Unitech-NCC (JV), Hyderabad V. DCIT, Hyderabad

ITA 1447/HYD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2808 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 23-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: S RAMA RAO
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 1333/HYD/2011 A.Y. 2006-07 I.T.A. NO. 744/HYD/2006 A.Y. 2003-04 I.T.A. NO. 1447/HYD/2010 A.Y. 2005-06 M/S. UNITECH-NCC (JV) HYDERABAD PAN: AAATU0669D V. THE DEPUTY CIT CIRCLE-6(1) HYDERABAD APPELLANT RESPONDENT I.T.A. NO. 563/HYD/2006 ASSESSMENT YEAR 2002-03 THE DEPUTY CIT CIRCLE-6(1) HYDERABAD V. M/S. UNITECH-NCC (JV) HYDERABAD PAN: AAATU0669D APPELLANT RESPONDENT ASSESSEE BY: SRI S. RAMA RAO REVENUE BY: SRI Y.V.S.T. SAI DATE OF HEARING: 18.04.2013 DATE OF PRONOUNCEMENT: 29.04.2013 O R D E R PER CHANDRA POOJARI, AM: ITA NO. 1333/HYD/2011, ITA NO. 744/HYD/2006 AND ITA NO. 1447/HYD/2010 ARE ASSESSEE'S APPEALS AND ITA NO. 563/HYD/2006 IS DEPARTMENT'S APPEAL DIRECTED AGAINST DIFFERENT ORDERS OF THE CIT(A)-IV, HYDERABAD FOR TH E ABOVE ASSESSMENT YEARS. AS THE ISSUE IN ALL THESE APPEA LS IS COMMON, ALL THESE APPEALS ARE CLUBBED TOGETHER, HEA RD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. 2. THE ISSUE WITH REGARD TO GRANTING OF DEDUCTION U/S. 80IA OF THE INCOME-TAX ACT, 1961 IN RESPECT OF INFR ASTRUCTURE ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 2 FACILITY BEING HIGHWAY PROJECT UNDER AN AGREEMENT W ITH NATIONAL HIGHWAYS AUTHORITY OF INDIA (NHAI). 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE IS A REGISTERED FIRM COMPRISING OF TWO PARTNERS, M/S. UNI TECH LIMITED AND M/S. NAGARJUNA CONSTRUCTION CO. IN THE COMPUTATION OF INCOME FILED ALONG WITH THE RETURN, THE ASSESSEE HAD CLAIMED DEDUCTION U/ S. 80IA(4) IN RESP ECT OF ITS ENTIRE BUSINESS PROFITS. IT WAS CLAIMED THAT SUCH A CLAIM HAD BEEN ALLOWED BY THE CIT(A), GUNTUR IN THE ASSESSEE' S CASE FOR THE A.Y. 2002-03 BY PLACING RELIANCE ON THE DECISIO N OF THE HON'BLE MUMBAI ITAT IN THE CASE OF PATEL ENGINEERIN G (84 TTJ 446). JUSTIFYING THE CLAIM SO MADE, THE ASSESSEE HA D BEEN CONTENDING IN THE EARLIER YEARS ALSO THAT DEDUCTION UNDER SEC. 80IA IS AVAILABLE TO AN ENTERPRISE CARRYING ON THE BUSINESS OF (I) DEVELOPING, OR (II) OPERATING AND MAINTAINING, OR (III) DEVELOPING, OPERATING AND MAINTAINING, ANY INFRASTR UCTURE FACILITY. IT WAS SUBMITTED THAT SINCE THE ASSESSEE IS DEVELOPING INFRASTRUCTURE FACILITY, BEING ROADS, BY ENTERING INTO AN AGREEMENT WITH NHAI, IT IS ELIGIBLE FOR SUC H DEDUCTION. 4. HOWEVER, ON AN EXAMINATION OF THE PROVISIONS OF SEC . 80IA IN THIS REGARD, THE ASSESSING OFFICER NOTED TH AT THE ASSESSEE DID NOT OWN THE INFRASTRUCTURE FACILITY IN THE INSTANT CASE, AS IT IS OWNED BY THE NHAI. HE OPINED THAT T HE CONDITION PRESCRIBED UNDER SUBSECTION (4)(I)(C) OF THIS SECTION HAD NOT BEEN SATISFIED, IN SO FAR AS THE ASSESSEE H AS NEVER BEEN THE OWNER OF THE INFRASTRUCTURE FACILITY, AND IN SUCH A CONDITION, IT COULD NEVER START, OR WOULD NOT HAVE STARTED, TO OPERATE AND MAINTAIN THE INFRASTRUCTURE FACILITIES AT ANY POINT OF TIME. SHE OPINED THAT THE ARGUMENT OF THE ASSESS EE THAT PROFITS FROM DEVELOPMENT ARE DEDUCTIBLE WITHOUT REC OURSE TO OPERATING AND MAINTAINING, IS A WRONG INTERPRETATI ON OF SEC. ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 3 80IA(4)(I), AS ELABORATED IN THE DEPARTMENTAL CIRCU LAR NO. 717 DATED 14.8.1995. 5. THE ASSESSING OFFICER OPINED THAT THE ASSESSEE HAD NOT DEVELOPED THE FACILITY ON BOT OR BOOT OR SIMILAR OT HER BASIS. THE ASSESSING OFFICER FURTHER OPINED THAT THE FIRM WAS DEVELOPING THE INFRASTRUCTURE FACILITY ONLY IN THE CAPACITY OF A MERE CONTRACTOR. WHEREAS THE EXPLANATION TO SEC. 80 IA, INTRODUCED BY THE FINANCE ACT, 2007, WITH RETROSPEC TIVE EFFECT FROM 1.4.2000, SHOWS THAT THE PROVISIONS DO NOT APP LY TO A PERSON, WHO UNDERTAKES TO EXECUTE A WORKS CONTRACT ENTERED INTO WITH THE UNDERTAKING OR THE ENTERPRISE, AS THE CASE MAY BE. SHE NOTED THAT IN VIEW OF THE SAID EXPLANATION , THE DECISION OF THE TRIBUNAL MUMBAI BENCH IN THE CASE O F PATEL ENGINEERING (SUPRA) HAD NO RELEVANCE. ACCORDINGLY, THE CLAIM OF EXEMPTION UNDER SEC. 80IA WAS DISALLOWED. 