I.T.O Wd - 8(4),kolkata, Kolkata V. M/s SPML Infra Ltd, Kolkata

ITA 2286/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9295 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 29-11-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 23-08-2013
• Court: TRIBUNAL
• Department Lawyers: ARUP KR SINHA
• Keywords: Search and seizure; Earning of tax free income; Proportionate interest; Retrospective amendment
• Section: 143(3); 14A; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI PARTHA SARAT HI CHAUDHURY, JM] I.T.A NO.2286/KOL/2013 ASSESSMENT YEAR: 2005-06 & I.T.A NO.2287/KOL/2013 ASSESSMENT YEAR: 2007-08 & I.T.A NO.2288/KOL/2013 ASSESSMENT YEAR: 2008-09 & I.T.A NO.2289/KOL/2013 ASSESSMENT YEAR: 2010-11 INCOME-TAX OFFICER, WD-8(4), KOLKATA. VS. M/S. SP ML INFRA LTD. (PAN: AADCS2469K) ( APPELLANT ) ( RESPONDENT ) & I.T.A NO.2035/KOL/2013 ASSESSMENT YEAR: 2008-09 & I.T.A NO.2036/KOL/2013 ASSESSMENT YEAR: 2010-11 M/S. SPML INFRA LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-XXVIII, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 03.02.2017 DATE OF PRONOUNCEMENT: 08.03.2017 FOR THE ASSESSEE: SHRI RAVI TULSIYAN, FCA FOR THE REVENUE: SHRI ARUP KR. SINHA, CIT ORDER PER BENCH: THE APPEALS IN ITA NO. 2286 & 2287/K/2013 BY REVENU E ARE ARISING OUT OF SEPARATE ORDERS OF CIT(A), CENTRAL-1, KOLKATA VIDE APPEAL NO . 350&444/CC-XXVIII/CIT(A)C- 1/12-13 BOTH DATED 15.05.2013 AND 21.05.2013 RESPEC TIVELY. THE APPEALS IN ITA NOS. 2288 & 2289/K/2013 BY REVENUE AND CROSS APPEALS IN ITA NOS. 2035 & 2036/K/2013 BY ASSESSEE ARE ARISING OUT OF SEPARATE ORDERS OF CIT( A), CENTRAL-1, KOLKATA VIDE APPEAL NOS. 223/CC-XXVIII/CIT(A)C-1/10-11 AND 445/CC-XXVIII/CIT (A)C-1/12-13 BOTH DATED 2 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. 15.05.2013 AND 22.05.2013 RESPECTIVELY.. ALL THESE APPEALS ARE TAKEN UP TOGETHER AND DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAK E OF CONVENIENCE. 2. ORDER PASSED BY LD CITA IN THE ERSTWHILE NAME O F THE ASSESSEE THE REVENUE HAD RAISED THE FOLLOWING GROUND OF APPE AL BEFORE US FOR THE ASST YEARS 2005- 06, 2007-08, 2008-09, 2010-11 :- A) THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW A S THE SAME HAS BEEN PASSED IN THE NAME OF M/S SUBHASH PROJECTS & MARKETING LTD , WHIL E THE NAME OF THE ASSESSEE HAS CHANGED TO M/S SPML INFRA LTD W.E.F. 12.04.2010 . WITH REGARD TO THIS GROUND, WE FIND THAT THE LD CIT A HAD PASSED THE APPELLATE ORDERS IN THE IN THE NAME OF M/S SPML INFRA LTD BY DULY MENTIONIN G WITHIN BRACKETS ERSTWHILE M/S SUBHASH PROJECTS & MARKETING LTD. HENCE THE GROUN D NO. 1 RAISED BY THE REVENUE IS DISMISSED FOR THE ASST YEAR 2005-06, 2007-08 , 2008 -09 & 2010-11 IS DISMISSED. 3. DISALLOWANCE U/S 80IA OF THE ACT GROUNDS COVERED GROUND NOS. B) TO K) FOR ASST YEAR 2005-06 IN REVEN UES APPEAL GROUND NOS. B) TO K) FOR ASST YEAR 2007-08 IN REVEN UES APPEAL GROUND NO. D) TO N) FOR ASST YEAR 2008-09 IN REVENU ES APPEAL GROUND NOS. D) TO N) FOR ASST YEAR 2010-11 IN REVEN UES APPEAL 3.1. THE PRIMARY FACTS RELATING TO ASST YEAR 2005-0 6 ARE TAKEN INTO CONSIDERATION AND DECISION RENDERED THEREON WOULD APPLY WITH EQUAL FO RCE FOR OTHER ASSESSMENT YEARS ALSO IN VIEW OF IDENTICAL FACTS EXCEPT WITH VARIANCE IN FIG URES AND IN PROJECTS. THE BRIEF FACTS OF THIS ISSUE FOR THE ASST YEAR 2005-06 IS THAT THE AS SESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF INFRASTRUCTURE FACILITIES AND CLAIME D DEDUCTION U/S 80IA (4) OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 2 9.12.2006 ALLOWING DEDUCTION U/S 80IA(4) OF THE ACT TO THE TUNE OF RS. 4,78,75,657/- . PURSUANT TO THE AMENDMENT BROUGHT IN BY FINANCE ACT 2009 WITH RETROSPECTIVE EFFECT FROM 1.4.2000 IN THE EXPLANATION AFTER SUB- SECTION (13) TO SECTION 80IA OF THE ACT, THE LD AO SOUGHT TO WITHDRAW THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT BY STATING THAT THE S AID DEDUCTION IS NO LONGER AVAILABLE IN RELATION TO BUSINESS REFERRED TO IN SUB-SECTION (4) OF SECTION 80IA OF THE ACT WHICH IS IN THE 3 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. NATURE OF WORKS CONTRACT AWARDED BY ANY PERSON (INC LUDING THE CENTRAL OR STATE GOVERNMENT) AND EXECUTED BY THE UNDERTAKING OR ENTE RPRISE REFERRED TO IN SECTION 80IA(1) OF THE ACT. THE LD AO CONCLUDED THAT THE ASSESSEE IS NOTHING BUT A WORKS CONTRACTOR AND PROJECTS WERE AWARDED BY CENTRAL OR STATE GOVERNMEN T OR LOCAL BODY BY GIVING THE DETAILS OF PROJECTS AS UNDER:- NAME OF THE PROJECTS PROJECT AWARDED BY JODHPUR PROJECT IT IS A WATER SUPPLY PROJECT FROM RAJIV GANDHI LIFT CANAL PROJECT IN JODHPUR KATHORA PROJECT EXECUTIVE ENGINEER, NARMADA DEVELO PMENT DIVISION NO. 20, MANDLESHWAR (MP) O & M BANGALORE KARNATAKA URBAN WATER SUPPLY AND D RAINAGE BOARD, A LOCAL AUTHORITY ACCORDINGLY DEDUCTION U/S 80IA (4) OF THE ACT WAS D ENIED TO THE ASSESSEE. 