Appeal details
Counselvise Citation
[2018] 119 COUNSELVISE.COM (IT) 2857 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 5 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-11-2018
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
Not Allotted
Assessment Year
2012-2013
Appeal Filed On
05-05-2016
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO.161/AHD/2015 WITH CO NO.33/AHD/2015 / ASSTT. YEAR: 2010-2011 AND ITA NO.1532/AHD/2015 WITH CO NO.98/AHD/2015 / ASSTT. YEAR: 2011-2012 AND ITA NO.1183/AHD/2016 WITH CO NO.73/AHD/2016 / ASSTT. YEAR: 2012-2013 DCIT, CIR.1(1)(1) AHMEDABAD. VS. M/S.AQUAFIL POLYMERS CO.P.LTD. 202-203, KAMDHENU COMPLEX AMBAWADI AHMEDABAD 380015. PAN : AABCA 7902 R ( APPLICANT ) ( RESPONENT ) REVENUE BY : SHRI LALIT P.JAIN, SR.DR ASSESSEE BY : SHRI S.N. SOPARKAR, AR / DATE OF HEARING : 16/10/2018 / DATE OF PRONOUNCEMENT: 01/11/2018 +,/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE LD.CIT(A) HAS DECIDED APPEALS OF THE ASSESSEE F OR THE ASSTT.YEARS 2010-11, 2011-12 AND 2012-13 VIDE ORDERS DATED 13-1 1-2014, 5-3-2015 AND 26-2-016 RESPECTIVELY. REVENUE IS CHALLENGING THE ABOVE ORDERS OF THE LD. CIT(A) FOR THE RESPECTIVE ASSESSMENT YEARS. ON REC EIPT OF NOTICE IN THE REVENUES APPEAL, THE ASSESSEE HAS FILED CO BEARING NO.33/AHD/2015, 98/AHD/2015 AND 73/AHD/2016 RESPECTIVELY. SINCE CO MMON ISSUES ARE ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 2 INVOLVED IN ALL THESE APPEALS, THEREFORE, WE HEARD THEM TOGETHER AND DEEM IT APPROPRIATE TO DISPOSE OF THEM BY THIS COMMON ORDER . 2. ONLY COMMON ISSUE AGITATED BY THE REVENUE IN THE SE THREE YEARS RELATES TO ALLOWANCE OF DEDUCTION CLAIMED UNDER SECTION 80I AOF THE INCOME TAX ACT. FACTS ON ALL VITAL POINTS ARE COMMON THEREFORE, FOR THE FACILITY OF REFERENCE, WE TAKE UP THE FACTS MAINLY FROM THE ASSTT.YEAR 2010-1 1. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-CO MPANY AT THE RELEVANT TIME WAS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF INFRASTRUCTURE PROJECTS. IT HAS FILED ITS RETURN OF INCOME ON 30.9.2012 DECLARI NG TOTAL INCOME AT NIL AFTER CLAIMING DEDUCTION AT RS.1,61,33,833/- UNDER SECTIO N 80IA OF THE INCOME TAX ACT. SIMILARLY, IN THE ASSTT.YEAR 2011-12 IT HAS S HOWN ADDITIONAL INCOME AT RS.75,97,540/- AND CLAIMED DEDUCTION UNDER SECTION 80IA AT RS.1,78,72,268/-. IN THE ASSTT.YEAR 2012-13 THE ASSESSEE HAS DECLARED NIL INCOME AND CLAIMED DEDUCTION UNDER SECTION 80IA AT RS.3,35,57,706/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT IN ALL THESE T HREE YEARS. NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSES SEE. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE H AS CLAIMED DEVELOPMENT OF VARIOUS INFRASTRUCTURE PROJECTS DURING THESE ASSESS MENT YEARS. THE LD.AO TOOK NOTE OF THESE PROJECTS WHILE TAKING COGNIZANCE OF T HE WRITTEN SUBMISSIONS MADE BY THE ASSESSEE. THE AO THEREAFTER MADE ANALY SIS OF SECTION 80IA(4) OF THE ACT AND OBSERVED THAT THE ASSESSEE IS NOT OWNER OF THESE PROJECTS, AND THEREFORE, IT COULD NOT BE CONSTRUED AS DEVELOPER O F INFRASTRUCTURE PROJECTS, RATHER ITS ROLE WOULD BE CONSTRUED AS A CONTRACTOR. THE CONTRACTOR IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 80IA. ACCORDI NGLY, HE DISALLOWED THE CLAIM OF DEDUCTION. ON APPEAL, THE LD.CIT(A) HAS R ELIED UPON THE ORDERS OF HIS PREDECESSOR IN EARLIER ASSESSMENT YEARS STARTIN G FROM ASSTT.YEAR 2004-05 AND TREATED THE ASSESSEE AS INFRASTRUCTURE DEVELOPE R. THE LD.CIT(A) ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 3 ACCORDINGLY ALLOWED DEDUCTION UNDER SECTION 80IA. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT IDENTICAL ISSUE HAS BEEN EXAMINED BY THE TRIBUNAL IN THE ASSTT.YEARS 2005-06 TO 2009-10. TH E TRIBUNAL HAS HELD IN ITS ORDER DATED 30.9.2016 THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF INFRASTRUCTURE DEVELOPMENT AND ENTITLED FOR DEDUCTI ON UNDER SECTION 80IA. THE TRIBUNAL HAS DECIDED TEN APPEALS BEARING NOS.81 1/AHD/2010 AND OTHERS VIDE THIS ORDER. COPY OF THIS ORDER HAS BEEN PLACE D ON RECORD. THE LD.DR, ON THE OTHER HAND, IS UNABLE TO CONTROVERT THIS CONTEN TION OF THE LD.COUNSEL FOR THE ASSESSEE. 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. AS FAR AS THE ISSUE WHETHER THE ASSESSEE IS TO BE TREATED AS AN INFRASTRUCTURE DEVELOPER OR SIMPLY A CONTRACTOR IS CONCERNED, THIS ISSUE HAS BEEN DECIDED IN EARLIER YEARS IN FAVOUR OF THE ASSE SSEE BY THE TRIBUNAL. THE LD.CIT(A) HAS FOLLOWED ORDERS OF HIS PREDECESSOR IN EARLIER ASSESSMENT YEARS VIZ. ASSTT.YEAR 2005-06 TO 2008-09. THESE ORDERS H AVE BEEN UPHELD BY THE TRIBUNAL. HOWEVER, FOR THE FACILITY OF REFERENCE A ND COMPLETENESS, WE WOULD LIKE TO MAKE REFERENCE TO SUCH DETAILS FROM THE ASS ESSMENT ORDERS. ASSTT.YEAR 2010-11 THE ASSESSES COMPANY HAS CLAIMED DEDUCTION OF RS. 1 ,61,33,833/- U/S. 80IA FOR A.Y. 2010-11 IN RESPECT OF THE PROFIT DERIVED F ROM THE PROJECT ELIGIBLE U/S. 80IA DETAILED AS UNDER: SR.NO, DESCRIPTION DATE OF COMMENCEMENT A.Y REMARKS (I) GWSSB-ADB 16/01/2004 2004-05 DEVELOPMENT (II) GWSSB-GONDAL/KOTHARIA 02/11/2004 2005-06 DEVELOPMENT (III) M.P.AUDYOGIK KENDRA VIKAS NIGAM (INDORE) LTD.- MPAKVN 02/03/2006 2006-07 DEVELOPMENT ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 4 (IV) VADORA MUNICIPAL CORPORATION -WTP 23/10/2009 2010-11 DEVELOPMENT (V) VADORA MUNICIPAL CORPORATION -STP 01/02/2009 2010-11 DEVELOPMENT (VI) AHMEDABAD MUNICIPAL CORPORATION, KOTARPUR (O& M) 12/09/2008 2009-10 OPERATION & MAINTENANCE (VII) AHMEDABAD URBAN DEVELOP- MENT AUTHORITY, JASPUR (O&M) 01/04/2007 2008-09 OPERATION & MAINTENANCE ASSTT.YEAR 2011-12 '2. SR. NO. (4) OF THE NOTICE U/S. 142(1) DT. 3 0-10-2013 YOU HAVE ASKED THE ASSESSEE COMPANY TO DEMONSTRATE WITH NECESSARY EVIDENCES THAT THE UNDERTAKING FULFILLS ALL THE CON DITIONS OF SECTION 801A. (A) IN RESPECT OF THE FOLLOWING INFRASTRUCTURE PROJ ECTS THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL): VI, HAS ALLOWED THE CLAIM U /S. 80IA HENCE, TO AVOID THE REPETITIVENESS THE ASSESSEE COMPANY DO NOT FURNISH THE INFORMATION AS IT IS VERY MUCH ON RECORD OF THE DEPARTMENT AND RELY ON T HE APPELLATE ORDERS: PROJECT DATE OF COMMENCEMENT 1ST A.Y. OF NATURE OF CLAIM WORK AHMEDABAD MUNICIPAL CORPORATION, 01-04-2007 2008-09 O&M AHMEDABAD MUNICIPAL CORPORATION 12-09-2008 2009-10 O&M GWSSB - GONDAL - KOTHAIRA 02-11-2004. 