6. BEFORE US ALSO, THE LEARNED AR RELIED ON THE ORDER OF THE TRIBUNAL PUNE BENCH IN THE CASE OF B.T. PATIL & SON A BELGAUM CONSTRUCTIONS PVT. LTD. VS. ACIT, IN ITA NO. 1408 & 1409/PN/2003 DATED 28.2.2013 STATING THAT THE ISSUE NEED NOT BE SET ASIDE AND THE ISSUE BE ADJUDICATED U/S. 8 0IA OF THE ACT RELYING ON THIS ORDER WHEREIN THE ASSESSEE IS T HE CONTRACTOR VIS-A-VIS THE PORTION ALLOTTED TO THEM A ND NOT ONLY SUBCONTRACTORS, I.E., A DIRECT PARTY TO THE MAIN AG REEMENT. THE ASSESSEE HAS ENTERED INTO A MAIN AGREEMENT, IN THEIR OWN RIGHT, CAN CLAIM THE BENEFIT OF SECTION 80IA. AS T HE ASSESSEE BEING DIRECTLY UNDER CONTRACT TO THE CONCERN FOR TH E WORK DONE AND ARE ALSO DIRECTLY DEALING WITH THE GOVERNM ENT ON WHOSE BEHALF THE ASSESSEE ARE DOING THE WORK, THEY CAN BE CONSIDERED AS MAIN CONTRACTORS ALONG WITH PEC AND A RE NOT SIMPLY SUBCONTRACTORS VIS-A-VIS THE WORK UNDERTAKEN BY THEM. AS SUCH THE ASSESSEE IS OTHERWISE FULFILLING ALL TH E CONDITIONS ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 4 THEY ARE ENTITLED TO DEDUCTION UNDER THE PROVISIONS OF SECTION 80IA. IN ADDITION TO THIS, THE AR RELIED ON VARIO US ORDERS OF THIS TRIBUNAL WHICH WE HAVE DISCUSSED ELSEWHERE IN THIS ORDER. 7. THE DR RELIED ON THE JUDGEMENT OF GUJARAT HIGH COUR T IN THE CASE OF KATIRA CONSTRUCTIONS LTD. VS. UNION OF INDIA REPORTED IN 2013-TIOL-HC-AHM-IT. ESPECIALLY, HE DR EW OUR ATTENTION TO PARAGRAPHS 31, 32, 33, 34 AND 35 WHICH READ AS UNDER: 31. FROM THE INCEPTION, THUS THE CONCEPT OF DEVELOPMENT OF INFRASTRUCTURE THROUGH PRIVATE PARTICIPATION WAS CLEARLY DISCERNIBLE. PRINCIPAL PURPOSE WAS TO INFUSE PRIVATE INVESTMENT IN SUCH PROJECTS TO SPEED UP INFRASTRUCTURE DEVELOPMENT WHICH REQUIRED MASSIVE EXPANSION. EVEN AFTER BIFURCATION OF SECTION 80IA INTO SECTION 80IA AND SECTION 80IB, WITH EFFECT FROM 1.4.2000, THIS FUNDAMENTAL CONCEPT WAS NOT DISCARDED. SUB- SECTION (4) WHICH FORMED PART OF THE RECAST SECTION 80LA DID NOT CARRY ANY MATERIAL CHANGES FROM THE EARLIER PROVISIONS OF SUBSECTION (4A) OF SECTION 80 IA WHICH EXISTED PRIOR TO 1.4.2000. 32. IT IS TRUE THAT WITH EFFECT FROM 1.4.2002 SOME SIGNIFICANT CHANGES WERE MADE IN THE SAID PROVISIONS. WE HAVE ALREADY NOTICED THREE OF THESE CHANGES WHICH ARE MATERIAL FOR OUR PURPOSE. SUCH CHANGES WERE (I) THAT SUB-SECTION (4) OF SECTION 80 IA NOW REQUIRED THE ENTERPRISE TO CARRY ON THE BUSINESS OF DEVELOPING OR OPERATING AND MAIN- TAINING OR DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY. THIS WAS IN CONTRAST T O THE PREVIOUS REQUIREMENT OF ALL THREE CONDITIONS BEING CUMULATIVELY SATISFIED; (II) THAT THE EXPLANATION OF THE TERM 'INFRASTRUCTURE FACILITY' WAS CHANGED TO BESIDES OTHERS, A ROAD INCLUDING TOLL ROAD INSTEAD OF HITHERTO EXISTING EXPRESSION 'ROAD' AND (III) THAT THE REQUIREMENT OF TRANSFERRI NG THE INFRASTRUCTURAL FACILITIES DEVELOPED BY THE ENTERPRISE TO THE CENTRAL OR THE STATE GOVERNMENT OR THE LOCAL AUTHORITY WITHIN THE TIME STIPULATED I N THE AGREEMENT WAS DONE AWAY WITH. ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 5 33. TO OUR MIND, THESE CHANGES, HOWEVER, WOULD NOT ALTER THE SITUATION VIS-A-VIS THE IMPUGNED AMENDMENT. THESE LEGISLATIVE CHANGES DID ENLARGE THE SCOPE OF THE DEDUCTION AND IN A SENSE, MADE IT AVAILABLE TO CERTAIN ASSESSEES WHO WOULD NOT HAVE BEEN, BUT FOR THE CHANGES ELIGIBLE FOR SUCH DEDUCTION. NEVERTHELESS, THE BASIC REQUIREMENT OF THE ENTERPRISE CARRYING ON THE BUSINESS OF DEVELOPING OR OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAINING INFRA- STRUCTURE FACILITY WAS NOT DONE AWAY WITH. IN OTHER WORDS, IN OUR UNDERSTANDING, EVEN THE AMENDED SECTION 80IA(4) WITH EFFECT FROM 1.4.2002 COULD BE CONSTRUED AS NOT INCLUDING EXECUTION OF WORKS CONTRACT AS ONE OF THE ELIGIBLE ACTIVITIES FO R CLAIMING DEDUCTION. WE MAY, ONCE AGAIN FALL BACK ON THE EXPLANATORY