3.2. THE ASSESSEE AGITATED THE DISALLOWANCE OF DED UCTION U/S 80IA (4) OF THE ACT BY REFERRING TO PROVISIONS OF SECTION 80IA(4) OF THE A CT BY STATING THAT : THIS SECTION APPLIES TO - (I) ANY ENTERPRISE CARRYING ON THE BUSINESS OF (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAIN TAINING ANY INFRASTRUCTURE FACILITY WHICH FULFILS ALL THE FOLLOWING CONDITIONS , NAMELY :- (A) IT IS OWNED BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF SUCH COMPANIES OR BY AN AUTHORITY OR A BOARD OR A CORPORATION OR ANY OTH ER BODY ESTABLISHED OR CONSTITUTED UNDER ANY CENTRAL OR STATE ACT; (B) IT HAS ENTERED INTO AN AGREEMENT WITH THE CENTR AL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR ( I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAIN TAINING A NEW INFRASTRUCTURE FACILITY ; (C ) IT HAS STARTED OR STARTS OPERATING AND MAINTAI NING THE INFRASTRUCTURE FACILITY ON OR AFTER THE 1 ST DAY OF APRIL 1995: PROVIDED THAT WHERE AN INFRASTRUCTURE FACILITY IS T RANSFERRED ON OR AFTER THE 1 ST DAY OF APRIL 1999 BY AN ENTERPRISES WHICH DEVELOPED SUCH INFRAST RUCTURE FACILITY (HEREAFTER REFERRED TO IN THIS SECTION AS THE TRANSFEROR ENTERPRISE) TO ANOTH ER ENTERPRISE (HEREAFTER IN THIS SECTION REFERRED TO AS THE TRANSFEREE ENTERPRISE) FOR THE P URPOSE OF OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON ITS BEHALF IN ACCORDANCE WITH THE AGREEMENT WITH THE CENTRAL GOVERNMENT, STATE GOVERNMENT, LOCAL AUTHORITY OR ST ATUTORY BODY, THE PROVISIONS OF THIS SECTION SHALL APPLY TO THE TRANSFEREE ENTERPRISE AS IF IT WERE THE ENTERPRISE TO WHICH THIS CLAUSE APPLIES AND THE DEDUCTION FROM PROFITS AND G AINS WOULD BE AVAILABLE TO SUCH 4 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. TRANSFEREE ENTERPRISE FOR THE UNEXPIRED PERIOD DURI NG WHICH THE TRANSFEROR ENTERPRISE WOULD HAVE BEEN ENTITLED TO THE DEDUCTION, IF THE TRANSFE R HAD NOT TAKEN PLACE . EXPLANATION FOR THE PURPOSES OF THIS CLAUSE, INF RASTRUCTURE FACILITY MEANS (A) A ROAD INCLUDING TOLL ROAD, A BRIDGE OR A RAIL SYST EM ; (B) A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER ACTIVI TES BEING AN INTEGRAL PART OF THE HIGHWAY PROJECT ; (C) A WATER SUPPLY PROJECT, WATER TREATMENT SYSTEM, IRR IGATION PROJECT, SANITATION AND SEWERAGE SYSTEM OR SOLID WASTE MANAGEMENT SYSTEM ; (D) A PORT, AIRPORT, INLAND WATERWAY , INLAND PORT OR N AVIGATIONAL CHANNEL IN THE SEA; (II) TO (VI) -------------------------------------- -------------- 3.2.1. THE ASSESSEE TRIED TO EXPLAIN THE LEGISLATIV E INTENT BEHIND THE EXTENSION OF TAX HOLIDAY TO THE INFRASTRUCTURE INDUSTRY U/S 80IA OF THE ACT. IN THE 1980S AND IN EARLY 1990S , INFRASTRUCTURE LIKE ROADS, BRIDGES, WATER WORKS ETC WERE BEING DONE BY THE GOVERNMENT DEPARTMENTS LIKE PWD, IRRIGATION DEPARTM ENT ETC DEPARTMENTALLY. THE EXPERIENCE HAD BEEN THAT THE INFRASTRUCTURE DEVELOP ED DEPARTMENTALLY HAD POOR QUALITY, USED TO TAKE MUCH MORE TIME THAN AS ORIGINALLY SCHE DULED , WHICH IN TURN WOULD RESULT IN COST ESCALATION I.E THE GOVERNMENT WOULD END UP SPE NDING MUCH MORE THAN ORIGINALLY PLANNED FOR THE POOR QUALITY INFRASTRUCTURE BEING D ONE DEPARTMENTALLY. IN THE EARLY 1990S , THE GOVERNMENT WANTED TO INVOLVE THE PRIVATE SECT OR FOR DEVELOPMENT OF INFRASTRUCTURE PROJECTS BUT VERY FEW ASSESSEE IN THE PRIVATE SECTO R WERE FORTHCOMING TO TAKE ON SUCH PROJECTS AS THERE WERE SERIOUS ISSUES OF DELAY IN L AND ACQUISITION, PUBLIC INTEREST LITIGATIONS AND PROBLEMS IN GETTING ENVIRONMENT CLEARANCES. TH EREFORE, IN ORDER TO ENCOURAGE PRIVATE SECTOR PARTICIPATION, TAX HOLIDAY U/S 80IA OF THE A CT WAS EXTENDED TO INFRASTRUCTURE INDUSTRY AND CONSEQUENTLY SUB-SECTION (4A) WAS INTR ODUCED AND INSERTED BY THE FINANCE ACT 1995 WITH EFFECT FROM 1.4.1996. SINCE THEN THE LEGISLATIVE SCHEME HAS BEEN LIBERALIZED PROGRESSIVELY IN THE INTEREST OF AIDING THE GROWTH OF INFRASTRUCTURE. 3.2.2. IT WAS FURTHER EXPLAINED THAT IN THE BACKGRO UND OF THE LEGISLATIVE INTENT BEHIND INSERTION OF SUB-SECTION (4) AS DISCUSSED ABOVE, IF THE EXPLANATION IS INTERPRETED IN A WAY THAT INCOME FROM INFRASTRUCTURE DEVELOPMENT WORK UN DERTAKEN UNDER ANY CONTRACT WITH ANY PERSON INCLUDING THE CENTRAL OR STATE GOVERNMENT IS NOT ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT, THEN THE BASIC INTENTION BEHIND EXTENSION OF SAID BENEFIT WILL GET DEFEATED AND SECTION 80IA(4) OF THE ACT WOULD BECOME REDUNDANT. THE SAME WILL NEGATE THE GRANT OF 5 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. BENEFIT TO INFRASTRUCTURE INDUSTRIES U/S 80IA(4) OF THE ACT PURSUANT TO WHICH AN EXISTENCE OF AGREEMENT WITH GOVERNMENT AUTHORITIES IS ESSENTIAL FOR AVAILING THE TAX HOLIDAY. ON ONE HAND, THE MAIN ENACTMENT MANDATES EXISTENCE OF AN A GREEMENT WITH GOVERNMENT AND ON OTHER HAND THE EXPLANATION (AS INTERPRETED BY THE L D AO) DENIES THE BENEFIT TO THE ASSESSEE IF HE UNDERTAKES INFRASTRUCTURE WORK UNDER A CONTRA CT / AGREEMENT. THUS THE INTERPRETATION OF THE EXPLANATION ADOPTED BY THE LD AO IS CLEARLY CONTRADICTORY TO AND HAS THE EFFECT OF NEGATING THE MAIN ENACTMENT. THE ASSESSEE ALSO PLAC ED RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF S SUNDARAM PILLAI VS V.R.PITTABIRAMAN REPORTED IN AIR 1985 SC 582 AND STATED THAT AN EXPLANATION CANNOT INTERFERE WI TH OR CHANGE THE MAIN ENACTMENT WHEN THE MAIN ENACTMENT IS CLEAR AND UNAM BIGUOUS. IN THE INSTANT CASE, THE MAIN ENACTMENT I.E SUB-SECTION (4) IS CLEARLY IN HA RMONY WITH THE INTENTION OF THE LEGISLATURE AND HENCE THE EXPLANATION CANNOT BE INT ERPRETED IN A WAY TO INTERFERE WITH FUNCTIONING OF THE MAIN ENACTMENT AND TAKE AWAY THE BENEFIT GRANTED TO THE ASSESSEE IN THE MAIN ENACTMENT. 