2005-06 DEVELOPMENT MPAKVN 02-03-2006 2007-08 DEVELOPMENT (B) THE DEVELOPMENT OF FOLLOWING INFRASTRUCTURE PRO JECTS HAVE BEEN CONSIDERED IN THE ASSESSMENT FOR A.Y. 2010-11 FOR THE FIRST TI ME. THE CLAIM U/S. 801A HAS BEEN DISALLOWED IN A.Y. 2010-11 AND THE ASSESSEE CO MPANY IS IN APPEAL BEFORE THE HON'BLE COMMISSIONER OF INCOME TAX (APPE AL): VI, AHMEDABAD: ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 5 PROJECT DATE OF COMMENCEMENT IST A.Y. OF CLAIM NATURE OF WORK VADODARA MUNICIPAL CORPORATION 23-10-2009 2010-11 DEVELOPMENT OF WTP VADODARA MUNICPAL CORPORATION 01-02-2010 . 2010-11 DEVELOPMENT OF STP (C) THE DEVELOPMENT OF FOLLOWING INFRASTRUCTURE PRO JECTS HAVE BEEN AWARDED DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2 010-12. PROJECT DATE OF COMMENCEMENT IST A.Y. OF CLAIM NATURE OF WORK KHAMBHAT NAGAR SEVA SADAN, KHAMBHAT 24-09-2009 2011-12 DEVELOPMENT OF WTP GUJARAT URBAN DEVELOPMENT COMPANY (GUDC) - TARSADI 13-04-2010 2011-12 DEVELOPMENT OF WTP (A) THE ASSESSEE COMPANY RELIES ON THE DECISIONS OF THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL): VI, AHMEDABAD IN RESPECT OF ALL THE FOUR (4) PROJECTS LISTED IN SECTION (A) ABOVE: . AY. ORDER NO. DATED 2005-06 CIT(A)-VI/ITO/WD-1 (3)789/1 0-1 1 24-12-2012 2007-08 CIT(A)-VI/ITO/WD-1 (3)7304/09- 1 0 29-12-2010 2008-09 CIT(A)-VI/ITO/WD-1(3)/214/10-1 1 26-12-2012 2009-10 CIT(A)-VI/ADDL. R-1/180/11-12 02-01-2013 ASSTT.YEAR 2012-13 ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 6 4. DISALLOWANCE OF DEDUCTION CLAIMED U/S.801 A: THE ASSESSEE HAS CLAIMED IN THE RETURN A DEDUCTION OF RS. 3,35,57,706/- U/S. 801A OF THE ACT AND DURING THE ASSESSMENT PROCEEDINGS, V IDE NOTICE U/S 142(1) DATED 13/01/2015, ASSESSEE WAS ASKED TO DEMONSTRATE THAT THE ENTERPRISE SATISFIES ALL THE CONDITIONS LAID DOWN IN SECTION 80IA OF THE ACT . IN RESPONSE THERETO, THE ASSESSES VIDE LETTER DATED 23/01/2015 SUBMITTED AS UNDER: YOU HAVE ASKED THE ASSESSEE COMPANY TO DEMONSTRATE WITH NECESSARY EVIDENCES THAT THE UNDERTAKING FULFILS ALL THE CONDITIONS OF SECTION 80IA. (A) IN RESPECT OF THE FOLLOWING INFRASTRUCTURE PROJ ECTS THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL): VI, HAS ALLOWED THE CLAIM U/S. 80IA HENCE, TO AVOID THE REPETITIVENESS THE ASSESSEE COMPANY DO NOT FURNISH THE INFORMATION AS IT IS VERY MUCH ON RECORD OF THE DEPARTMENT AND RELY ON THE AP PELLATE ORDERS: PROJECT DATE OF COMMENCEMENT 1 ST A.Y. OF CLAIM NATURE OF WORK AHMEDABAD MUNICIPAL CORPORATION, JASPUR 01-04-2007 2008-09 O&M AHMEDABAD MUNICIPAL CORPORATION, KOTARPUR 12-09-2008 2009-10 O&M GWSSB - GONDAL - KOTHAIRA 02-11-2004 2005-06 DEVELOPMENT MPAKVN 02-03-2006 2007-08 DEVELOPMENT VADODARA MUNICIPAL CORPORATION 23-10-2009 2010-11 DEVELOPMENT OFWTP VADODARA MUNICIPAL CORPORATION 01-02-2010 2010-11 DEVELOPMENT OF STP (B) THE DEVELOPMENT OF FOLLOWING INFRASTRUCTURE PRO JECTS HAVE BEEN AWARDED DURING THE YEAR RELEVANT TO A.Y. 2011-12 AND THE AS SESSEE COMPANY IS IN APPEAL BEFORE THE HONBLE COMMISSIONER OF INCOME TAX (APPE AL): VI, AHMEDABAD. PROJECT DATE OF COMMENCEMENT 1 ST A.Y. OF CLAIM NATURE OF WORK KHAMBHAT NAGAR SEVASADAN, KHAMBHAT 24-09-2009 2011-12 DEVELOPMENT OF WTP GUJARAT URBAN DEVELOPMENT COMPANY (GUDC) - TARSADI 13-04-2010 2011-12 DEVELOPMENT OF WTP (C) THE DEVELOPMENT OF FOLLOWING PROJECTS HAVE BEEN AWARDED DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2012-13 ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 7 PROJECT DATE OF COMMENCEMENT 1 ST A.Y. OF CLAIM NATURE OF WORK RAJASTHAN URBAN INFRASTRUCTURE DEVELOPMENT PROJECT BUNDI (RUIDP) 21-07-2011 2012-13 DEVELOPMENT OF SEWERAGE TREATMENT PLANT (STP) EX. ENGINEER (R&B DIVISION) TARAPUR, ANAND (TARAPUR) 19-09-2011 2012-13 DEVELOPMENT OF SEWERAGE TREATMENT PLANT (STP) (A) THE ASSESSEE COMPANY RELIES ON THE FOLLOWING AP PELLATE ORDERS OF THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL): VI, AHMEDABAD IN RESPECT OF ALL THE FOUR (4) PROJECTS LISTED IN SECTION (A) ABOVE: A.Y. ORDER NO. DATED 2005-06 CIT(A)-VI/ITO/WD-L(3)/89/10-LL 24-12-2012 2007-08 CIT(A)-VI/ITO/WD-L(3)/304/09-10 29-12-2010 2008-09 CIT(A)-VI/ITO/WD-L(3)/214/10-LL 26-12-2012 2009-10 CIT(A)-VI/ADDL. R-L/180/11-12 02-01-2013 2010-11 CIT(A)-VI/WD. L(3)/7/13-14 13-11-2014 (B) THE ASSESSEE COMPANY HAS MADE DETAILED SUBMISSI ON IN RESPECT OF BOTH THESE PROJECTS IN THE ASSESSMENT PROCEEDINGS FOR A.Y. 201 1-12. ONCE AGAIN THE ASSESSEE COMPANY SUBMITS AND REITERATES AS UNDER: 5. REASONS ASSIGNED BY THE AO IN THESE ASSESSMENTS ORDERS WERE SIMILAR TO THOSE INVOLVED IN THE ASSTT.YEARS 2006-07, 2006- 07 AND 2008-09. THE TRIBUNAL HAS CONSIDERED THIS ASPECT. THE DISCUSSIO N MADE BY THE TRIBUNAL ON THIS ISSUE READS AS UNDER: 25. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL ON THE RECORD AND ALSO GONE THROUGH THE DECISION RELIED ON BY THE LD. AR. SOLITARY GRIEVANCE OF THE REVENUE IS AGAINST THE ORDER OF LD . CIT(A) ALLOWING THE CLAIM OF RS. 42,19,807/- U/S 80IA OF THE ACT. WE OBSERVE THA T LD. CIT(A) HAS ALLOWED THE CLAIM UNDER SECTION 80IA OF THE ACT TOWARDS PROFIT EARNED FROM THREE PROJEC TS NAMELY -GWSSB- ADB, GONDAL, GWSSB-GONDAL & MPAKVN B Y OBSERVING AS BELOW :- ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 8 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESS MENT ORDER AND APPELLANT'S SUBMISSION. APPELLANT CLAIMED DEDUCTION U/S 80IA(4) OF IT ACT ON FIVE INFRASTRUCTURE DEVELOPMENT PROJECTS BEFORE ASSESSING OFFICER AS UNDER :- 1. GWSSB -ASIAN DEVELOPMENT BANK (ADB) PROJECT 2. GWSSB -GONDAL/KATHARIA 3. AHMEDABAD MUNICIPAL CORPORATION 4. GWSSB -NADIAD 5. MP AUDYOGIK KENDRA VIKAS NIGAM LTD. (IMPAKVN) HOWEVER IN APPEAL SUBMISSION DATED 27.10.2010 APPEL LANT DID NOT PURSUE ITS CLAIM IN RESPECT OF TWO PROJECTS NAMELY -AHMEDABAD MUNICIPAL CORPORATION AND GWSSB NADIAD, IT WAS SUBM ITTED THAT THESE PROJECTS RELATES TO MAINTENANCE AND OTHER SERVICES AND NOT INFRASTRUCTURE DEVELOPMENT THEREFORE 80IA CLAIM IN RESPECT OF THES E PROJECTS WERE NOT PURSUED. IN VIEW OF THIS APPELLANT'S CLAIM IN RESPE CT OF THESE TWO PROJECTS IS REJECTED. COMING TO THE OTHER THREE PROJECTS APPELLANT SUBMIT TED DETAILED SUBMISSION IN RESPECT OF EACH PROJECT AND DEMONSTRA TED THAT AS PER THE BID DOCUMENT AND TERMS OF THE AGREEMENT THE WORK IN CLUDED DESIGNING, CONSTRUCTION, COMMISSIONING, TESTING, TRIAL RUN ETC . THIS ALSO INCLUDED TRAINING OF THE PERSONNEL. ALL THREE AGREEMENTS WER E PRODUCED AND WERE EXAMINED IN DETAIL. APPELLANT'S CLAIM THAT IT WAS N OT A MERE CONTRACTOR WAS EVIDENCED FROM THESE DOCUMENTS. APPELLANT WAS F OUND TO BE A DESIGNER OF THE INFRASTRUCTURE FACILITIES WITH ITS TECHNICAL TEAM. IT ALSO CONSTRUCTED INFRASTRUCTURE FACILITIES WITH ITS RISK AND ALSO COMMISSIONED THE SAME AND CARRIED OUT TRIAL RUN. APPELLANT ALSO OPERATED AND MAINTAINED THE INFRASTRUCTURE FACILITIES CREATED BY IT FOR SOME TIME AND ALSO TRAINED THE PERSONNEL WHEN REQUIRED. CONSIDERI NG THESE FACTS IT CANNOT BE SAID THAT APPELLANT WAS A MERE CONTRACTOR AND NOT A DEVELOPER. ALL THE DECISIONS REFERRED BY THE ASSESS ING OFFICER AND APPELLANT WERE ANALYSED AND IN THE LIGHT OF FACTS O F THE APPELLANT, IT IS QUITE CLEAR THAT IN RESPECT OF THESE THREE PROJECTS , APPELLANT WAS DEVELOPER. APPELLANT RELIED UPON A RECENT DECISION OF ITAT, RAJKOT DATED 23.9.10 IN ITA NO.1111/RJT/2010 IN THE CASE OF M/S TARMET BEL (JV) KCL, RAJKOT VS. ITO WD 1(4), RAJKOT. ALL RELEVANT D ECISION OF THE ISSUE WERE DISCUSSED IN THIS DECISION. THE RELEVANT EXTRA CT OF THIS ORDER IS AS UNDER :- ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 9 IN THE PRESENT CASE, WE HAVE ALREADY HELD THAT ALT HOUGH THE APPELLANT ENTERED INTO A CONTRACT WITH THE GOVT., THE CONTRAC T IS PART OF THE PRIMARY CONDITION OF SEC. 80IA(4) AND FURTHER THE NATURE OF WORK CARRIED OUT SHOWS THAT THE APPELLANT NOT ONLY DIRECTLY (AND NOT INDIRECTLY) CARRIED OUT WORK AS PER THE CONTRACT BUT IT EMPLOYED VARIOUS RE SOURCES OF ITS OWN BY WAY OF MACHINERIES, TECHNICAL KNOWLEDGE, TECHNICAL AND OTHER MANPOWER, MATERIALS ETC. AND ALSO FUNDED THE SAME O UT OF ITS OWN CAPITAL AND BORROWINGS. THE APPELLANT WAS REQUIRED TO FURNI SH GUARANTEES INCLUDING FREE MAINTENANCE OF THE INFRASTRUCTURE FA CILITIES. ALL THESE FACTORS COMBINED CLEARLY GO TO SHOW THAT THE APPELL ANT ALSO ASSUMED CONSIDERABLE RISK IN THE CAPACITY OF A BUSINESSMAN AND THE SUCH TASKS AS UNDERTAKEN, ALTHOUGH UNDER A CONTRACT AS MANDATED B Y THE SECTION, WOULD REQUIRE SKILLS OF PLANNING OF WORK, EMPLOYING TECHNICAL KNOW-HOW TO EXECUTE THE WORK AND TO FACE THE CONSEQUENCES OF ATTENDANT RISKS. WE FIND THAT THE RISKS ORE UPON THE ASSESSEE AND NOT U PON THE GOVT, THESE ELEMENTS ARE GENERALLY MISSING IN THE CASE OF A SUB -CONTRACTOR. HERE, THE APPELLANT IS DIRECTLY ENGAGED IN PERFORMING ITS FUN CTIONS FURTHER, IN THE CASE OF OM METALS INFRAPROJECTS LTD.(SUPRA), IT IS HELD THAT IF IT IS THE ASSESSEE MOBILIZING PEOPLE, PLANTS, TECHNICAL EXPER TISE ETC., THE ASSESSEE CAN BE SAID TO BE A DEVELOPER AND THAT THE ASSESSEE CANNOT BE DENIED DEDUCT/ON FROM THE PROFITS OF DEVELOPING THE INFRAS TRUCTURE FACILITY THOUGH IT MAY NOT OPERATE OR MAINTAIN THE SAME, PAR TICULARLY IN VIEW OF THE INSERTION OF THE WORD 'OR' IN SEC. 80IA(4).' HONORABLE ITAT HELD THAT IF ASSESSEE ASSUMES THE RI SK OF PROJECT, PLAN THE PROJECT WORK, EMPLOY TECHNICAL SKILLS, MOBILIZE PEOPLE, FUNDS AND RESOURCES THEN ASSESSEE CANNOT BE DENIED THE DEDUCT ION FROM THE PROFIT OF DEVELOPING INFRASTRUCTURE. APPELLANT'S CASE IS IDEN TICAL SINCE IN RESPECT OF THESE THREE PROJECTS APPELLANT DESIGNED THE INFRAST RUCTURE PROJECTS, TOOK RISK OF THE PROJECT, COMMISSIONED THE PROJECT AND C ONDUCTED TRIAL RUN, DEPLOYED ITS OWN RESOURCES. IN THE LIGHT OF THESE F ACTS APPELLANT CANNOT BE TERMED AS MERE CONTRACTOR. SINCE APPELLANT PERFO RM ALL THOSE TASKS WHICH ASST. YEAR 2005-06 & OTHERS IS PERFORMED BY A DEVELOPER, APPELLANT CANNOT BE DENIED THE BENEFIT AVAILABLE TO THE DEVELOPER. ALL THE ARGUMENTS OF THE ASSESSING OFFICER HAVE BEEN MET BY THE APPELLANT IN DETAILED SUBMISSIONS QUOTED EARLIER. RESPECTFULLY F OLLOWING THE RECENT DECISION OF 1TAT RAJKOT BENCH WHICH SQUARELY APPLIE S TO THE FACTS OF THE APPELLANT'S CASE, ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTION U/S 80IA OF IT ACT IN RESPECT OF THE THREE PROJECTS NAMELY G WSSB-ADB PROJECT, GWSSB-GONDAL AND MPAKVN PROJECT. 