MEMORANDUM EXPLAINING SUCH LEGISLATIVE AMENDMENTS. IT WAS EXPLAINED THAT INVESTMENT IN INFRASTRUCTURE HAS TO COMPETE WITH THE INVESTMENT IN OTHER SECTORS AND MUST THEREFORE BE ATTRACTIVE. THERE IS, THEREFORE, IN PARTICULAR A NEED TO ENCOURAGE INVESTMENT IN THE AREA OF SURFACE TRANSPORT, WATER SUPPLY, WATER TREATMENT SYSTEM, IRRIGATION PROJECT, SANITATION AND SEWERAGE SYSTEM OR SOLID WASTE MANAGEMENT SYSTEMS. THE BILL THEREFORE, PROPOSED TO RELAX THE EXISTING SYST EM TO PROVIDE FOR A TEN YEAR TAX HOLIDAY. SIGNIFICANTL Y, IT WAS STATED THAT KEEPING IN VIEW THE CAPITAL INTENSIVE NATURE, THE HIGHER ALLOWANCES OF DEPRECIATION IN THE INITIAL YEARS IN SUCH ENTERPRIS E AND THE NEED FOR IMPROVED CASH FLOWS, IT IS FURTHER PROPOSED THAT FOR AN INFRASTRUCTURE FACILITY IN THE NATURE OF A ROAD INCLUDING A TOLL ROAD, BRIDGE, RAI L SYSTEM, HIGHWAY PROJECT, WATER SUPPLY PROJECT, SANITATION, SEWERAGE AND SOLID WASTE MANAGEMENT SYSTEM IN PLACE OF TWO-TIER TAX HOLIDAY, A TEN YEAR TAX HOLIDAY MAY BE AVAILED CONSECUTIVELY OUT OF TWENTY YEARS BEGINNING FROM THE YEAR IN WHICH THE UNDERTAKING BEGINS OPERATING THE INFRASTRUCTURE FACILITY. IN THE CASE OF OTHER INFRASTRUCTURE, NAMELY, FOR AIRPORT, PORT, INLAND PORT AND INLAND WATERWAYS, IT IS ALSO PROPOSED TO RELAX THE EXISTIN G TWO TIER FISCAL INCENTIVE. THE BILL PROPOSED AN IDENTICAL TEN YEAR TAX HOLIDAY THAT MAY BE AVAILED IN A BLOCK OF FIFTEEN YEARS. IT IS ALSO PROPOSED TO DO AWAY WITH THE MANDATORY REQUIREMENT THAT SUCH INFRASTRUCTURE FACILITY SHALL BE TRANSFERRED TO THE ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 6 CENTRAL GOVERNMENT, STATE GOVERNMENT, LOCAL AUTHORITY OR ANY OTHER STATUTORY AUTHORITY. 34. CLEARLY, THUS, POST 1.4.2002 ALSO, THE INVOLVEMENT OF THE ENTERPRISE IN DEVELOPING INFRASTRUCTURE FACILITY WHEN THE CLAIM WAS COVERED UNDER SUCH EXPRESSION WAS ESSENTIAL. IN THE SAME CONTEXT, WE MUST UNDERSTAND THE EXPRESSION 'DEVELOPING OR OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAINING'. KEEPING IN MIND THE NEW AREAS WHERE SUCH PRIVATE PARTICIPATION WOULD BE REQUIRED AND THEREFORE HAD TO BE ENCOURAGED AND KEEPING IN MIND THAT SUCH AREAS, SUCH AS, SURFACE TRANSPORT, WATER SUPPLY, WATER TREATMENT SYSTEM, IRRIGATION PROJECT, ETC. WOULD NECESSARILY BE HIGHLY INVESTMENT INTENSIVE, THE LEGISLATURE PROVIDED FOR A TAX BREAK OF 10 CONSECUTIVE YEARS OUT OF A TOTAL OF 20 YEARS PERIOD AND ALSO PROPOSED TO DO AWAY WITH THE REQUIREMENT OF SUCH INFRASTRUCTURE FACILITY BEING TRANSFERRED TO THE CENTRAL OR THE STATE GOVERNMENT OR THE LOCAL AUTHORITY. 35. IN 2007, THE EXPLANATION BELOW SUB-SECTION (13) OF SECTION 80IA CAME TO BE ADDED WHICH CLARIFIED THAT NOTHING CONTAINED IN THE SAID SECTION SHALL APPLY TOA PERSON WHO EXECUTES. A WORKS CONTRACT ENTERED INTO WITH THE UNDERTAKING OR ENTERPRISE, AS THE CASE MAY BE. IN CLEAR TERMS, THIS EXPLANATION TARGETED THE SECOND LEVEL WORKS CONTRACTOR WHO MIGHT HAVE BEEN EMPLOYED BY THE ENTERPRISE DEVELOPING THE INFRA-STRUCTURE FACILITY. HOWEVER, THIS WAS NOT FOUND TO BE SUFFICIENT EXPLANATION CLEARING DOUBTS WITH RESPECT TO THE EXCLUSION OF TH E ENTERPRISE ENGAGED IN EXECUTION OF A WORKS CONTRACT. IT WAS, THEREFORE, THAT THE IMPUGNED EXPLANATION CAME TO BE INTRODUCED SUBSTITUTING THE EXISTING EXPLANATION BELOW SUB- SECTION (13) TO SECTION 80IA. THE EXPLANATORY MEMORANDUM RECORDED THAT PROFIT LINKED DEDUCTIONS WERE PRONE TO CONSIDERABLE MISUSE. WITH A VIEW TO PREVENTING SUCH MISUSE OF THE TAX HOLIDAY UNDER SECTION 80IA, IT WAS PROPOSED TO AMEND THE EXPLANATION TO THE SAID SECTION TO CLARIFY THAT NOTHING CONTAINED IN THE SECTION SHALL APPLY IN RELATION TO A BUSINESS WHICH IS IN THE NATURE OF A WORKS CONTRACT EXECUTED BY AN UNDERTAKING. ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 7 8. AFTER HEARING BOTH THE PARTIES WE ARE OF THE OPINIO N THAT THE ALLOWABILITY OF DEDUCTION U/S. 80IA IS SUBJECT M ATTER OF APPEAL BEFORE THIS TRIBUNAL IN VARIOUS CASES AND TH E TRIBUNAL GIVEN A FINDING IN THESE CASES. THE SAME ISSUE CA ME FOR CONSIDERATION BEFORE THIS TRIBUNAL IN THE CASE OF M AYTAS-NCC (JV) IN ITA NO. 1292/HYD/2010 FOR A.Y. 2007-08. THE T RIBUNAL VIDE ORDER DATED 27.8.2012 HELD AS FOLLOWS: '22. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, THIS ISSUE CAM E FOR CONSIDERATION BEFORE THIS TRIBUNAL IN THE CASE OF M /S. KOYA & CO. CONSTRUCTION (P) LTD. V. ACIT, 51 SOT 20 3 (HYD) (URO) WHEREIN THE TRIBUNAL HELD AS FOLLOWS: 24. WE FIND THAT THE PROVISIONS OF SECTION 80IA (4) OF THE ACT WHEN INTRODUCED AFRESH BY THE FINANCE AC T, 1999, THE PROVISIONS UNDER SECTION 80IA (4A) OF THE ACT WERE DELETED FROM THE ACT. THE DEDUCTION AVAILABLE FOR ANY ENTERPRISE EARLIER UNDER SECTION 80IA (4A) ARE ALSO MADE AVAILABLE UNDER SECTION 80IA ( 4) ITSELF. FURTHER, THE VERY FACT THAT THE LEGISLATUR E MENTIONED THE WORDS (I) DEVELOPING OR (II) OPERA TING AND MAINTAINING OR (III) DEVELOPING, OPERATING AN D MAINTAINING CLEARLY INDICATES THAT ANY ENTERPRISE WHICH CARRIED ON ANY OF THESE THREE ACTIVITIES WOUL D BECOME ELIGIBLE FOR DEDUCTION. THEREFORE, THERE IS NO AMBIGUITY IN THE INCOME-TAX ACT. WE FIND THAT WHERE AN ASSESSEE INCURRED 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 OF THE ACT. IN CONTRAST TO THIS, A ASSESSEE, WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON INCLUDING GOVERNMENT O R AN UNDERTAKING OR ENTERPRISE REFERRED TO IN SECTION 80 IA OF THE ACT, FOR EXECUTING WORKS CONTRACT, WILL N OT BE ELIGIBLE FOR THE TAX BENEFIT UNDER SECTION 80 IA OF THE ACT. WE FIND THAT THE WORD OWNED IN SUB-CLAUSE ( A) OF CLAUSE (1) OF SUB SECTION (4) OF SECTION 80IA OF THE ACT REFER TO THE ENTERPRISE. BY READING OF THE SECT ION, IT IS CLEARS THAT THE ENTERPRISES CARRYING ON DEVELOPM ENT OF INFRASTRUCTURE DEVELOPMENT SHOULD BE OWNED BY TH E COMPANY AND NOT THAT THE INFRASTRUCTURE FACILITY SHOULD BE OWNED BY A COMPANY. THE PROVISIONS ARE MADE APPLICABLE TO THE PERSON TO WHOM SUCH ENTERPRISE BELONGS TO IS EXPLAINED IN SUB-CLAUSE (A ). THEREFORE, THE WORD OWNERSHIP IS ATTRIBUTABLE ONL Y TO THE ENTERPRISE CARRYING ON THE BUSINESS WHICH ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 8 WOULD MEAN THAT ONLY COMPANIES ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (4) AND NOT ANY OTHER PERSON LIKE INDIVIDUAL, HUF, FIRM ETC. 25. WE ALSO FIND THAT ACCORDING TO SUB-CLAUSE (A), CLAUSE (I) OF SUB SECTION (4) OF SECTION 80-IA THE WORD IT DENOTES THE ENTERPRISE CARRYING ON THE BUSINES S. THE WORD IT CANNOT BE RELATED TO THE INFRASTRUCTU RE FACILITY, PARTICULARLY IN VIEW OF THE FACT THAT INFRASTRUCTURE FACILITY INCLUDES RAIL SYSTEM, HIGHW AY PROJECT, WATER TREATMENT SYSTEM, IRRIGATION PROJEC T, A PORT, AN AIRPORT OR AN INLAND PORT WHICH CANNOT B E OWNED BY ANY ONE. EVEN OTHERWISE, THE WORD IT IS USED TO DENOTE AN ENTERPRISE. THEREFORE, THERE IS NO REQUIREMENT THAT THE ASSESSEE SHOULD HAVE BEEN THE OWNER OF THE INFRASTRUCTURE FACILITY. 26. THE NEXT QUESTION IS TO BE ANSWERED IS WHETHER THE ASSESSEE 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 TO WORK S CONTRACT AND HE IS NOT ELIGIBLE FOR DEDUCTION UNDE R SECTION 80IA (4) OF THE ACT. WHETHER THE ASSESSEE IS A DEVELOPER OR WORKS CONTRACTOR IS PURELY DEPENDS ON THE NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE. EACH OF THE WORK UNDERTAKEN HAS TO BE ANALYZED AND A CONCLUSION HAS TO BE DRAWN ABOUT THE NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE. THE AGREEMENT ENTERED INTO WITH THE GOVERNMENT OR THE GOVERNMENT BODY MAY BE A MERE WORKS CONTRACT OR FOR DEVELOPMENT OF INFRASTRUCTURE. IT IS TO BE SEEN FRO M THE AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH TH E GOVERNMENT. WE FIND THAT THE GOVERNMENT HANDED OVER THE POSSESSION OF THE PREMISES OF PROJECTS TO THE ASSESSEE FOR THE DEVELOPMENT OF INFRASTRUCTURE FACILITY. IT IS THE ASSESSEES RESPONSIBILITY TO DO ALL ACTS TILL THE POSSESSION OF PROPERTY IS HANDED OVER TO T HE GOVERNMENT. THE FIRST PHASE IS TO TAKE OVER THE EXISTING PREMISES OF THE PROJECTS AND THEREAFTER DEVELOPING THE SAME INTO