3.2.3. THE ASSESSEE TRIED TO EXPLAIN THE MEANING OF THE TERM WORKS CONTRACT AS USED IN THE EXPLANATION INSERTED VIDE FINANCE ACT 2009 SECTION 80IA OF THE ACT NOWHERE DEFINES THE TERM WORKS CONTRACT, HENCE THE NATURAL MEANING OF THE WORD SHALL APPLY. AS PER THE OXFORD DICTIONARY , THE TERM WORK MEANS APPLICATION OF EFFORT TO A PURPOSE OR USE OF ENERGY. THUS GOING BY THE OXFORD DICTIONARY, A WO RKS CONTRACT IS A CONTRACT WHICH INVOLVES EFFORT OR IN OTHER WORDS LABOUR OF THE CON TRACTOR. FURTHER AS PER THE BLACK LAWS DICTIONARY , THE TERM WORK MEANS LABOUR OR IN OTHER WORDS PH YSICAL AND MENTAL EXERTION TO ATTAIN AN END ESP. AS CONTROLLED BY AND FOR THE BENEFIT OF THE EMPLOYER. THUS AS PER BLACK LAWS DICTIONARY ALSO, A WORKS CONTRACT IS A LABOUR CONTRACT UNDER WHICH THE CONTRACTOR MERELY EMPLOYS HIS LABOUR AS PER THE DIR ECTIONS OF THE CONTRACTEE. THE ASSESSEE ALSO PLACED RELIANCE ON THE DEFINITION OF WORK IN SECTION 194C OF THE ACT WHICH IS AS UNDER :- (IV) WORK SHALL INCLUDE: (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCTION O F PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; (C ) CARRIAGE OF GOODS OR PASSENGERS BY ANY MO DE OF TRANSPORT OTHER THAN BY RAILWAYS; 6 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (D) CATERING; (E) MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF THE CUSTOMER BY USING MATERIAL PURCHASED FROM SU CH CUSTOMER, BUT DOES NOT INCLUDE MANUFACTURING OR SUPPLYING A P RODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCH ASED FROM A PERSON, OTHER THAN SUCH CUSTOMER . THUS AS PER SECTION 194C OF THE ACT ALSO, WORKS CO NTRACT; DOES NOT INCLUDE A CONTRACT WHEREIN THE CONTRACTOR IN ADDITION TO EMPLOYING LAB OUR, PROCURES MATERIAL FROM A THIRD PARTY. THUS CONTRACTS INVOLVING MERE LABOUR OF THE CONTRACTOR ARE INCLUDED IN THE PURVIEW OF WORKS CONTRACT. THE ASSESSEE ALSO PLACED REL IANCE ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS GLENMARK PH ARMACEUTICALS LIMITED REPORTED IN 319 ITR 199 (BOM) IN THIS REGARD. BASED ON THE AFORESAID PLEADINGS, THE ASSESSEE ARGU ED THAT A WORKS CONTRACT CONSTITUTES A CONTRACT UNDER WHICH THE CONTRACTOR IS MERELY EMPLO YING HIS EFFORTS OR LABOUR. UNDER SUCH A CONTRACT, THE CONTRACTEE PROVIDES THE MATERIAL AN D OTHER REQUISITES ( A COMPLETE INFRASTRUCTURE) NEEDED TO CARRY OUT THE DESIRED WOR K TO THE CONTRACTOR WHO BY APPLYING HIS LABOUR TO THE SAID MATERIAL TURNS THE MATERIAL INTO A DESIRED PRODUCT. 3.2.4. THE ASSESSEE FURTHER PLEADED BY DRAWING THE ATTENTION TO THE MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINANCE BILL 2007 REPORTED IN (2007) 289 ITR (ST.) 292 AT PAGE 312, WHICH READS AS UNDER :- SECTION 80IA , INTER ALIA, PROVIDES FOR A TEN YEAR BENEFIT TO AN ENTERPRISE OR AN UNDERTAKING ENGAGED IN DEVELOPMENT OF INFRASTRUCTUR E FACILITIES, INDUSTRIAL PARKS AND SPECIAL ECONOMIC ZONES. THE TAX BENEFIT WAS INTRODUCED FOR THE REASON THAT INDUSTRIAL MODERNIZATION REQUIRES A PASSIVE EXPANSION OF , AND QUALITATIVE I MPROVEMENT IN, INFRASTRUCTURE (VIZ, EXPRESSWAYS, HIGHWAYS, AIRPORTS, PORTS AND RA PID URBAN RAIL TRANSPORT SYSTEMS) WHICH WAS LACKING IN OUR COUNTRY. THE PURPOSE OF T HE TAX BENEFIT HAS ALL ALONG BEEN FOR ENCOURAGING PRIVATE SECTOR PARTICIPATION BY WAY OF INVESTMENT IN DEVELOPEMTN OF THE INFRASTRUCTURE SECTOR AND NOT FOR THE PERSON S WHO MERELY EXECUTE THE CIVIL CONSTRUCTION WORK OR ANY OTHER WORKS CONTRACT . ACCORDINGLY, IT IS PROPOSED TO CLARIFY THAT THE PRO VISIONS OF SECTION 80IA SHALL NOT APPLY TO A PERSON WHO EXECUTES A WORKS CONTRACT ENT ERED INTO WITH THE UNDERTAKING 7 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. OR ENTERPRISE REFERRED TO IN THE SAID SECTION. THU S, IN A CASE WHERE A PERSON MAKES THE INVESTMENT AND HIMSELF EXECUTES THE DEVELOPMENT WORK, I.E. CARRIES OUT THE CIVIL CONSTRUCTION WORK, HE WILL BE ELIGIBLE FOR TA X BENEFIT UNDER SECTION 80IA. IN CONTRAST TO THIS, A PERSON WHO ENTERS INTO A CONTRA CT WITH ANOTHER PERSON (I.E. UNDERTAKING OR ENTERPRISE REFERRED TO IN SECTION 80 IA) FOR EXECUTING WORKS CONTRACT, WILL NOT BE ELIGIBLE FOR TAX BENEFIT UNDE R SECTION 80IA . THIS AMENDMENT WILL TAKE RETROSPECTIVE EFFECT FROM APRIL 1, 2000 AND WILL ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YEA R 2000-01 AND SUBSEQUENT YEARS . IT WAS PLEADED THAT THE EXPLANATORY MEMORANDUM CLEA RLY LAYS OUT THAT