26. WE FURTHER OBSERVE THAT FROM THE AGREEMENT ENTE RED INTO BY THE ASSESSEE WITH GWSSB & MPAKVN WITH REGARD TO THEIR SCOPE OF W ORK WHEREIN ASSESSEE IS REQUIRED TO DESIGNING (PROCESS, HYDRAULIC, STRUC TURE, EQUIPMENT AND AESTHETICALLY) PROVIDING, CONSTRUCTING AND COMMISSI ONING CONVENTIONAL WATER TREATMENT PLANT CONSISTING OF ALL CIVIL, MECHANICAL AND ELECTRICAL COMPONENTS INCLUDING NECESSARY HYDRAULIC TESTING, STRUCTURAL T ESTING, EQUIPMENT TESTING, TRIAL ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 10 RUN ETC. THE ASSESSEE IS ALSO REQUIRED TO ARRANGE C EMENT, SAND STEEL AND EQUIPMENTS ETC. AND UNDERTAKE SOIL INVESTIGATION AN D OTHER EXPLORATION WORK. IN ALL THE ASSESSEE COMPANY HAS TO DESIGN, CONSTRUCT, COMMISSION, TEST/OPERATE AND MAINTAIN WATER TREATMENT PLANT. ALL THESE CONDITION S AKIN TO THE CONTRACT AWARDED TO THE ASSESSEE DULY COME WITHIN THE AMBIT OF THE CONDITIONS LAID DOWN U/S 80IA SUB-SECTION (4) OF THE ACT. 27. WE FURTHER OBSERVE THAT SIMILAR ISSUE CAME UP B EFORE THE CO- ORDINATE BENCH, HYDERABAD IN THE CASE OF GVPR ENGINEERS LTD. VS. ACIT (2012) TAXMANN.COM 25 (HYD) WHEREIN IT HAS BEEN HELD AS UN DER :- HELD-I THE PROVISIONS OF SECTION 80-IA(4) , WHEN INTRODUCED AFRESH BY THE FINANCE ACT , 1999, THE PROVISIONS UNDER SECTION 80-IA(4A) WERE DELETED FROM THE ACT. THE DEDUCTION AVAILABLE FOR A NY ENTERPRISE EARLIER UNDER SECTION 80-IA(4A) IS ALSO MADE AVAILABLE UNDER SECTION 80- JA(4) ITSELF. FURTHER, THE VERY FACT THAT THE LEGISLATUR E MENTIONED THE WORDS (I ) 'DEVELOPING' OR (II) 'OPERATING AND MAIN TAINING' OR (III) 'DEVELOPING, OPERATING AND MAINTAINING' CLEARLY IND ICATES THAT ANY ENTERPRISE WHICH CARRIED ON ANY OF THESE THREE ACTI VITIES WOULD BECOME ELIGIBLE FOR DEDUCTION. THEREFORE, THERE IS NO AMBI GUITY IN THE ACT. WHERE AN ASSESSEE INCURRED EXPENDITURE FOR PURCHASE OF MA TERIALS HIMSELF AND EXECUTES THE DEVELOPMENT WORK, I.E., CARRIES OUT TH E CIVIL CONSTRUCTION WORK, HE WILL BE ELIGIBLE FOR TAX BENEFIT UNDER SECTION 80-1A . IN CONTRAST TO THIS, AN ASSESSES, WHO ENTERS INTO A CONTRACT WI TH ANOTHER PERSON INCLUDING GOVERNMENT OR AN UNDERTAKING OR ENTERPRIS E REFERRED TO IN SECTION 80-IA , FOR EXECUTING WORKS CONTRACT, WILL NOT BE ELIGIBL E FOR THE TAX BENEFIT UNDER SECTION 80-IA . THE WORD 'OWNED' IN SUB- CLAUSE (A.) OF CLAUSE (I) OF SUB-SEC.(4) OF SECTION 80-IA REFERS TO THE ENTERPRISE. BY READING OF THE SECTION, IT IS CLEAR THAT THE ENTERP RISES CARRYING ON DEVELOPMENT OF INFRASTRUCTURE DEVELOPMENT SHOULD BE OWNED BY THE COMPANY AND NOT THAT THE INFRASTRUCTURE FACILITY SH OULD BE OWNED BY A COMPANY. THE PROVISIONS ARE MADE APPLICABLE TO THE PERSON TO WHOM SUCH ENTERPRISE BELONGS TO IS EXPLAINED IN SUB-CLAU SE (A). THEREFORE, THE WORD 'OWNERSHIP' IS ATTRIBUTABLE ONLY TO THE ENTERP RISE CARRYING ON THE BUSINESS WHICH WOULD MEAN THAT ONLY COMPANIES ARE E LIGIBLE FOR DEDUCTION UNDER SECTION 80-IA(4) AND NOT ANY OTHER PERSON LIKE INDIVIDUAL, HUF, FIRM ETC. [PARA 26] ACCORDING TO SUB-CLAUSE (A ), CLAUSE ([) OF SUB-SEC TION (4) OF SECTION 80- IA , THE WORD 'IT' DENOTES THE - ENTERPRISE CARRYING O N THE BUSINESS. THE WORD 'IT' CANNOT BE RELATED TO (HE INFRASTRUCTURE F ACILITY, PARTICULARLY IN VIEW OF THE FACT THAT INFRASTRUCTURE FACILITY INCLU DES RAIL SYSTEM, HIGHWAY PROJECT, WATER TREATMENT SYSTEM, IRRIGATION PROJECT , A PORT, AN AIRPORT OR AN INLAND PORT WHICH CANNOT BE OWNED BY ANY ONE. EV EN OTHERWISE, THE WORD 'IT' IS USED TO DENOTE AN ENTERPRISE. THEREFOR E, THERE IS NO ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 11 REQUIREMENT THAT THE ASSESSEE SHOULD HAVE BEEN THE OWNER OF THE INFRASTRUCTURE FACILITY. [PARA 27] THE NEXT QUESTION TO HE ANSWERED IS WHETHER THE ASS ESSEE IS A DEVELOPER OR MERE WORKS CONTRACTOR. THE REVENUE RELIED ON THE AMENDMENTS BROUGHT IN BY THE FINANCE ACT 2007 AND 2009 TO MENTION THAT THE ACTIVITY UNDERTAKEN BY THE ASSESSEE IS AKIN (O WORKS CONTRAC T AND IT IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA(4) . WHETHER THE ASSESSEE IS A DEVELOPER OR WORKS CONTRACTOR PURELY DEPENDS ON THE NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE. EACH OF THE WORK UNDERT AKEN HAS TO HE ANALYSED AND A CONCLUSION HAS TO BE DRAWN ABOUT THE NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE. THE AGREEMENT ENTERED I NTO WITH THE GOVERNMENT OR THE GOVERNMENT BODY MAY BE A MERE WOR KS CONTRACT OR FOR DEVELOPMENT OF INFRASTRUCTURE. IT IS TO BE SEEN FROM THE AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH THE GOVERNMENT. T HE GOVERNMENT HANDED OVER THE POSSESSION OF THE PREMISES OF PROJE CTS TO THE ASSESSEE FOR THE DEVELOPMENT OF INFRASTRUCTURE FACILITY. IT IS T HE ASSESSEE'S RESPONSIBILITY TO DO ALL ACTS TILL THE POSSESSION O F PROPERTY IS HANDED OVER TO THE GOVERNMENT. THE FIRST PHASE IS TO LAKE OVER THE EXISTING PREMISES OF THE PROJECTS AND THEREAFTER DEVELOPING THE SAME INTO INFRASTRUCTURE FACILITY. SECONDLY, THE ASSESSEE SHALL FACILITATE T HE PEOPLE TO USE THE AVAILABLE EXISTING FACILITY EVEN WHILE THE PROCESS OF DEVELOPMENT IS IN PROGRESS. ANY LOSS TO THE PUBLIC CAUSED IN THE PROC ESS WOULD BE THE RESPONSIBILITY OF THE ASSESSEE. THE ASSESSEE HAS TO DEVELOP THE INFRASTRUCTURE FACILITY. IN THE PROCESS, ALL THE WO RKS ARC TO BE EXECUTED BY THE ASSESSEE. IT MAY BE LAYING OF A DRAINAGE SYSTEM : MAY BE CONSTRUCTION OF A PROJECT: PROVISION OF WAY FOR CATTLE AND BULLO CK CARTS IN THE VILLAGE; PROVISION FOR TRAFFIC WITHOUT ANY HINDRANCE, THE AS SESSEE'S DUTY IS TO DEVELOP INFRASTRUCTURE WHETHER IT INVOLVES CONSTRUC TION OF A PARTICULAR HEM AS AGREED TO IN THE AGREEMENT OR NOT. THE AGREE MENT IS NOT FOR A SPECIFIC WORK, IT IS FOR DEVELOPMENT OF FACILITY AS A WHOLE. THE ASSESSEE IS NOT ENTRUSTED WITH ANY SPECIFIC WORK TO ASST. YEAR 2005-06 & OTHERS HE DONE BY THE ASSESSEE. THE MATERIAL REQUIRED IS TO B E BROUGHT IN BY THE ASSESSEE BY STICKING TO THE QUALITY AND QUANTITY IR RESPECTIVE OF THE COST OF THE SUCH MATERIAL. THE GOVERNMENT DOES NOT PROVIDE ANY MATERIAL TO THE ASSESSEE. IT PROVIDES THE WORKS IN PACKAGES AND NOT AS A WORKS CONTRACT. THE ASSESSEE UTILIZES ITS FUNDS, ITS EXPERTISE, ITS EMPLOYEES AND TAKES THE RESPONSIBILITY OF DEVELOPING THE INFRASTRUCTURE FAC ILITY. THE LOSSES SUFFERED EITHER BY THE GOVERNMENT OR THE PEOPLE IN THE PROCESS OF SUCH DEVELOPMENT WOULD BE THAT OF THE ASSESSEE. THE ASSE SSEE HANDS OVER THE DEVELOPED INFRASTRUCTURE FACILITY TO THE GOVERNMENT ON COMPLETION OF THE DEVELOPMENT. THEREAFTER, THE ASSESSEE