INFRASTRUCTURE FACILITY. SECONDLY, THE ASSESSEE SHALL FACILITATE THE PEOPLE TO USE THE AVAILABLE EXISTING FACILITY EVEN 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 ASSESSEE HAS T O DEVELOP THE INFRASTRUCTURE FACILITY. IN THE PROCE SS, ALL THE WORKS ARE TO BE EXECUTED BY THE ASSESSEE. IT M AY BE LAYING OF A DRAINAGE SYSTEM; MAY BE CONSTRUCTION OF A PROJECT; PROVISION OF WAY FOR THE CATTLE AND BULL OCK CARTS IN THE VILLAGE; PROVISION FOR TRAFFIC WITHOU T ANY HINDRANCE, THE ASSESSEES DUTY IS TO DEVELOP INFRASTRUCTURE WHETHER IT INVOLVES CONSTRUCTION OF A ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 9 PARTICULAR ITEM AS AGREED TO IN THE AGREEMENT OR NO T. THE AGREEMENT 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 BE DONE BY THE ASSESSEE. THE MATERIAL REQUIRED IS TO BE BROUGHT I N BY THE ASSESSEE BY STICKING TO THE QUALITY AND QUANTIT Y IRRESPECTIVE OF THE COST OF SUCH MATERIAL. THE GOVERNMENT DOES NOT PROVIDE ANY MATERIAL TO THE ASSESSEE. IT PROVIDES THE WORKS IN PACKAGES AND N OT AS A WORKS CONTRACT. THE ASSESSEE UTILIZES ITS FUN DS, ITS EXPERTISE, ITS EMPLOYEES AND TAKES THE RESPONSIBILITY OF DEVELOPING THE INFRASTRUCTURE FAC ILITY. THE LOSSES SUFFERED EITHER BY THE GOVT. OR THE PEOP LE IN THE PROCESS OF SUCH DEVELOPMENT WOULD BE THAT OF THE ASSESSEE. THE ASSESSEE HANDS OVER THE DEVELOPE D INFRASTRUCTURE FACILITY TO THE GOVERNMENT ON COMPLETION OF THE DEVELOPMENT. THEREAFTER, THE ASSESSEE HAS TO UNDERTAKE MAINTENANCE OF THE SAID INFRASTRUCTURE FOR A PERIOD OF 12 TO 24 MONTHS. DU RING THIS PERIOD, IF ANY DAMAGES ARE OCCURRED IT SHALL B E THE RESPONSIBILITY OF THE ASSESSEE. FURTHER, DURING TH IS PERIOD, THE ENTIRE INFRASTRUCTURE SHALL HAVE TO BE MAINTAINED BY THE ASSESSEE ALONE WITHOUT HINDRANCE TO THE REGULAR TRAFFIC. THEREFORE, IT IS CLEAR THAT F ROM AN UN-DEVELOPED 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) OF THE ACT. THIS CANNOT BE CONSIDERED AS A MERE WOR KS CONTRACT BUT HAS TO BE CONSIDERED AS A DEVELOPMENT OF INFRASTRUCTURE FACILITY. THEREFORE, THE ASSESSEE I S A DEVELOPER AND NOT A WORKS CONTRACTOR AS PRESUMED BY THE REVENUE. THE CIRCULAR ISSUED BY THE BOARD, RELI ED ON BY LEARNED COUNSEL FOR THE ASSESSEE, CLEARLY INDICATE THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTIO N UNDER SECTION 80IA (4) OF THE ACT. THE DEPARTMENT IS NOT CORRECT IN HOLDING THAT THE ASSESSEE IS A MERE CONTRACTOR OF THE WORK AND NOT A DEVELOPER. 27. WE ALSO FIND THAT AS PER THE PROVISIONS OF THE SECTION 80IA OF THE ACT, A PERSON BEING A COMPANY H AS TO ENTER INTO AN AGREEMENT WITH THE GOVERNMENT OR GOVERNMENT UNDERTAKINGS. SUCH AN AGREEMENT IS A CONTRACT AND FOR 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 DENOTE A PERSON ENTERING INTO AN AGREEMENT FOR UNDERTAKING THE DEVELOPMENT OF INFRASTRUCTURE FACILITY. EVERY AGREEMENT ENTERED INTO IS A CONTRA CT. THE WORD CONTRACTOR IS USED TO DENOTE THE PERSON WHO ENTERS INTO SUCH CONTRACT. EVEN A PERSON WHO ENTERS INTO A CONTRACT FOR DEVELOPMENT OF INFRASTRUCTURE FACILITY IS A CONTRACTOR. THEREFORE , THE ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 10 CONTRACTOR AND THE DEVELOPER CANNOT BE VIEWED DIFFERENTLY. EVERY CONTRACTOR MAY NOT BE A DEVELOP ER BUT EVERY DEVELOPER DEVELOPING INFRASTRUCTURE FACIL ITY ON BEHALF OF THE GOVERNMENT IS A CONTRACTOR. 28. WE FIND THAT THE DECISION RELIED ON BY THE LEAR NED COUNSEL FOR THE ASSESSEE IN THE CASE OF CIT VS. LAX MI CIVIL ENGINEERING WORKS [SUPRA] SQUARELY APPLICABLE TO THE ISSUE UNDER DISPUTE WHICH IS IN FAVOUR OF THE ASSESSEE WHEREIN IT WAS HELD THAT MERE DEVELOPMENT OF A INFRASTRUCTURE FACILITY IS AN ELIGIBLE ACTIVIT Y FOR CLAIMING DEDUCTION UNDER SECTION 80IA OF THE ACT AF TER CONSIDERING THE JUDGEMENT OF THE MUMBAI HIGH COURT IN THE CASE OF ABG HEAVY ENGINEERING [SUPRA]. THE C ASE OF ABG IS NOT THE PURE DEVELOPER WHEREAS, IN THE PRESENT CASE, THE ASSESSEE IS THE PURE DEVELOPER. WE ALSO FIND THAT SECTION 80IA OF THE ACT, INTENDED TO COVER THE ENTITIES CARRYING OUT