PURPOSE OF EXTENDING TAX BENEFIT U/S 80IA OF THE ACT WAS TO EN COURAGE INVESTMENTS FROM THE PRIVATE SECTOR AND HENCE WORKS CONTRACT, I.E CONTRACTS INVO LVING MERELY LABOUR (OR MERE EXECUTION OF CONSTRUCTION WITHOUT MAKING INVESTMENTS) ARE OUT SIDE THE PURVIEW OF THE PROVISIONS OF SECTION 80IA OF THE ACT. THUS IT WAS PLEADED THAT THE TERM WORKS CONTRACT USED IN EXPLANATION TO SECTION 80IA(13) OF THE ACT MEANS A CONTRACT OF DEVELOPING INFRASTRUCTURE BY MERELY EMPLOYING LABOUR AND MAKING NO INVESTMENTS. RELIANCE IN THIS REGARD WAS ALSO PLACED ON THE CO-O RDINATE BENCH OF HYDERABAD TRIBUNAL IN THE CASE OF M/S GVPR ENGINEERS LTD VS ACIT IN ITA N O. 347 /HYD/ 2008 DATED 29.2.2012 WHEREIN IT WAS HELD THAT THE DEDUCTION U/S 80IA OF THE ACT IS AVAILABLE TO DEVELOPERS WHO UNDERTAKES ENTREPRENEURIAL AND INVESTMENT RISK AND NOT FOR THE CONTRACTORS, WHO UNDERTAKES ONLY BUSINESS RISK . RELIANCE WAS ALSO PLACED ON THE CO-ORDINATE BEN CH OF CHENNAI TRIBUANL IN THE CASE OF R.R.CONSTRUCTIONS, CHENNAI VS DIT IN ITA NO. 2061 (MAD) OF 2010 DATED 3.10.2011 WHEREIN IT WAS HELD T HAT THE ASSESSEE MAKES INVESTMENT AND HIMSELF EXECUTES THE DEVELOPMENT WORK AND CARRI ES OUT CIVIL WORKS , HE IS ELIGIBLE FOR TAX BENEFIT U/S 80IA OF THE ACT . THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISIO N OF THE CO- ORDINATE BENCH OF MUMBAI TRIBUNAL IN THE CASE OF ACIT VS PRATIBHA IND USTRIES LTD IN ITA NOS. 2197 TO 2199/MUM/2008 ; ITA NOS. 2200 TO 2202/ MUM/2008 DATED 19.12.2012 , WHEREIN IT WAS HELD THAT: 8 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. SECTION 80IA(4) ALLOWS DEDUCTION TO ANY ENTERPRI SE CARRYING ON THE BUSINESS OF (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY. THE EXPL ANATION PROVIDES THAT IT SHALL NOT APPLY TO BUSINESS WHICH IS IN THE NATURE OF A WORK S CONTRACT. WHETHER AN ASSESSEE IS A DEVELOPER OR WORKS CONTRACTOR DEPENDS ON THE NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE. THE WORD CONTRACTOR I S USED TO DENOTE A PERSON ENTERING INTO AN AGREEMENT FOR UNDERTAKING THE DEVE LOPMENT OF INFRASTRUCTURE FACILITY. EVERY AGREEMENT ENTERED INTO IS A CONTRA CT. THEREFORE, THE CONTRACTOR AND THE DEVELOPER CANNOT BE VIEWED DIFFERENTLY. EVERY CONTRACTOR MAY NOT BE A DEVELOPER BUT EVERY DEVELOPER IS A CONTRACTOR. CON TRACTS INVOLVING DESIGN, DEVELOPMENT, OPERATING AND MAINTENANCE, FINANCIAL I NVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PERIOD CANNOT BE CALLED AS SIMPLE WORKS CONTRACT . A CASE WHERE IN AN UNDEVELOPED AREA, INFRASTRUCTURE IS DEV ELOPED AND HANDED OVER TO THE GOVERNMENT CANNOT BE CONSIDERED AS A MERE WORKS CON TRACT BUT HAS TO BE CONSIDERED AS A DEVELOPMENT OF INFRASTRUCTURE FACIL ITY. IF THE CONTRACT IS COMPOSITE, IT WILL HAVE TO BE SEGREGATED SO AS TO ALLOW DEDUCT ION ON THE PARTS THAT INVOLVE DESIGN, DEVELOPMENT, OPERATING AND MAINTENANCE , FI NANCIAL INVOLVEMENT ETC AND TO DENY ON THOSE WHICH ARE PURE WORKS CONTRACTS. ON F ACTS, THE ASSESSEE HAD MADE SUBSTANTIAL INVESTMENTS IN FIXED ASSETS AND WAS EXP OSED TO VARIOUS KINDS OF RISKS. IT WAS NOT A MERE CONTRACTOR. IT IS ENOUGH IF THE ASS ESSEE IS A DEVELOPER. IT NEED NOT ALSO MAINTAIN AND OPERATE THE INFRASTRUCTURE FACILI TY. 3.2.5. THE ASSESSEE ALSO PLACED RELIANCE ON THE DEC ISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS ABG HEAVY INDUSTRIES LT D REPORTED IN 322 ITR 323 (BOM) WHEREIN IT WAS OBSERVED THAT : PARLIAMENT AMENDED THE PROVISIONS OF SECTION 80IA OF THE ACT SO AS TO CLARIFY THAT IN ORDER TO AVAIL OF A DEDUCTION , THE ASSESSEE COU LD (I) DEVELOP; OR (II) OPERATE AND MAINTAIN ; OR (III) DEVELOP, OPERATE AND MAINTAIN T HE FACILITY. THE CONDITION AS REGARDS DEVELOPMENT, OPERATION AND MAINTENANCE OF A N INFRASTRUCTURE FACILITY WAS CONTEMPORANEOUSLY CONSTRUED BY THE AUTHORITIES AT A LL MATERIAL TIMES, TO COVER WITHIN ITS PURVIEW THE DEVELOPMENT OF AN INFRASTRUC TURE FACILITY UNDER A SCHEME BY WHICH AN ENTERPRISE WOULD BUILD, OWN, LEASE AND EVE NTUALLY TRANSFER THE FACILITY. THIS WAS PERHAPS A PRACTICAL REALIZATION OF THE FA CTOR A DEVELOPER MAY NOT POSSESS THE WHEREWITHAL, EXPERTISE OR RESOURCES TO OPERATE A FACILITY, ONCE CONSTRUCTED. PARLIAMENT EVENTUALLY STEPPED IN TO CLARIFY THAT IT WAS NOT INVARIABLY NECESSARY FOR A DEVELOPER TO OPERATE AND MAINTAIN THE FACILITY . PARLIAMENT WHEN IT AMENDED THE LAW WAS OBVIOUSLY AWARE OF THE ADMINISTRATIVE PRACT ICE RESULTING IN THE CIRCULARS OF THE CENTRAL BOARD OF DIRECT TAXES. THE FACT THAT IN SUCH A SCHEME , AN ENTERPRISE WOULD NOT OPERATE THE FACILITY ITSELF WAS NOT REGAR DED AS BEING A STATUTORY BAR TO THE ENTITLEMENT TO A DEDUCTION UNDER SECTION 80IA O F THE ACT . 9 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. 