HAS TO UNDERT AKE MAINTENANCE OF THE SAID INFRASTRUCTURE FOR A PERIOD OF 12 TO 24 MO NTHS. DURING THIS PERIOD, IF ANY DAMAGES ARE OCCURRED, IT SHALL BE TH E RESPONSIBILITY OF THE ASSESSEE. FURTHER, DURING THIS PERIOD, THE ENTIRE I NFRASTRUCTURE SHALL HAVE TO BE MAINTAINED BY THE ASSESSEE ALONE WITHOUT HIND RANCE TO THE REGULAR TRAFFIC. THEREFORE, IT IS CLEAR THAT FROM AN UNDEVE LOPED AREA, ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 12 INFRASTRUCTURE IS DEVELOPED AND HANDED OVER TO THE GOVERNMENT AND AS EXPLAINED BY THE CBDT VIDE ITS CIRCULAR, DATED 18-5 -2010, SUCH ACTIVITY IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA (4). THIS CANNOT BE CONSIDERED AS A MERE WORKS CONTRACT BUT HAS TO BE C ONSIDERED AS A DEVELOPMENT OF INFRASTRUCTURE FACILITY. THEREFORE, THE ASSESSEE IS A DEVELOPER AND NOT A WORKS CONTRACTOR AS PRESUMED BY THE REVENUE. THE CIRCULAR ISSUED BY THE BOARD CLEARLY INDICATE THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 8 ()-IA(4). THE DEPARTMENT IS NOT CORRECT IN HOLDING THAT THE ASSESSEE IS A MERE CONTRACTOR IJ T HE WORK AND NOT A DEVELOPER. [PARA 28] AS PER THE PROVISIONS OF SECTION 80-IA , A PERSON BEING A COMPANY HAS TO ENTER INTO AN AGREEMENT WITH THE GOVERNMENT OR GOVE RNMENT UNDERTAKINGS. SUCH AN AGREEMENT IS A CONTRACT AND F OR THE PURPOSE OF THE AGREEMENT A PERSON MAY BE CALLED AS A CONTRACTOR AS HE ENTERED INTO A CONTRACT. BUT THE WORD 'CONTRACTOR' IS USED TO DENO TE A PERSON ENTERING INTO AN AGREEMENT FOR UNDERTAKING THE DEVELOPMENT O F INFRASTRUCTURE FACILITY. EVERY AGREEMENT ENTERED INTO IS A CONTRAC T. THE WORD 'CONTRACTOR' IS USED TO DENOTE THE PERSON WHO ENTER S INTO SUCH CONTRACT. EVEN A PERSON WHO ENTERS INTO A CONTRACT FOR DEVELO PMENT OF INFRASTRUCTURE FACILITY IS A CONTRACTOR. THEREFORE, THE CONTRACTOR AND THE DEVELOPER CANNOT HE VIEWED DIFFERENTLY. EVERY CONTR ACTOR MAY NOT BE A DEVELOPER HUT EVERY DEVELOPER DEVELOPING INFRASTRUC TURE FACILITY ON BEHALF OF THE GOVERNMENT IS A CONTRACTOR. {PARA 29] SECTION 80-IA INTENDS TO COVER THE ENTITIES CARRYING OUT DEVELOP ING, OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILI TY KEEPING IN MIND THE PRESENT BUSINESS MODELS AND INTEND TO GRANT THE INC ENTIVES TO SUCH ENTITIES. THE CBDT, ON SEVERAL OCCASIONS, CLARIFIED THAT PURE DEVELOPER SHOULD ALSO BE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80-1A WHICH ULTIMATELY CULMINATED INTO AMENDMENT UNDER SECTION 80-IA IN THE FINANCE ACT , 2001, TO GIVE EFFECT TO THE AFORESAID CIRCULARS I SSUED BY THE CBDT. TO AVOID MISUSE OF THE AFORESAID AMENDMEN T, AN EXPLANATION WAS INSERTED IN SECTION 80-IA , IN THE FINANCE ACT , 2007 TO 2009. TO CLARIFY THAT MERE WORKS CONTRACT WOULD NOT HE ELIGI BLE FOR DEDUCTIONS UNDER SECTION 80-IA . BUT, CERTAINLY, THE EXPLANATION CANNOT BE READ TO DO AWAY WITH THE ELIGIBILITY OF THE DEVELOPER; OTHERWI SE, THE PARLIAMENT WOULD HAVE SIMPLY REVERSED {HE AMENDMENT MADE IN TH E FINANCE ACT , 2001. THUS, THE AFORESAID EXPLANATION WAS INSERTED, CERTAINLY, TO DENY THE LAX HOLIDAY TO THE ENTITIES WHO DO MERE WORKS C ONTRACT OR SUB- CONTRACT AS DISTINCT FROM THE DEVELOPER. THIS IS CL EAR FROM THE EXPRESS INTENTION OF THE PARLIAMENT WHILE INTRODUCING THE E XPLANATION. THE EXPLANATORY MEMORANDUM TO FINANCE ACT , 2007 STATES THAT THE PURPOSE OF THE TAX BENEFIT HAS ALL ALONG BEEN TO ENCOURAGE INVESTMENT IN DEVELOPMENT OF INFRASTRUCTURE SECTOR AND NOT FOR TH E PERSONS WHO MERELY EXECUTE THE CIVIL CONSTRUCTION WORK. IT CATEGORICAL LY STATES THAT THE DEDUCTION UNDER SECTION 80-IA IS AVAILABLE TO DEVELOPERS WHO UNDERTAKES ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 13 ENTREPRENEURIAL AND INVESTMENT RISK AND NO! TO THE CONTRACTORS, WHO UNDERTAKE ONLY BUSINESS RISK. WITHOUT ANY DOUBT, TH E ASSESSEE CLEARLY DEMONSTRATED THAT IT HAS UNDERTAKEN HUGE RISKS IN T ERMS OF DEPLOYMENT OF TECHNICAL PERSONNEL, PLANT AND MACHINERY, TECHNICAL KNOW-HOW, EXPERTISE AND FINANCIAL RESOURCES. AFTER THE AMENDMENT SECTION 80-IA(4) IS READ AS (\) DEVELOPING ASST. YEAR 2005-06 & OTHERS OR (\\) OPERATING AND MAINTAINING OR (\\\) DEVELOPING, OPERATING AND MAIN TAINING ANY INFRASTRUCTURE FACILITY. WHILE PRIOR TO AMENDMENT T HE 'OR' BETWEEN THREE ACTIVITIES WAS NOT THERE, AFTER THE AMENDMENT 'OR' HAS BEEN INSERTED WITH EFFECT FROM 1-4-2002 BY FINANCE ACT , 2001. THEREFORE, IF THE CONTRACTS INVOLVE DESIGN, DEVELOPMENT, OPERATING AND MAINTENA NCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PE RIOD, THEN SUCH CONTRACTS CANNOT BE CALLED AS SIMPLE WORKS CONTRACT TO DENY THE DEDUCTION UNDER . SECTION 80-IA . THE CONTRACTS WHICH CONTAIN ABOVE FEATURES TO BE SEGREGATED, THIS DEDUCTION UNDER SECTION 80-IA HAVE TO BE GRANTED AND THE OTHER AGREEMENTS WHICH ARE PURE WOR KS CONTRACTS HIT BY THE EXPLANATION TO SECTION 80-JA(13) , THOSE WORK ARE NOT ENTITLED FOR DEDUCTION UNDER SECTION 80-IA . THE PROFIT FROM THE CONTRACTS WHICH INVOLVE RESIGN, DEVELOPMENT, OPERATING AND MAINTENA NCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PE RIOD IS TO BE COMPUTED BY THE ASSESSING OFFICER ON PRO RATA BASIS OF TURNO VER. THE ASSESSING OFFICER IS DIRECTED TO EXAMINE THE RECORDS ACCORDIN GLY AND GRANT DEDUCTION ON ELIGIBLE TURNOVER AS DIRECTED ABOVE. [ PARA 30] 28. FURTHER SIMILAR ISSUE ALSO CAME UP BEFORE THE T RIBUNAL, HYDERABAD BENCH IN THE CASE OF SUSHEE HI TECH CONSTRUCTIONS (P) LTD . VS. DCIT (2013) 33 TAXMANN.COM 236 (HYDERABAD-TRIB), WHEREIN DEALING W ITH THE ISSUE HAS DECIDED THE SAME BY OBSERVING AS BELOW :- FACTS -1 THE ASSESSEE HAD UNDERTAKEN THE DEVELOPMENT OF IRRI GATION CANALS AND RAILWAY TRACKS INCLUDING CONVERSION OF GAUGE. THE P ROJECT PREMISES WAS HANDED OVER BY THE GOVERNMENT TO THE ASSESSEE FOR D EVELOPING INTO AN INFRASTRUCTURE AND THE SCOPE OF WORK INVOLVED TAKIN