DEVELOPING, OPERATI NG AND MAINTAINING THE INFRASTRUCTURE FACILITY KEEPING IN MIND THE PRESENT BUSINESS MODELS AND INTEND TO GRAN T THE INCENTIVES TO SUCH ENTITIES. THE CBDT, ON SEVE RAL OCCASIONS, CLARIFIED THAT PURE DEVELOPER SHOULD ALS O BE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IA OF T HE ACT, WHICH ULTIMATELY CULMINATED INTO AMENDMENT UNDER SECTION 80IA OF THE ACT, IN THE FINANCE ACT 2 001, TO GIVE EFFECT TO THE AFORESAID CIRCULARS ISSUED BY THE CBDT. WE ALSO FIND THAT, TO AVOID MISUSE OF THE AFORESAID AMENDMENT, AN EXPLANATION WAS INSERTED IN SECTION 80IA OF THE ACT, IN THE FINANCE ACT-2007 AN D 2009, TO CLARIFY THAT MERE WORKS CONTRACT WOULD NOT BE ELIGIBLE FOR DEDUCTIONS UNDER SECTION 80IA OF THE A CT. BUT, CERTAINLY, THE EXPLANATION CANNOT BE READ TO D O AWAY WITH THE ELIGIBILITY OF THE DEVELOPER; OTHERWI SE, THE PARLIAMENT WOULD HAVE SIMPLY REVERSED THE AMENDMENT MADE IN THE FINANCE ACT, 2001. THUS, THE AFORESAID EXPLANATION WAS INSERTED, CERTAINLY, TO D ENY THE TAX HOLIDAY TO THE ENTITIES WHO DOES ONLY MERE WORKS CONTACT 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 B EEN TO ENCOURAGE INVESTMENT IN DEVELOPMENT OF INFRASTRUCTURE SECTOR AND NOT FOR THE PERSONS WHO MERELY EXECUTE THE CIVIL CONSTRUCTION WORK. IT CATEGORICALLY STATES THAT THE DEDUCTION UNDER SECTI ON 80IA OF THE ACT IS AVAILABLE TO DEVELOPERS WHO UNDERTAKES ENTREPRENEURIAL AND INVESTMENT RISK AND NOT FOR THE CONTRACTORS, WHO UNDERTAKES ONLY BUSINE SS RISK. WITHOUT ANY DOUBT, THE LEARNED COUNSEL FOR TH E ASSESSEE CLEARLY DEMONSTRATED BEFORE US THAT THE ASSESSEE AT PRESENT HAS UNDERTAKEN HUGE RISKS IN TERMS OF DEPLOYMENT OF TECHNICAL PERSONNEL, PLANT A ND ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 11 MACHINERY, TECHNICAL KNOW-HOW, EXPERTISE AND FINANCIAL RESOURCES. 29. AS PER SUBMISSION OF THE ASSESSEES COUNSEL BROADLY THE TECHNICAL NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE IS AS FOLLOWS: I) DESIGNING AND MANUFACTURING OF PIPES: THE ASSESSEE SPECIALLY DESIGNED AND MANUFACTURED PRE-STRESSED CONCRETE PIPES AND IT HAS BEEN DONE IN ACCORDANCE WITH SPECIFIC REQUIREMENTS. II) DESIGN AND MANUFACTURING OF PIPE FITTINGS OR SPECIALS II) TRANSPORTING, LAYING AND JOINING OF PIPES CONFORMING WITH SPECIFICATIONS. THE ACTIVITY INVOLVES EARTH WORK EXCAVATION, TRENCH EXCAVATION, HARD ROOK BLASTING, LOWERING AND LAYING OF PIPES, FITTING OF SPECIALS, FITTING OF RUBBER RINGS AT THE JOINTS, TESTING PIPE JOINTS AND PIPELINE. III) CONSTRUCTION OF PUMP HOUSE, PROVIDING AND FITTING OF PUMP SETS. SUPPLY AND FITTING OF SUBMERSIBLE PUMPS, CENTRIFUGAL PUMPS, TURBINE PUMPS, SUBMERSIBLE MOTORS, MOTORS FOR TURBINES AND CENTRIFUGAL PUMP SETS, TRANSFORMER, GENERATOR, PANEL BOARDS ETC. IV) DESIGN AND CONSTRUCTION OF RAW WATER PUMPING STATIONS, WATER TREATMENT PLANT, TREATED WATER PUMPING STATION, TREATED WATER TRANSMISSION MAIN, CONSTRUCTION OF SURGE TANK AND PIPE CONNECTION ARRANGEMENT, BOOSTER STATIONS, INTERNAL TRANSMISSION MAIN AND FEEDER MAINS, CONSTRUCTION OF SERVICE RESERVOIRS AND MASTER RESERVOIRS. V) MOBILISATION OF LABOURERS, [PREPARATION OF PLAN S TECHNICAL EXPERTISE, SUPERVISION, CO-ORDINATION AND CONTROL, SET UP MANUFACTURING FACILITY NEARBY THE PROJECT SITE TO MANUFACTURE PROJECT SPECIFIC PIPES AS PER THE REQUIRED SPECIFICATIONS WHICH REQUIRES WELL EQUIPPED MACHINES, EMPLOYMENT OF SKILLED LABOUR AND TECHNICAL EXPERTS, EQUIPMENT TO TRANSPORT HEAVY PIPES TO LAYING SITES, EQUIPMENT TO LIFT AND LOWERING OF PIPES AT THE EXCAVATED SITES, PROVIDE QUALIFIED AND EXPERIENCE ENGINEER FOR EACH PROJECT SITE ETC TO BRING IN TO EXISTENCE AN INFRASTRUCTURE FACILITY. MANUFACTURING OF PIPES TO SITES, EXCAVATION UNDER VARIOUS CONDITIONS OF SOIL AND ROCK, LOWERING AND LAYING OF PIPES, JOINTING AND TESTING OF PIPE JOINT AND PIPE LINE AS A WHOLE, ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 12 CONSTRUCTION OF PUMP HOUSES, STORAGE TANK/COLLECTION WELL, TREATMENT PLANTS, DISTRIBUTION PLANTS ETC AND ALL THESE TOGETHER DEVELOP IN TO A NEW INFRASTRUCTURE WATER SUPPLY FACILITY. 