3.2.6. THE ASSESSEE PLEADED THAT EVEN IF AN ASSESSE E IS MERELY DEVELOPING THE INFRASTRUCTURAL FACILITY WITHOUT OPERATING AND MAIN TAINING THE SAME, IT IS ENTITLED TO DEDUCTION U/S 80IA OF THE ACT. FURTHER CONDITION ( B) LAID OUT IN SECTION 80IA(4) OF THE ACT MANDATES THE EXISTENCE OF AN AGREEMENT WITH THE GOV ERNMENT. MOREOVER, IF SECTION 80IA OF THE ACT GRANTS DEDUCTION ON PROFITS FROM THE ACT IVITY OF DEVELOPMENT CARRIED OUT IN PURSUANCE OF AN AGREEMENT WITH THE GOVERNMENT , IT PRESUPPOSES THAT ASSESSEE WILL EARN SOME PROFITS FROM MERE DEVELOPMENT (WITHOUT OPERATI NG AND MAINTAINING) OF THE INFRASTRUCTURE FACILITY. NOW THE QUESTION THAT ARIS ES HERE IS THAT HOW WOULD AN ASSESSEE ENGAGED IN MERE DEVELOPMENTAL ACTIVITY (AND NO OPER ATION) PURSUANT TO AN AGREEMENT WITH THE GOVERNMENT EARN PROFITS ? THE OBVIOUS ANSWER I S THAT THE ASSESSEE WILL RECOVER ITS COST OF DEVELOPMENT FROM THE GOVERNMENT OTHERWISE THE EN TIRE COST OF DEVELOPMENT WILL BE A LOSS IN ITS HANDS. SIMPLY BECAUSE THE ASSESSEE IS RECEIVING MONEY FROM THE GOVERNMENT DOES NOT MEAN THAT THE ASSESSEE IS NOT A DEVELOPER. 3.3. BASED ON THESE PRINCIPLES AND PLEADINGS, THE ASSESSEE SUBMITTED THAT IT WAS NOT MERELY A WORKS CONTRACTOR, WHO HAD MERELY EMPLOYED ITS LAB OUR UNDER THE PROJECTS FROM THE VARIOUS GOVERNMENT AUTHORITIES. THE ASSESSEE WAS A DEVELOPER. IN ADDITION TO EMPLOYING LABOUR, IT MADE INVESTMENTS, IT DEVELOPED AN ENTERP RISE / INFRASTRUCTURE TO SUPPORT THE WORK UNDER THE VARIOUS PROJECTS. IN ADDITION TO LABOUR, IT DEPLOYED ITS MACHINERY, MATERIALS AND DID ALL THE THINGS NECESSARY (I.E PROVIDED AN ENTER PRISE) TO SUPPORT THE CONSTRUCTION WORK UNDERTAKEN UNDER THE VARIOUS PROJECTS. FURTHER , I T EVEN OBTAINED ALL STATUTORY CLEARANCES REQUIRED IN CONNECTION WITH THE WORKS. THE ASSESSE E WAS PROVIDED WITH THE SITE ALONE AND BY PUTTING ITS OWN INPUTS (NOT LABOUR ALONE) IT CON VERTED THE SITE INTO AN INFRASTRUCTURE FACILITY. IT WAS FURTHER STATED THAT IT IS NOT A CASE, WHERE THE ASSESSEE IS A WORKS CONTRACT SIMPLICITOR, WHERE THE GOVERNMENT AUTHORITY HAS PRO VIDED THE ASSESSEE WITH THE ENTIRE SET UP I.E PLANT AND MACHINERY, MATERIALS, STATUTORY CL EARANCES AND THE INFRASTRUCTURE NEEDED TO SUPPORT CONSTRUCTION AND ALL THE ASSESSEE HAD TO EM PLOY WAS LABOUR TO CARRY OUT CONSTRUCTION. INSTEAD, THE ASSESSEE HAD PROVIDED AN ENTIRE ENTERPRISE WHICH WAS NEEDED TO CONVERT THE SITE GIVEN BY THE GOVERNMENT INTO AN IN FRASTRUCTURE FACILITY. IT WAS FURTHER PLEADED THAT THE AFORESAID ACTIVITIES UNDERTAKEN BY THE ASSESSEE INVOLVED SUBSTANTIAL AMOUNT OF RISK. LIKE ANY OTHER ENTREPRENEUR , WHO EMPLOYS HIS MATERIALS, PLANT, 10 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. MACHINERY , LABOUR, ETC. IN A PROJECT AND UNDERTAKE S RISK, THE ASSESSEE WAS ALSO EXPOSED TO SUBSTANTIAL AMOUNT OF RISK BY VIRTUE OF ENGAGING HI S ESTABLISHMENT IN THE INFRASTRUCTURE PROJECTS. IN ADDITION, THE ASSESSEE WAS EXPOSED TO RISK OF NON-COMPLETION OF WORK WITHIN TIME, ANY DAMAGE CAUSED TO THE WORKS, SITE ETC., IN CREASE IN PRICES OF MATERIALS, LABOUR ETC., BEYOND WHAT THE GOVERNMENT HAD AGREED TO COMPENSATE AS PER THE AGREEMENTS. 3.4. THE ASSESSEE DISCUSSED EACH OF THE CONTRACTS U NDERTAKEN BY IT DURING THE VARIOUS ASSESSMENT YEARS FOR WHICH DEDUCTION U/S 80IA (4) O F THE ACT WAS CLAIMED AS UNDER :- ASST YEAR 2005-06 (ITA NO. 2286/KOL/2013) I. KATHORA PROJECT: RS. 1,38,47,865/- THE AGREEMENT FOR THE AFORESAID PROJECT IS ENCLOSED AS ANNEXURE I OF THE PAPER BOOK. THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARL Y ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL AND PLANT: THE ASSESSEE WAS TO PROVIDE AT HIS OWN COST MATERIALS, PLANT, TOOLS, APPLIANCES ETC REQUIRED FOR PROPER EXECUTION OF THE WORK. FURTHER THE ASSESSEE WAS TO MAKE HIS OWN ARRANGEMENTS FOR THE TRANSPORTATION OF ALL MATE RIALS. (II) LABOUR: THE ASSESSEE WAS TO EMPLOY LABOUR AND PAY WAGES TO THEM. FURTHER IT WAS TO EMPLOY TECHNICAL PERSON THE LABOUR AMENITIES PROVIDED BY THE ASSESSEE ARE A S BELOW : HUTS SANITARY FACILITIES DRINKING WATER BATHING AND WASHING WASTE DISPOSAL MEDICAL FACILITIES FURTHER, THE ASSESSEE WAS TO FOLLOW SAFETY CODE AS SPECIFIED ON PAGE 41. (III) INSPECTION AND TESTING: THE ASSESSEE WAS TO P ROVIDE ALL THE FACILITIES, LABOUR AND MATERIAL NECESSARY FOR THE SAFE AND CONVENIENT INSPECTION AN D TESTING OF MATERIAL AND WORKMANSHIP. (IV) POWER AND WATER: THE ASSESSEE WAS TO MAKE HIS OWN ARRANGEMENT FOR SUPPLY OF WATER, LIGHTS AND POWER TO HIS WORKS AND LABOUR. (V) HAUL ROADS: NECESSARY HAUL ROADS TO WORK SPOT, BORROW AREAS AND WATER SOURCES WAS TO BE SATISFACTORILY CONSTRUCTED AND MAINTAINED BY THE AS SESSEE. (VI) ROYALTY: ALL THE QUARRY FEES, OCTROI DUTIES, R OYALTY ETC. WAS TO BE PAID BY THE ASSESSEE. B. JODHPUR PROJECT: RS. 9,81,86,947/- THE AGREEMENT FOR THE AFORESAID PROJECT IS ENCLOSED AS ANNEXURE II OF THE PAPER BOOK. THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARL Y ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: 11 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (I) DRAWINGS AND DESIGN: THE ASSESSEE WAS RESPONSIB LE FOR THE DESIGN OF THE WORK UNDER THE CONTRACT AND WAS ALSO RESPONSIBLE FOR