G OVER OF THE SITE AND DEVELOPING THE SITE, RE-HANDING OVER OF THE SITE AF TER DUE DEVELOPMENT. THEREAFTER, THE ASSESSEE WOULD HAVE TO MAINTAIN THE DEVELOPED INFRASTRUCTURE FACILITY FOR A CERTAIN PERIOD AS PRO VIDED IN THE AGREEMENT. THE RISK INVOLVED DURING THE PERIOD FROM THE DATE O F TAKING OVER TILL THE DATE OF HANDING OVER OF THE INFRASTRUCTURE WOULD BE THAT OF THE ASSESSEE. ANY LOSS SUFFERED IN THE PROCESS OF DEVELOPMENT WOU LD BE THAT OF THE ASSESSEE. ASSESSEE CLAIMED THAT ACTIVITIES UNDERTAK EN BY IT WERE DEVELOPMENT OF INFRASTRUCTURE FACILITY AND, THEREFO RE, IT WAS ENTITLED TO DEDUCTION UNDER SECTION 80-IA(4) . THE LOWER REVENUE AUTHORITIES DISALLOWED THE DEDU CTION ON THE GROUND THAT ASSESSEE WAS A MERE WORKS CONTRACTOR AND NOT A DEVELOPER. THE ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 14 AUTHORITIES TOOK THE VIEW THAT UNLESS OPERATION OF THE INFRASTRUCTURE FACILITY WAS ALSO UNDERTAKEN, THE ASSESSEE WOULD NO T BE ELIGIBLE FOR DEDUCTION. ON APPEAL HELD -I OWNERSHIP OF INFRASTRUCTURE FACILITY NOT REQUIRED F OR DEDUCTION UNDER SECTION 80-IAASST. YEAR 2005-06 & OTHERS THE PROV ISIONS OF SECTION 80- 1 A(4) WHEN INTRODUCED AFRESH BY THE FINANCE ACT , 1999, THE PROVISIONS UNDER SECTION 80-IA(4A) WERE DELETED FROM THE ACT. THE DEDUCTIONS AVAILABLE FOR ANY ENTERPRISE EARLIER UNDER SECTION 80-1A(4A) ARE ALSO MADE AVAILABLE UNDER SECTION 80-IA(4) ITSELF. FURTHER, THE VERY FACT THAT THE LEGISLATURE MENTIONED THE WORDS (/') 'DEVELOPIN G' OR (//) 'OPERATING AND MAINTAINING1 OR (/;'/') 'DEVELOPING, OPERATING AND MAINTAINING1 CLEARLY INDICATED THAT ANY ENTERPRISE WHICH CARRIED ON ANY OF THESE THREE ACTIVITIES WOULD BECOME ELIGIBLE FOR DEDUCTION. THE REFORE, THERE IS NO AMBIGUITY IN THE INCOME-TAX ACT . WHERE AN ASSESSEE INCURRES EXPENDITURE FOR PURCHASE OF MATERIALS HIMSELF AND EXECUTES THE DEVELOPMENT WORK, I.E., CARRIES OUT THE CIVIL CONSTRUCTION WORK, HE W ILL BE ELIGIBLE FOR TAX BENEFIT UNDER SECTION 80-IA . IN CONTRAST TO THIS, AN ASSESSEE, WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON INCLUDING THE G OVERNMENT OR AN UNDERTAKING OR ENTERPRISE REFERRED TO IN SECTION '8 0-IA FOR EXECUTING WORKS CONTRACT, WILL NOT BE ELIGIBLE FOR THE TAX BE NEFIT UNDER SECTION 80- IA . THE WORD 'OWNED' IN SUB-CLAUSE (A] OF CLAUSE (1) OF SUB-SECTION (4) OF SECTION 80-IA REFERS TO THE ENTERPRISE. BY READING OF THE SECTIO N, IT IS CLEAR THAT THE ENTERPRISES CARRYING ON DEVELOPMENT OF INFRASTRUCTURE DEVELOPMENT SHOULD BE OWNED BY THE COMPANY AND NOT THAT THE INFRASTRUCTURE FACILITY SHOULD BE OWNED BY A COMPAN Y. THAI THE PROVISIONS ARE MADE APPLICABLE TO THE PERSON TO WHO M SUCH ENTERPRISE BELONGS TO IS EXPLAINED IN SUB-CLAUSE (A). THEREFOR E, THE WORD 'OWNERSHIP' IS ATTRIBUTABLE ONLY TO THE ENTERPRISE CARRYING ON THE BUSINESS WHICH WOULD MEAN THAT ONLY COMPANIES ARE ELIGIBLE F OR DEDUCTION UNDER SECTION 80-1 A(4) AND NOT ANY OTHER PERSON LIKE IND IVIDUAL. HUF, FIRM. ETC. [PARA 31] ACCORDING TO SUB-CLAUSE (A), CLAUSE (/) OF SUB-SE CTION (4) OF SECTION 80- IA . THE WORD 'IT' DENOTES THE ENTERPRISE CARRYING ON (HE BUSINESS. THE WORD 'IT' CANNOT BE RELATED TO THE INFRASTRUCTURE F ACILITY, PARTICULARLY IN VIEW OF THE FACT THAT INFRASTRUCTURE FACILITY INCLU DES RAIL SYSTEM. HIGHWAY PROJECT, WATER TREATMENT SYSTEM, IRRIGATION PROJECT , A PORT, AN AIRPORT OR AN INLAND PORT WHICH CANNOT BE OWNED BY ANY ONE. EV EN OTHERWISE, THE WORD 'IT' IS USED TO DENOTE AN ENTERPRISE. THEREFOR E, THERE IS NO REQUIREMENT THAT THE ASSESSEE SHOULD HAVE BEEN THE OWNER OF THE INFRASTRUCTURE FACILITY. [PARA 32] ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 15 ASSESSEE IS A DEVELOPER AND NOT A WORKS CONTRACTOR WHETHER THE ASSESSEE IS A DEVELOPER OR WORKS CONT RACTOR IS PURELY DEPENDS ON THE NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE. BACH OF THE WORK UNDERTAKEN HAS TO BE ANALYZED AND A CONCLU SION HAS TO BE DRAWN ABOUT THE NATURE OF THE WORK UNDERTAKEN BY TH E ASSESSEE. THE AGREEMENT ENTERED INTO WITH THE GOVERNMENT OR THE G OVERNMENT BODY MAY BE A MERE WORKS CONTRACT OR FOR DEVELOPMENT OF INFRASTRUCTURE. IT IS TO BE SEEN FROM THE AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH THE GOVERNMENT. IN THE INSTANT CASE, THE GOVERNMENT HANDED OVER T HE POSSESSION OF THE PREMISES OF PROJECTS TO THE ASSESSEE FOR THE DEVELO PMENT OF INFRASTRUCTURE FACILITY. IT IS THE ASSESSEE'S RESPONSIBILITY TO DO ALL ACTS TILL THE POSSESSION OF PROPERTY IS HANDED OVER TO THE GOVERNMENT. THE F IRST PHASE IS TO TAKE OVER THE EXISTING PREMISES OF THE PROJECTS AND, THE REAFTER, DEVELOPING THE SAME INTO INFRASTRUCTURE FACILITY. SECONDLY, THE AS SESSEE SHALL FACILITATE THE PEOPLE TO USE THE AVAILABLE EXISTING FACILITY E VEN WHILE THE PROCESS OF DEVELOPMENT IS IN PROGRESS. ANY LOSS TO THE PUBLIC CAUSED IN THE PROCESS WOULD BE THE RESPONSIBILITY OF THE ASSESSEE. THE AS SESSEE HAS TO DEVELOP THE ASST. YEAR 2005-06 & OTHERS INFRASTRUCTURE FACI LITY. IN THE PROCESS, ALL THE WORKS ARE TO BE EXECUTED BY THE ASSESSEE. IT MA Y BE LAYING OF A DRAINAGE SYSTEM; CONSTRUCTION OF A PROJECT; PROVISI ON OF WAY FOR THE CATTLE AND BULLOCK CARTS IN THE VILLAGE; PROVISION FOR TRAFFIC WITHOUT ANY HINDRANCE, THE ASSESSEE'S DUTY IS TO DEVELOP INFRAS TRUCTURE WHETHER IT INVOLVES CONSTRUCTION OF A PARTICULAR ITEM AS AGREE D TO IN THE AGREEMENT OR NOT. THE AGREEMENT IS NOT FOR A SPECIFIC WORK; I T IS FOR DEVELOPMENT OF FACILITY AS A WHOLE. THE ASSESSEE IS NOT ENTRUSTED WITH ANY SPECIFIC WORK TO BE DONE BY THE ASSESSEE. THE MATERIAL REQUIRED I S TO BE BROUGHT IN BY THE ASSESSEE BY STICKING TO THE QUALITY AND QUANTIT Y IRRESPECTIVE OF THE COST OF SUCH MATERIAL. THE GOVERNMENT DOES NOT PROV IDE ANY MATERIAL TO THE ASSESSEE. IT PROVIDES THE WORKS IN PACKAGES AND NOT AS A WORKS CONTRACT. THE