30. FURTHER, THE ORDER OF TRIBUNAL IN THE CASE OF B.T. PATIL CITED SUPRA IS PRIOR TO AMENDMENT TO SEC 80IA (4), AFTER THE AMENDMENT THE SECTION 80IA(4) READ AS (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (II I) DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY, PRIOR TO AMENDMENT THE OR BETWEEN THREE ACTIVITIES WAS NOT THERE, AFTER THE AMENDMENT OR HAS BEEN INSERTED W.E.F. 1-4-2002 B Y FINANCE ACT 2001. 31. ACCORDINGLY, THE ASSESSEE IS ENTITLED FOR DEDUC TION UNDER SECTION 80IA OF THE ACT ON THE PROJECTS WHICH INVOLVE ABOVE ACTIVITIES. THEREFORE, IN OUR CONSID ERED VIEW, THE ASSESSEE SHOULD NOT BE DENIED THE DEDUCTI ON UNDER SECTION 80IA OF THE ACT IF THE CONTRACTS INVO LVES DEVELOPMENT, OPERATING, MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PERIOD, THEN SUCH CONTRACTS CANNOT BE CALLED AS SIM PLE WORKS CONTRACT TO DENY THE DEDUCTION U/S 80IA OF AC T. IN OUR OPINION THE CONTRACTS WHICH CONTAIN ABOVE FEATURES TO BE SEGREGATED ON THIS DEDUCTION U/S. 80 -IA HAS TO BE GRANTED AND THE OTHER AGREEMENTS WHICH AR E PURE WORKS CONTRACTS HIT BY THE EXPLANATION SECTION 80IA(13), THOSE WORK ARE NOT ENTITLE FOR DEDUCTION U/S 80IA OF THE ACT. THE PROFIT FROM THE CONTRACTS WHIC H INVOLVES DEVELOPMENT, OPERATING, MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PERIOD IS TO BE COMPUTED BY ASSESSING OFF ICER ON PRO-RATA BASIS OF TURNOVER. THE ASSESSING OFFICE R IS DIRECTED TO EXAMINE THE RECORDS ACCORDINGLY AND GRA NT DEDUCTION ON ELIGIBLE TURNOVER AS DIRECTED ABOVE. IT IS NEEDLESS TO SAY THAT SIMILAR VIEW HAS BEEN TAKEN BY THE CHENNAI BENCH OF THE TRIBUNAL AND DEDUCTION U/S . 80IA WAS GRANTED IN THE CASE OF M/S. CHETTINAD LIGN ITE TRANSPORT SERVICES (P) LTD., IN ITA NO. 2287/MDS/06 ORDER DATED 27 TH JULY, 2007 FOR THE ASSESSMENT YEAR 2004-05. LATER IN ITA NO. 1179/MDS/08 VIDE ORDER DATED 26 TH FEBRUARY, 2010 THE TRIBUNAL HAS TAKEN THE SAME VIEW. 23. IN THE CASE OF GVPR ENGINEERS LTD. V. ACIT, 51 SOT 207 (HYD) (URO) WHEREIN THE TRIBUNAL HELD THAT DEDUCTION U/S. 80IA IS AVAILABLE TO DEVELOPERS WHO UNDERTAKE ENTREPRENEURIAL INVESTMENT RISK AND NOT F OR THE CONTRACTORS, WHO UNDERTAKE ONLY BUSINESS RISK. WITHOUT ANY DOUBT, THE ASSESSEE CLEARLY DEMONSTRATE D THAT THE PLANT AND MACHINERY, TECHNICAL KNOW-HOW, ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 13 EXPERTISE AND FINANCIAL RESOURCES. THEREFORE, IF T HE CONTRACTS INVOLVE DESIGN, DEVELOPMENT, OPERATION & MAINTENANCE, FINANCIAL INVOLVEMENT AND DEFECT CORRECTION AND LIABILITY PERIOD, THEN SUCH CONTRACT S CANNOT BE CALLED AS SIMPLE WORKS CONTRACT, TO DENY THE DEDUCTION UNDER SECTION 80IA. THE CONTRACTS WHICH CONTAIN ABOVE FEATURES TO BE SEGREGATED HAVE TO BE GRANTED DEDUCTION UNDER SECTION 80IA AND THE OTHER AGREEMENTS WHICH ARE PURE WORKS CONTRACTS HIT BY TH E EXPLANATION TO SECTION 80IA(13) ARE NOT ENTITLED FO R DEDUCTION UNDER SECTION 80IA. THE PROFIT FROM THE CONTRACTS WHICH INVOLVE DESIGN, DEVELOPMENT, OPERAT ING & MAINTENANCE, FINANCIAL INVOLVEMENT AND DEFECT CORRECTION AND LIABILITY PERIOD IS TO BE COMPUTED B Y THE ASSESSING OFFICER ON PRO RATA BASIS OF TURNOVER. T HE ASSESSING OFFICER IS DIRECTED TO EXAMINE THE RECORD S, ACCORDINGLY, AND GRANT DEDUCTION ON ELIGIBLE TURNOV ER. 9. IN THE CASE OF KMC CONSTRUCTION LTD. V. ACIT, 51 S OT 214 (HYD) (URO) WHEREIN THE TRIBUNAL HAS TAKEN THE SAME VIEW. 10. IN THE CASE OF SUSHEE HI-TECH CONSTRUCTIONS PVT. LT D. VS. DCIT, IN ITA NOS. 269 & 1165/HYD/2009 AND ITA NO. 1171/HYD/2010 DATED 16 TH MARCH, 2012 WHEREIN THE TRIBUNAL HELD AS FOLLOWS: THE ASSESSEE SHOULD NOT BE DENIED THE DEDUCTION UNDER SECTION 80IA OF THE ACT AS THE CONTRACTS INVOLVES, DEVELOPMENT, OPERATING, MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PERIOD, THEN SUCH CONTRACTS CANNOT BE CAL LED AS SIMPLE WORKS CONTRACT. IN OUR OPINION THE CONTR ACTS WHICH CONTAIN ABOVE FEATURES TO BE SEGREGATED AND ON THIS DEDUCTION U/S. 80-IA HAS TO BE GRANTED AND THE OTHER AGREEMENTS WHICH ARE PURE WORKS CONTRACTS HIT BY THE EXPLANATION SECTION 80IA(13), THOSE WORK ARE NOT ENTITLE FOR DEDUCTION U/S 80IA OF THE ACT. THE PROFIT FROM SUCH CONTRACTS WHICH INVOLVES DEVELOPMENT, OPERATING, MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PE RIOD IS TO BE COMPUTED BY ASSESSING OFFICER ON PRO-RATA BASIS OF TURNOVER. THE ASSESSING OFFICER IS DIRECTE D TO EXAMINE AND GRANT DEDUCTION ON ELIGIBLE TURNOVER AS DIRECTED ABOVE. 