ACCURACY OF T HE SAID DESIGNS. THE ASSESSEE WAS TO CARRY OUT PREPARATORY WORKS SUC H AS TOPOGRAPHIC SURVEY, SOIL INVESTIGATIONS, GEO-TECHNICAL INVESTIGATIONS ETC. T O PREPARE THE PLANS, L-SECTIONS, DESIGNS, WORKING DRAWINGS ETC. IT WAS TO SUBMIT THE DETAILED DESIGN AND THE EXECUTION DRAWINGS SUCH AS SITE PLANS, GENERAL ARRANGEMENT DRAWINGS, L-SECTION S, PLANS, ARCHITECTURAL, STRUCTURAL DRAWINGS AND ALL WORKING DRAWINGS, FOR APPROVAL. (II) MATERIALS: ALL THE MATERIAL REQUIRED FOR THE W ORK WAS TO BE PROVIDED BY THE ASSESSEE. (III) LABOUR: THE ASSESSEE WAS REQUIRED TO EMPLOY S TAFF FOR EXECUTION OF WORK. (IV) PLANT: THE ASSESSEE WAS TO ARRANGE AND SUPPLY AT ITS OWN COST ALL MATERIAL, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, CORDAGE, TACKLE, S CAFFOLDING AND TEMPORARY WORKS REQUIRED FOR PROPER EXECUTION OF THE WORK. (V) COST OF INSPECTION AND TESTING: FOR ALL EQUIPME NT AND MATERIAL REQUIRED FOR THE EXECUTION OF THE WORK, THE ARRANGEMENT FOR INSPECTION AND EXP ENSES THERETO WAS TO BE BORNE BY THE ASSESSEE. FURTHER, THE ASSESSEE WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, ELECTRICITY, FUEL, CONSUMABLES LABOUR, MATERIALS TO CARRY OUT EFFICIENT TESTING OF EQUIPMENT, MATERIAL AND OTHER PARTS OF WORKS. (VI) WATER AND ELECTRICITY: THE COST OF ALL WATER C ONNECTIONS NECESSARY FOR THE EXECUTION OF THE WORK AND THE COST OF WATER CONSUMED AND HIRE CHARGE S OF METERS AND THE COST OF ELECTRICITY CONSUMED IN CONNECTION WITH THE EXECUTION OF WORK W AS TO BE PAID BY THE ASSESSEE. (VII) SITE OFFICE, STAFF QUARTERS ETC.: THE ASSESSE E WAS TO HAVE AN OFFICE NEAR THE SITE AND A CLERK FOR SERVICE OF COMMUNICATION NOTICES. FURTHER, ALL THE EXPENSES IN CONNECTION WITH PURCHA SE OR CONSTRUCTION OR MAINTENANCE OF SITE OFFICE, STAFF QUARTERS WAS TO BE BORNE BY THE ASSES SEE. (VIII) ROYALTIES AND TAXES: THE ASSESSEE WAS TO PAY ALL ROYALTIES, OCTROI AND OTHER TAXES AND DUTIES IN RESPECT OF MATERIALS CONSUMED ON PUBLIC W ORK. (IX) INSURANCE: THE ASSESSEE WAS TO TAKE ACCIDENT I NSURANCE AND THIRD PARTY INSURANCE.THE RESPONSIBILITY OF TIMELY PAYMENT OF PREMIUMS WAS TH AT OF THE ASSESSEE. (X) QUALITY ASSURANCE SYSTEM: THE ASSESSEE WAS TO I NSTITUTE A QUALITY ASSURANCE SYSTEM TO DEMONSTRATE COMPLIANCE WITH REQUIREMENTS OF THE CON TRACT. (XI) RIGHTS OF WAY AND FACILITIES: THE ASSESSEE WAS TO BEAR ALL COSTS AND CHARGES FOR SPECIAL/TEMPORARY RIGHTS OF WAY WHICH MAY BE REQUIR ED FOR THE WORK. (XII) SECURITY OF THE SITE: THE ASSESSEE WAS TO PRO VIDE ADEQUATE MANPOWER AND MEANS FOR THE SECURITY OF THE MATERIAL, WORK-IN-PROGRESS ETC. IT WAS RESPONSIBLE FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. FROM THE PERUSAL OF THE TERMS AND CONDITIONS OF THE AGREEMENTS (ABOVE), IT IS CLEAR THAT IT IS NOT A CASE WHERE THE ASSESSEE WAS PROVIDED WITH THE ESTABLISHMENT AND MATERIALS REQUIRED TO EXECUTE THE WORK, WHICH HAPPENS IN CASE OF WORKS CO NTRACT WHERE THE CONTRACTOR GETS THE 12 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. MATERIAL AND OTHER REQUISITES FROM THE CLIENT AND A LL HE HAS TO DO IS EMPLOY LABOUR. THE ASSESSEE IN THE GIVEN CASE WAS TO PROCURE RAW MATER IAL, MAKE ARRANGEMENTS FOR POWER, WATER, PLANT MACHINERY ETC., AND CONDUCT ALL THE OTHER ACT IVITIES NEEDED FOR CONSTRUCTION. HENCE IN THE LIGHT OF THE DISCUSSION THE ASSESSEE I S ENTITLED TO DEDUCTION U/S 80-IA OF THE ACT. IN ADDITION TO THE ABOVE, THE ASSESSEE WAS EVEN RES PONSIBLE FOR OPERATIONS AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY, IN THE FOLLOWING CASES : JODHPUR PROJECT: THE PROJECT HAD AN OPERATION AND M AINTENANCE PERIOD OF 5 YEARS. KATHORA PROJECT. ASST YEAR 2007-08 (ITA NO. 2287/KOL/2013 ) I. BANNAHALLI HUNDI LIFT IRRIGATION SCHEME: RS. 58, 92,474/- THE AGREEMENT BETWEEN THE ASSESSEE AND CAUVERY NEER AVARI NIGAM LTD. FOR THE AFORESAID PROJECT HAS BEEN ENCLOSED AT PAGES 242 TO 340 OF TH E PAPER BOOK. THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL: THE CONTRACTOR WAS RESPONSIBLE TO ARR ANGE AT HIS OWN EXPENSE ALL THE MATERIAL REQUIRED FOR WORK ( WITH THE EXCEPTION OF SOME SPEC IAL MATERIALS) (II) LABOUR: IN ADDITION TO LABOUR, THE ASSESSEE WA S REQUIRED TO HIRE TECHNICAL STAFF AT HIS COST. IT WAS REQUIRED TO PROVIDE MEDICAL AID TO WO RKMEN. (III) PLANT: THE ASSESSEE WAS REQUIRED TO SUPPLY AT HIS OWN COST, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, ETC. REQUIRED FOR PROPER EXECU TION OF THE WORK. (IV) NECESSARY FENCING AND LIGHTS: THE ASSESSEE WAS TO PROVIDE ALL THE NECESSARY FENCING AND LIGHTS REQUIRED TO PROTECT THE PUBLIC FROM ACCIDENT . (V) QUARRY FEES, ROYALTY ETC. :ALL THE QUARRY FEES, ROYALTIES, OCTROI, DUES LEVIED BY THE STATE GOVERNMENT WAS TO BE PAID BY THE CONTRACTOR. II. HONGANUR LIFT IRRIGATION SCHEME: RS. 2,01,781/- THE AGREEMENT BETWEEN THE ASSESSEE AND CAUVERY NEER AVARI IGAM LTD. FOR THE AFORESAID PROJECT HAS BEEN ENCLOSED AT PAGES 341 TO 370 OF TH E PAPER BOOK. THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL: THE RESPONSIBILITY OF PROCURING SAFE STORAGE AND SAFE TRANSPORTATION AND USAGE OF ALL MATERIALS INCLUDING CEMENT, STEEL, EXPLOSIVE S (AND LICENSE THEREOF) WAS THAT OF THE ASSESSEE. (II) LABOUR: IN ADDITION TO LABOUR, THE ASSESSEE WA S REQUIRED TO HIRE TECHNICAL STAFF AT HIS COST. FURTHER, IT WAS REQUIRED TO PROVIDE THE FOLLO WING LABOUR AMENITIES: - IT WAS REQUIRED TO PROVIDE MEDICAL AID TO WORKMEN. 