THE AGREEMENTS AND NATURE OF RISK INVOLVED IN THE PROJE CT UNDERTAKEN BY THE ASSESSEE, AFTER BEING SATISFIED HIMSELF ABOUT THE CLAIM OF TH E ASSESSEE, HAS ALLOWED IT AND DREW OUR ATTENTION TO ASSESSMENT ORDER FOR AY 2011-12 AN D AY 2012-13. SO WE NOTE THAT AO WAS SATISFIED WITH THE CLAIM OF ASSESSEE COMPANY U/S 80IA(4) OF THE ACT IN AY 2011-12 & AY 2012-13 AND THE TRIBUNAL HAS UPHELD TH E ACTION OF LD. CIT(A) IN AY 2008-09, AY 2010-11. 12. FOR THE ASSESSMENT YEAR 2008-09 ORDER DATED 08. 02.17, THIS TRIBUNAL HELD AS FOLLOWS: THUS, THE FACT THAT THE ASSESSEE DEPLOYS ITS RESOU RCES (MATERIAL, MACHINERY, LABOUR ETC.) IN THE CONSTRUCTION WORK CLEARLY EXHIBITS THE RISKS UNDERTAKEN BY THE ASSESSEE. FURTHER, THE ASSESSEE VIDE THE AGREEMENTS HAS CLEAR LY DEMONSTRATED THE VARIOUS RISKS UNDERTAKEN BY IT. THE ASSESSEE WAS TO FURNISH A SEC URITY DEPOSIT TO THE EMPLOYER AND INDEMNIFY THE EMPLOYER OF ANY LOSSES/DAMAGE CAUSED TO ANY PROPERTY/LIFE IN COURSE OF EXECUTION OF WORKS. FURTHER, IT WAS RESPONSIBLE FOR THE CORRECTION OF DEFECTS ARISING IN THE WORKS AT ITS COST. THUS, IT CANNOT B E SAID THAT THE ASSESSEE HAD NOT UNDERTAKEN ANY RISK. . 6.8. FROM THE ABOVE, IT IS CLEAR THAT THE CONTENTIO N OF THE AO THAT THE ASSESSEE HAD NOT UNDERTAKEN ANY ENTREPRENEURIAL AND INVESTMENT R ISK IS AN INCORRECT INTERPRETATION OF THE FACTS......... 7. FROM THE PERUSAL OF THE TERMS AND CONDITIONS IN THE AGREEMENT, IT IS CLEAR THAT THE ASSESSEE WAS NOT A WORKS CONTRACTOR SIMPLICITOR AND WAS A DEVELOPER AND HENCE EXPLANATION TO SECTION 80-IA(13) DOES NOT APPLY TO THE ASSESSEE ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 11 | P A GE 13. FOR THE ASSESSMENT YEAR 2010-11, THIS TRIBUNAL 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 ISS UE IS COVERED IN FAVOUR OF ASSESSEE IN ITS OWN CASE BY THE ORDER OF HON'BLE KOLKATA TRI BUNAL IN ITA NO.2168/KOL/2013 VIDE ORDER DATED 08/02/2017.. 9. WE ALSO FIND THAT THE FACTS OF THE CASE OF THE A SSESSEE ARE IDENTICAL AS THAT OF THE ABOVE CASE OF THE ASSESSEE'S OWN CASE (SUPRA). IN T HE LIGHT OF ABOVE REASONING, WE HOLD THAT THE ORDER OF THE LD. CIT(A) IS CORRECT AN D IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR. WE UPHOLD THE SAME. HEN CE, THIS GROUND OF REVENUE'S APPEAL IS DISMISSED. 14. AS ALREADY STATED FOR THE AY 2011-12 AND A.Y 20 12-13, THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER, AN D 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 DEDUCTIO N 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 FOL LOWED THE EARLIER ORDER OF TRIBUNAL IN ASSESSEES OWN CASE AND GAVE RELIEF TO THE ASSESSEE ON THE SAME ISSUE AND FACTS. THE LD. CIT-DR COULD NOT DISTINGUISH THE CAS E ON FACTS OR LAW. IN THIS LIGHT OF THE DISCUSSIONS, WE ARE OF THE OPINION THAT SINCE T HE ASSESSEE IS A DEVELOPER IN THE NEW AS WELL AS EXISTING INFRASTRUCTURAL PROJECTS AS STATED ABOVE, DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IA OF THE ACT TO THE TUNE OF RS. 27,31,67,167/- FOR THE A.Y. 2016- 17, TO BE ALLOWED AS RIGHTLY DECIDED BY LD. CIT(A) . WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(A), SO WE UPHOLD THE SAME. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 TH MARCH, 2021. SD/- SD/- (J.S. REDDY) (A. T . VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10.03.2021 SB, SR. PS ITA NO.01/KOL/2020 M/S SIMPLEX INFRASTRUCTURES LTD. A.Y. 2016-17 12 | P A GE COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- ACIT, CIRCLE-12(2), KOLKATA 2. RESPONDENT M/S SIMPLEX INFRASTRUCTURES LTD., 27, SHAKESPEARE SARANI, SIMPLEX HOUSE, KOLKATA-700017. 3. THE CIT(A)- 4, KOLKATA (SENT THROUGH E-MAIL) 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES, KOLKATA