26. IN VIEW OF THE ABOVE ORDERS OF THE TRIBUNAL ON SIMILAR ISSUE RELATING TO DEDUCTION U/S. SECTION 80 -IA(4), ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 14 WE ARE INCLINED TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE IN THE LIGHT OF THE ABOVE ORDER.' 11. FURTHER THE SAME ISSUE CAME FOR CONSIDERATION IN TH E CASE OF BHOORATNAM CONSTRUCTION CO. PVT. LTD. IN IT A NOS. 270 & 271/HYD/ 2011. THE TRIBUNAL VIDE ORDER DATED 7.9. 2012 HELD AS FOLLOWS: '8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, AS SEEN FROM THE FACTS OF THE CASE, THE ASSESSEE HAS NOT PRODUCED COPIES OF TENDER/CONT RACT EXECUTED BY IT BEFORE THE LOWER AUTHORITIES. BEFOR E US THE ASSESSEE FILED CERTAIN COPIES OF TENDERS SUGGESTING NATURE OF ACTIVITY CARRIED ON BY THE ASSESSEE AND ARGUED THAT THE ISSUE IS ALREADY DECIDED BY THIS TRIBUNAL IN FAVOUR OF TH E ASSESSEE BY VARIOUS DECISIONS CITED SUPRA. HOWEVER, AT THIS STAGE WE ARE NOT IN A POSITION TO EXPRESS ANY OPINION ON THE NATURE OF ACTIVITIES CARRIED ON BY THE ASSESSEE. THE LOWER A UTHORITIES HAD NO OCCASION TO EXAMINE THE NATURE OF ACTIVITIES CARRIED ON BY THE ASSESSEE. BEING SO, IN OUR OPINION, IT I S APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF ASSESSING OF FICER FOR FRESH CONSIDERATION. WHILE DOING SO, THE ASSESSING OFFICER HAS TO SEE WHETHER THE ASSESSEE CARRIED ON CONTRACT FOR SALE OR CONTRACT FOR WORK AND THE APPLICABILITY OF EXPLA NATION BELOW SECTION 80IA(13) OF THE ACT. THE ASSESSING O FFICER IS DIRECTED TO EXAMINE THE TERMS OF CONTRACT INCLUDING THE NATURE OF OBLIGATION TO BE DISCHARGED BY THE ASSESS EE WHILE EXECUTING THE CONTRACT. FOR CLAIMING DEDUCTION U/S . 80IA(4) THE ASSESSEE SHALL SATISFY THE TWO CONDITIONS VIZ., INVESTMENT IN ELIGIBLE PROJECTS AND (2) EXECUTION OF PROJECT B Y ITSELF. IF THE ASSESSEE SATISFIES THE ABOVE CONDITIONS AND THE ABOVE EXPLANATION IF NOT APPLICABLE THEN ONLY THE ASSESSE E IS ENTITLED FOR DEDUCTION U/S. 80IA(4) OF THE ACT. WI TH THIS OBSERVATION, WE REMIT THE ENTIRE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION AND TO DE CIDE IN ACCORDANCE WITH LAW.' 12. IN VIEW OF THE ABOVE ORDER OF THE TRIBUNAL, WE ARE INCLINED TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE ISSUE AFRES H AND TO SEE WHETHER THE ASSESSEE CARRIED ON THE DEVELOPMENT OF INFRASTRUCTURE FACILITIES CUMULATIVELY WITH THE ACT IVITIES OF DESIGN, DEVELOPMENT, OPERATION, MAINTENANCE, FINANC IAL INVOLVEMENT, DEFECT CORRECTION OF THE CONTRACT EXEC UTED BY THE ASSESSEE ITSELF. IN THE EVENT, THE ASSESSEE IT SELF CARRIED ON THE DEVELOPMENT OF INFRASTRUCTURE FACILITIES/CONTRA CT ALONG WITH DESIGN, DEVELOPMENT, OPERATION, MAINTENANCE, F INANCIAL ITA. NO. 1333/HYD/2011 & ORS. M/S. UNITECH-NCC (JV) ======================== 15 INVOLVEMENT, DEFECT CORRECTION OF THE CONTRACT DURI NG THE WARRANTY PERIOD, THEN SUCH CONTRACT TO BE CONSIDERE D AS A DEVELOPMENT OF INFRASTRUCTURE FACILITY EXECUTED BY THE ASSESSEE AND THEREBY ELIGIBLE FOR DEDUCTION U/S. 80I A OF THE ACT. 13. IN THE RESULT, ALL THE ABOVE APPEALS ARE ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL, 2013. SD/- ( ASHA VIJAYARAGHAVAN ) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 29 TH APRIL, 2013 TPRAO COPY FORWARDED TO: 1. M/S. UNITECH-NCC (JV), CO/ SRI SAMUEL NAGADESI, 4 08, SRI RAMAKRISHNA TOWERS, BESIDES IMAGE HOSPITALS, AMEERPET, HYDERABAD-500 073. 2. THE DEPUTY CIT, CIRCLE-6(1), BUDHA BHAVAN, KINGS WAY, SECUNDERABAD. 3. THE CIT(A)-IV, HYDERABAD. 4. THE CIT-III, HYDERABAD. 5. THE DR A BENCH, ITAT, HYDERABAD