13 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. - IT WAS REQUIRED TO PROVIDE ALL THE SAFETY EQUIPMENT AND FIRST AID APPARATUS FOR USE OF THE PERSONS EMPLOYED ON SITE. - LABOUR CAMPS AND ARRANGEMENT OF WATER AND POWER FOR THE SAME - REST SHED, CRECHES AND DRINKING WATER ARRANGEMENTS ON THE WORK SPOT - FURTHER, THE LAND REQUIRED FOR QUARTERS ON WORK SPO T WAS TO BE ARRANGED BY THE CONTRACTOR. (III) OFFICE ETC. ON SITE: THE RESPONSIBILITY FOR C ONSTRUCTING A SITE OFFICE WAS THAT OF THE CONTACTOR (IV) PLANT: THE ASSESSEE WAS REQUIRED TO SUPPLY AT HIS OWN COST, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, ETC. REQUIRED FOR PROPER EXECU TION OF THE WORK. (V) NECESSARY FENCING AND LIGHTS: THE ASSESSEE WAS TO PROVIDE ALL THE NECESSARY FENCING AND LIGHTS REQUIRED TO PROTECT THE PUBLIC FROM ACCIDENT . (VI) POWER AND WATER: THE POWER AND WATER REQUIRED FOR HIS CAMPS AS WELL AS THE WORK WAS TO BE ARRANGED BY THE ASSESSEE. (VII) CLEARING THE SITE: THE AREA TO BE OCCUPIED FO R WORK WAS TO BE CLEARED OFF ALL VEGETATIONS BY THE ASSESSEE, FOR WHICH IT WAS NOT ENTITLED TO A NY EXTRA PAYMENT (VIII) ACCESS ROADS: ALL HAULAGE ROADS, ACCESS ROAD S TO WORK SPOTS, QUARRY ROADS ETC. AND ALL DIVERSION ROADS FOUND NECESSARY DURING CONSTRUCTION WAS TO BE FORMED AND MAINTAINED BY THE ASSESSEE. III. SONTHI PROJECT: RS. 5,78,862 THE AGREEMENT BETWEEN THE ASSESSEE AND KRISHNA BHAG YAJALA NIGAM LIMITED FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE I O F THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTR ACTOR: (I) DRAWINGS AND DESIGNS OF TEMPORARY WORKS: THE ASSESS EE WAS RESPONSIBLE FOR THE DRAWING AND DESIGN OF TEMPORARY WORKS. IT WAS REQUI RED TO SUBMIT THE SAID DRAWINGS TO THE ENGINEERS AND OBTAIN HIS APPROVAL BEFORE STA RTING SUCH WORK. (II) MATERIALS REQUIRED FOR THE PROJECT: THE CONTR ACTOR WAS RESPONSIBLE FOR PROCUREMENT OF REQUIRED QUANTITY OF PIPES, SPECIAL MACHINERY, E LECTRICAL ITEMS ETC. (III) LABOUR: THE CONTRACTOR WAS REQUIRED TO MAKE ITS OWN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, FOR THEIR PAYME NT, HOUSING, FEEDING AND TRANSPORT. FURTHER HE WAS TO TAKE ADEQUATE PROVISIO NS FOR THE SAFETY OF THE WORKMEN AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE E MPLOYEES. (IV) PLANT:ALL TOOLS AND PLANTS REQUIRED FOR THE W ORK WAS TO SUPPLIED BY THE CONTRACTOR AT ITS OWN COST. (V) POWER & WATER: THE CONTRACTOR WAS REQUIRED TO MAKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITE AND MAKE ITS OWN ARRAN GEMENT OF WATER. (VI) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED TO PROVIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED T O CONDUCT ALL THE NECESSARY SURVEYS. 14 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (VII) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIR ED, AT HIS OWN EXPENSE, TO ERECT AND MAINTAIN TEMPORARY FENCES AND GATES ALONG THE BOUND ARIES. (VIII) ROYALTY: THE CONTRACTOR WAS TO PAY ALL FEES , ROYALTIES, OCTROI DUES LEVIED BY THE STATE GOVERNMENT OR ANY OTHER LOCAL BODY. IV. TARAKA LIFT IRRIGATION SCHEME: RS. 3,66,176/- THE AGREEMENT BETWEEN THE ASSESSEE AND CAUVERY NEER AVARI NIGAM LTD. FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE II OF THE PAP ER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGRE EMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL: THE RESPONSIBILITY OF PROCURING SAFE STOR AGE AND SAFE TRANSPORTATION AND USAGE OF ALL MATERIALS INCLUDING CEMENT, STEEL, EXP LOSIVES (AND LICENSE THEREOF) WAS THAT OF THE ASSESSEE. (II) LABOUR: IN ADDITION TO LABOUR, THE ASSESSEE WAS REQ UIRED TO HIRE TECHNICAL STAFF AT HIS COST. FURTHER, IT WAS REQUIRED TO PROVIDE THE FOLLO WING LABOUR AMENITIES: IT WAS REQUIRED TO PROVIDE MEDICAL AID TO WORKMEN . IT WAS REQUIRED TO PROVIDE ALL THE SAFETY EQUIPME NT AND FIRST AID APPARATUS FOR USE OF THE PERSONS EMPLOYED ON SITE. LABOUR CAMPS AND ARRANGEMENT OF WATER AND POWER F OR THE SAME. REST SHED, CRECHES AND DRINKING WATER ARRANGEMENT S ON THE WORK SPOT FURTHER, THE LAND REQUIRED FOR QUARTERS ON WORK S POT WAS TO BE ARRANGED BY THE CONTRACTOR. (III) OFFICE ETC. ON SITE:THE RESPONSIBILITY FOR CONSTRUC TING A SITE OFFICE WAS THAT OF THE CONTACTOR (IV) PLANT: THE ASSESSEE WAS REQUIRED TO SUPPLY AT HIS OWN COST, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, ETC. REQUIRED FOR PROPER EXECU TION OF THE WORK. (V) NECESSARY FENCING AND LIGHTS: THE ASSESSEE WAS TO PROVIDE ALL THE NECESSARY FENCING AND LIGHTS REQUIRED TO PROTECT THE PUBLIC FROM ACCI