ASSESSEE UTILIZES ITS FUNDS, ITS EXPE RTISE, ITS EMPLOYEES AND TAKES THE RESPONSIBILITY OF DEVELOPING THE INFRASTR UCTURE FACILITY. THE LOSSES SUFFERED EITHER BY THE GOVT. OR THE PEOPLE I N THE PROCESS OF SUCH DEVELOPMENT WOULD BE THAT OF THE ASSESSEE. THE ASSE SSEE HANDS OVER THE DEVELOPED INFRASTRUCTURE FACILITY TO THE GOVERNMENT ON COMPLETION OF THE DEVELOPMENT. THEREAFTER, THE ASSESSEE HAS TO UNDERT AKE MAINTENANCE OF THE SAID INFRASTRUCTURE FOR A PERIOD OF I 2 (O 24 M ONTHS. DURING THIS PERIOD, IF ANY DAMAGES ARE OCCURRED, IT SHALL BE TH E RESPONSIBILITY OF THE ASSESSEE. FURTHER, DURING THIS PERIOD, THE ENTIRE I NFRASTRUCTURE SHALL HAVE TO BE MAINTAINED BY THE ASSESSEE ALONE WITHOUT HIND RANCE TO THE REGULAR TRAFFIC. THEREFORE, IT IS CLEAR THAT FROM AN UNDEVE LOPED AREA, INFRASTRUCTURE IS DEVELOPED AND HANDED OVER TO THE GOVERNMENT AND AS EXPLAINED BY THE CBDT VIDE ITS CIRCULAR DATED 18-05 -2010. SUCH ACTIVITY IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA (4). THIS CANNOT BE ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 16 CONSIDERED AS A MERE WORKS CONTRACT BUT HAS TO BE C ONSIDERED AS A DEVELOPMENT OF INFRASTRUCTURE FACILITY. THEREFORE: THE ASSESSEE IS A DEVELOPER AND NOT A WORKS CONTRACTOR AS PRESUMED BY THE REVENUE. THE CIRCULAR ISSUED BY THE BOARD CLEARLY INDICATES THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTI ON UNDER SECTION 80- IA (4). THE DEPARTMENT IS NOT CORRECT IN HOLDING THAT THE ASSESSEE IS A MERE CONTRACTOR OF THE WORK AND NOT A DEVELOPER. [P ARA 33] ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80-IA AS PER THE PROVISIONS OF THE SECTION 80-IA , A PERSON BEING A COMPANY HAS TO ENTER INTO AN AGREEMENT WITH THE GOVERNMENT OR GOVERNMENT UNDERTAKINGS. SUCH AN AGREEMENT IS A CONTRACT AND F OR THE PURPOSE OF THE AGREEMENT A PERSON MAY BE CALLED AS A CONTRACTOR AS HE ENTERED INTO A CONTRACT. BUT THE WORD 'CONTRACTOR' IS USED TO DENO TE A PERSON ENTERING INTO AN AGREEMENT FOR UNDERTAKING THE DEVELOPMENT O F INFRASTRUCTURE FACILITY. EVERY AGREEMENT ENTERED INTO IS A CONTRAC T. THE WORD 'CONTRACTOR' IS USED TO DENOTE THE PERSON WHO ENTER S INTO SUCH CONTRACT. EVEN A PERSON WHO ENTERS INTO A CONTRACT FOR DEVELO PMENT OF INFRASTRUCTURE FACILITY IS A CONTRACTOR. THEREFORE, THE CONTRACTOR AND THE DEVELOPER CANNOT BE VIEWED DIFFERENTLY. EVERY CONTR ACTOR MAY NOT BE A DEVELOPER BUT EVERY DEVELOPER DEVELOPING INFRASTRUC TURE FACILITY ON BEHALF OF THE GOVERNMENT IS A CONTRACTOR. [PARA 34] SECTION 80-IA INTENDED TO COVER THE ENTITIES CARRYING OUT DEVELO PING, OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILI TY KEEPING IN MIND THE PRESENT BUSINESS MODELS AND INTENDS TO GRANT THE IN CENTIVES TO SUCH ENTITIES. THE CBDT, ON SEVERAL OCCASIONS, CLARIFIED THAT PU RE DEVELOPER SHOULD ALSO BE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80-IA , WHICH ULTIMATELY CULMINATED INTO AMENDMENT ASST. YEAR 2005-06 & OTHE RS UNDER SECTION 80-IA IN THE FINANCE ACT , 2001. TO GIVE EFFECT TO THE CIRCULARS ISSUED BY THE CBDT. LO AVOID MISUSE OF THE AFORESAID AMENDMEN T, AN EXPLANATION WAS INSERTED IN SECTION 80-IA IN THE FINANCE ACT 2007 AND 2009. TO CLARIFY THAT MERE WORKS CONTRACT WOULD NOT BE ELIGI BLE FOR DEDUCTIONS UNDER SECTION 80-IA . BUT. CERTAINLY, THE EXPLANATION CANNOT BE READ TO DO AWAY WITH THE ELIGIBILITY OF THE DEVELOPER; OTHERWI SE, THE PARLIAMENT WOULD HAVE SIMPLY REVERSED THE AMENDMENT MADE IN TH E FINANCE ACT , 2001. THUS, THE AFORESAID EXPLANATION WAS INSERTED, CERTAINLY, TO DENY THE TAX HOLIDAY TO THE ENTITIES WHO DO MERE WORKS C ONTACT OR SUB-CONTRACT AS DISTINCT FROM THE DEVELOPER. THIS IS CLEAR FROM THE EXPRESS INTENSION OF THE PARLIAMENT WHILE INTRODUCING THE EXPLANATION. T HE EXPLANATORY MEMORANDUM TO FINANCE ACT , 2007, STATES THAT THE PURPOSE OF THE TAX BENEFIT HAS ALL ALONG BEEN TO ENCOURAGE INVESTMENT IN DEVELOPMENT OF INFRASTRUCTURE SECTOR AND NOT FOR THE PERSONS WHO M ERELY EXECUTE THE CIVIL ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 17 CONSTRUCTION WORK. IT CATEGORICALLY STATES THAT THE DEDUCTION UNDER SECTION 80-IA IS AVAILABLE TO DEVELOPERS WHO UNDERTAKE ENTREPRENEURIAL AND INVESTMENT RISK AND NOT FOR THE CONTRACTORS, WHO UNDERTAKE ONLY BUSINESS RISK. WITHOUT ANY DOUBT, TH E ASSESSEE CLEARLY DEMONSTRATED THAT IT HAS UNDERTAKEN HUGE RISKS IN T ERMS OF DEPLOYMENT OF TECHNICAL PERSONNEL, PLAIN AND MACHINERY, TECHNICAL KNOW-HOW, EXPERTISE AND FINANCIAL RESOURCES. FURTHER, AFTER THE AMENDMENT THE SECTION 80-IA(4) READ AS (/) DEVELOPING OR (//') OPERATING AND MAINTAINING OR (/ //') DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILI TY. PRIOR TO AMENDMENT THE 'OR' BETWEEN THREE ACTIVITIES WAS NOT THERE, AFTER THE- AMENDMENT 'OR' HAS BEEN INSERTED WITH EFFECT FROM 1 -4-2002 BY FINANCE ACT , 2001. THEREFORE, THE ASSESSEE SHOULD NOT BE DENIED THE DEDUCTION UNDER SECTION 80-IA , AS IF THE CONTRACTS INVOLVE DEVELOPMENT, OPERATIN G, MAINTENANCE, FINANCIAL INVOLVEMENT AND DEFECT CORRE CTION AND LIABILITY PERIOD, THEN SUCH CONTRACTS CANNOT BE CALLED AS SIM PLE WORKS CONTRACT. THE CONTRACTS WHICH CONTAIN ABOVE FEATURES ARE TO B E SEGREGATED AND ON THIS DEDUCTION UNDER SECTION 80-IA HAS TO BE GRANTED AND THE OTHER AGREEMENTS, WHICH ARE PURE WORKS CONTRACTS HIT BY T HE EXPLANATION TO SECTION 80- IA(13), ARE NOT ENTITLED FOR DEDUCTION UNDER SECTION 80-IA . THE PROFIT FROM SUCH CONTRACTS WHICH INVOLVE DEVELO PMENT, OPERATING, MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORR ECTION AND LIABILITY PERIOD IS TO BE COMPUTED BY ASSESSING OFFICER ON PR O-RATA BASIS OF TURNOVER. THE ASSESSING OFFICER IS DIRECTED TO EXAM INE AND GRANT DEDUCTION ON ELIGIBLE TURNOVER AS DIRECTED ABOVE. [ PARA 35] FURTHER, WHERE THE ASSESSEE HAS CARRIED OUT THE D EVELOPMENT OF INFRASTRUCTURE WORK IN CONSORTIUM AND NOT AS A SUB- CONTRACTOR, THEN ALSO THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80-IA . THE SAME IS ALSO APPLICABLE IN CASE OF WORK ALLOTTED BY GOVERNM ENT CORPORATION/GOVERNMENT BODIES. [PARA 37] 29. RESPECTFULLY FOLLOWING THE DECISIONS OF THE CO- ORDINATE BENCH IN THE ABOVE REFERRED CASES AND APPLYING THE FACTS TO THESE FACT S AS WELL AS THE PROVISIONS OF SEC.80IA SUB-SEC.(4) OF THE ACT, WE ARE OF THE ASST . YEAR 2005-06 & OTHERS CONSIDERED VIEW THAT ASSESSEE IS NOT MERELY A CONTR ACTOR BUT A DEVELOPER LOOKING TO THE SCOPE OF ACTIVITIES UNDERTAKEN BY IT FOR THE COMPLETION OF THE PROJECT AND, THEREFORE, ELIGIBLE FOR DEDUCTION U/S 80IA OF THE A CT. WE THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AN D UPHOLD THE SAME. THE GROUND RAISED BY THE REVENUE IS DISMISSED. THE APPE AL OF REVENUE IS DISMISSED. ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 18 6. THERE IS NO DISPARITY ON THE FACTS. THE LD.CIT( A) HAS FOLLOWED THE ORDERS OF HIS PREDECESSOR WHICH HAVE BEEN CONSIDERE D BY THE TRIBUNAL IN EARLIER YEARS. THEREFORE, RESPECTFULLY FOLLOWING T HE ORDERS OF CO-ORDINATE BENCH, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF A PPEAL RAISED BY THE REVENUE ON THIS ISSUE IN ALL THESE THREE YEARS. N O OTHER ISSUE IS AGITATED BY THE REVENUE IN ITS APPEALS HENCE, APPEALS OF THE RE VENUE ARE DISMISSED. 7. NOW WE TAKE CROSS-OBJECTIONS OF THE ASSESSEE IN ALL THREE YEARS. 8. FIRST ISSUE IN ALL THESE THREE YEARS AGITATED BY THE ASSESSEE IS THAT THE LD.CIT(A) HAS UPHELD THE ASSESSMENT OF INTEREST INC OME AS INCOME FROM OTHER SOURCES AND UPHELD EXCLUSION OF THESE AMOUNTS FROM ELIGIBLE PROFIT FOR GRANT OF DEDUCTION UNDER SECTION 80IA. THE LD.COUNSEL FO R THE ASSESSEE FAIRLY ADMITTED THAT IN EARLIER YEARS, THIS ISSUE WAS NOT AGITATED BEFORE THE TRIBUNAL. CONSIDERING THE SMALLNESS OF THE AMOUNT INVOLVED IN ALL THESE YEARS, THE ISSUE WAS NOT PRESSED BY THE ASSESSEE, HENCE THESE GROUND S ARE REJECTED IN ALL THREE YEARS. INTEREST INCOME ON FDR HAS RIGHTLY BEEN ASS ESSED AS INCOME FROM OTHER SOURCES AND RIGHTLY BEEN EXCLUDED FROM ELIGIB LE PROFIT FROM THE AMOUNT OF DEDUCTION UNDER SECTION 80IA. ACCORDINGLY, THIS ISSUE IS DECIDED AGAINST THE ASSESSEE. 9. IN THE NEXT COMMON GROUNDS, THE ASSESSEE HAS PLE ADED THAT THE LD.CIT(A) HAS UPHELD DISALLOWANCE OF EMPLOYEES CONT RIBUTION TOWARDS PF AND ESI, WHICH WAS DEPOSITED AFTER EXPIRY OF TIME LIMIT . THIS DISALLOWANCE WAS MADE WITH THE AID OF SECTION 2(24)(X) OF THE INCOME TAX ACT. THE LD.COUNSEL FOR THE ASSESSEE DID NOT DISPUTE THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN TH E CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPN., 366 ITR 170 WHEREIN HO NBLE COURT HAS HELD THAT IF EMPLOYEES CONTRIBUTION IS NOT BEING DEPOSI TED WITHIN TIME LIMIT ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 19 PRESCRIBED IN PROVIDENT FUND AND ESI ACT THEN DEDUC TION OF SUCH AMOUNT WILL NOT BE ADMISSIBLE TO THE ASSESSEE. THE LD.CIT(A) H AS RIGHTLY BASED ITS RELIANCE UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH CO URT CITED SUPRA. WE DO NOT ANY REASONS TO INTERFERE ON THIS ISSUE ACCORDINGLY, THIS GROUND OF APPEAL IS REJECTED IN ALL THREE ASSESSMENT YEARS. 10. NEXT GROUND RAISED IN CO NO.98/AHD/2015 IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF ADDITIONAL DEPRECIATION. IT EMERGES OUT FROM THE RECORD THAT ASSESSEE HAS CLAIMED ADDIT IONAL DEPRECIATION ON WATER TREATMENT PLANT. THIS CLAIM OF THE ASSESSEE WAS DI SALLOWED BY THE AO ON THE GROUND THAT IT IS JUST ENGAGED IN DEVELOPMENT OF IN FRASTRUCTURE AND NOT ENGAGED IN ANY MANUFACTURING ACTIVITY. HENCE, ADDI TIONAL DEPRECIATION IS NOT ADMISSIBLE. ON APPEAL, THE LD.CIT(A) CONFIRMED THI S DISALLOWANCE. 11. BEFORE US, THE LD.COUSNEL FOR THE ASSESSEE CONT ENDED THAT THIS DISALLOWANCE WILL INCREASE THE PROFIT OF THE ASSESS EE AND 80IA WOULD BE ADMISSIBLE TO IT. HOWEVER, HE DID NOT ADVANCE MUCH ARGUMENT ON THE CLAIM FOR ADDITIONAL DEPRECIATION. CONSIDERING THIS ASPE CT, WE ALLOW ALTERNATE CLAIM OF THE ASSESSEE AND DIRECT THE AO TO INCLUDE THIS A MOUNT FOR ELIGIBLE PROFIT FOR GRANT OF DEDUCTION UNDER SECTION 80IA. THIS GROUND IS PARTLY ALLOWED. 12. IN THE ASSTT.YEAR 2012-13, THE ASSESSEE HAS RAI SED ONE MORE GROUND IN ITS CO, WHEREIN IT HAS PLEADED THAT THE LD.CIT(A) H AS ERRED IN CONFIRMING THE DISALLOWANCE OF CLAIM OF BAD DEBTS. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THOUGH SECURITY DEPOSITS FOR BUSINESS WAS ALLO WABLE AS DEDUCTION UNDER SECTION 37, BUT EVEN IF IT IS DISALLOWED, THE AO BE DIRECTED TO CONSIDER THIS ISSUE FOR DEDUCTION UNDER SECTION 80IA. SINCE SPEC IFIC ARGUMENTS WERE NOT RAISED QUA MAIN FOLD OF CONTENTIONS, THEREFORE, CONSIDERING A LTERNATIVE CONTENTIONS OF THE ASSESSEE, WE REMIT THIS ISSUE TO THE FILE OF THE AO FOR ITA NO.151/AHD/2015 AND 2 OTHERS WITH CO DCIT VS. AQUAFIL POLYMERS CO.P.LTD. 20 EXAMINATION. THE LD.AO SHALL ADJUDICATE THIS ISSUE WITH THE ANGLE WHETHER THIS AMOUNT CAN BE CONSTRUED AS ELIGIBLE FOR GRANT OF DEDUCTION UNDER SECTION 80IA OR NOT. IF IT HAS LIVE NEXUS AND BE CONSTRUED AS DERIVED FROM INFRASTRUCTURE ACTIVITIES OF THE ASSESSEE, THEN 80 IA BE GRANTED TO THE ASSESSEE. OUR ABOVE OBSERVATIONS WILL NOT IMPAIR OR INJURE TH E CASE OF THE AO AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE. THE LD.AO SHALL DECIDE IT IN ACCORDANCE WITH LAW. 13. IN THE RESULT, THE APPEALS OF THE REVENUE ARE D ISMISSED. CROSS OBJECTIONS IN THE ASSTT.YEAR 2010-11 IS DISMISSED. CROSS-OBJECTIONS IN THE ASSTT.YEAR 2011-12 AND 2012-13 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 1 ST NOVEMBER, 2018 AT AHMEDABAD. S D / - (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/11/2018
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