DENT. (VI) QUARRY FEES, ROYALTY ETC. :ALL THE QUARRY FEE S, ROYALTIES, OCTROI, DUES LEVIED BY THE STATE GOVERNMENT WAS TO BE PAID BY THE CONTRACTOR. (VII) POWER AND WATER: THE POWER AND WATER REQUIRE D FOR HIS CAMPS AS WELL AS THE WORK WAS TO BE ARRANGED BY THE ASSESSEE. (VIII) CLEARING THE SITE: THE AREA TO BE OCCUPIED F OR WORK WAS TO BE CLEARED OFF ALL VEGETATIONS BY THE ASSESSEE, FOR WHICH IT WAS NOT E NTITLED TO ANY EXTRA PAYMENT. (IX) ACCESS ROADS: ALL HAULAGE ROADS, ACCESS ROADS TO WORK SPOTS, QUARRY ROADS ETC. AND ALL DIVERSION ROADS FOUND NECESSARY DURING CONSTRUC TION WAS TO BE FORMED AND MAINTAINED BY THE ASSESSEE. V. URBANI LIFT IRRIGATION SCHEME: RS. 1,82,11,272/- THE AGREEMENT BETWEEN THE ASSESSEE AND KAMATAKA NEE RAVARI NIGAM LIMITED FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE V O F THE PAPER BOOK, SUBMITTED BEFORE THE 15 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTR ACTOR: (I) DRAWINGS AND DESIGNS: THE ASSESSEE WAS RESPONS IBLE FOR THE DRAWING AND DESIGN OF TEMPORARY WORKS. IT WAS REQUIRED TO SUBMIT THE SAID DRAWINGS TO THE ENGINEERS AND OBTAIN HIS APPROVAL BEFORE STARTING SUCH WORK. (II) MATERIALS REQUIRED FOR THE PROJECT: THE CONTRACTOR WAS RESPONSIBLE FOR PROCUREMENT OF REQUIRED QUANTITY OF PIPES, SPECIAL MACHINERY, E LECTRICAL ITEMS ETC. (III) LABOUR: THE CONTRACTOR WAS REQUIRED TO MAKE ITS OWN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, FOR THEIR PAYME NT, HOUSING, FEEDING AND TRANSPORT. FURTHER HE WAS TO TAKE ADEQUATE PROVISIO NS FOR THE SAFETY OF THE WORKMEN AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE E MPLOYEES. (IV) PLANT:ALL TOOLS AND PLANTS REQUIRED FOR THE WORK WA S TO SUPPLIED BY THE CONTRACTOR AT ITS OWN COST. (V) POWER & WATER: THE CONTRACTOR WAS REQUIRED TO MAKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITE AND MAKE ITS OWN ARRAN GEMENT OF WATER. (VI) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED TO PRO VIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED T O CONDUCT ALL THE SURVEYS REQUIRED FOR EXECUTION OF THE WORK. (VII) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIRED, AT HIS OWN EXPENSE, TO ERECT AND MAINTAIN TEMPORARY FENCES AND GATES ALONG THE BOUND ARIES. (VIII) ROYALTY : THE CONTRACTOR WAS TO PAY ALL FEES, ROYAL TIES, OCTROI DUES LEVIED BY THE STATE GOVERNMENT OR ANY OTHER LOCAL BODY VI. SHRI RAMESHWARA LIFT IRRIGATION SCHEME: RS. 4,40,12 ,894/- THE AGREEMENT BETWEEN THE ASSESSEE AND KAMATAKA NEE RAVARI NIGAM LIMITED FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE VI OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTR ACTOR: (I) DRAWINGS AND DESIGNS FOR TEMPORARY WORKS: THE A SSESSEE WAS RESPONSIBLE FOR THE DRAWING AND DESIGN OF TEMPORARY WORKS. IT WAS REQUI RED TO SUBMIT THE SAID DRAWINGS TO THE ENGINEERS AND OBTAIN HIS APPROVAL BEFORE STARTING S UCH WORK. (II) MATERIALS REQUIRED FOR THE PROJECT: THE CONTRA CTOR WAS RESPONSIBLE FOR PROCUREMENT OF REQUIRED QUANTITY OF PIPES, SPECIAL MACHINERY, ELEC TRICAL ITEMS ETC. (III) LABOUR: THE CONTRACTOR WAS REQUIRED TO MAKE I TS OWN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, FOR THEIR PAYME NT, HOUSING, FEEDING AND TRANSPORT. FURTHER HE WAS TO TAKE ADEQUATE PROVISIONS FOR THE SAFETY OF THE WORKMEN AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE EMPLOYEES. (IV) PLANT:ALL TOOLS AND PLANTS REQUIRED FOR THE WO RK WAS TO SUPPLIED BY THE CONTRACTOR AT ITS OWN COST. 16 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (V) POWER & WATER: THE CONTRACTOR WAS REQUIRED' TO MAKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITE AND MAKE ITS OWN ARRAN GEMENT OF WATER. (VI) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED T O PROVIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED TO CONDUCT ALL THE SURVEYS REQUIRED FOR EXECUTION OF THE WORK. (VII) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIRE D, AT HIS OWN EXPENSE, TO ERECT AND MAINTAIN TEMPORARY FENCES AND GATES ALONG THE BOUND ARIES. (VIII)ROYALTY: THE CONTRACTOR WAS TO PAY ALL FEES, ROYALTIES, OCTROI DUES LEVIED BY THE STATE GOVERNMENT OR ANY OTHER LOCAL BODY. VII. SINGATALUR LIFT IRRIGATION SCHEME: RS. 47,56,7 96/- THE AGREEMENT BETWEEN THE ASSESSEE AND KAMATAKA NEE RAVARI NIGAM LIMITED FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE VII OF THE PA PER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEAR LY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGNS FOR TEMPORARY WORKS: THE ASSES SEE WAS RESPONSIBLE FOR THE DRAWING AND DESIGN OF TEMPORARY WORKS. IT WAS REQUI RED TO SUBMIT THE SAID DRAWINGS TO THE ENGINEERS AND OBTAIN HIS APPROVAL BEFORE STARTI NG SUCH WORK. (II) MATERIALS REQUIRED FOR THE PROJECT: THE CONTRACTOR WAS RESPONSIBLE FOR PROCUREMENT OF REQUIRED QUANTITY OF PIPES, SPECIAL MACHINERY, ELEC TRICAL ITEMS ETC. (III) LABOUR: IN ADDITION TO MAKING PAYMENTS TO LABOURERS AND TECHNICAL STAFF THE ASSESSEE WAS TO TAKE ADEQUATE PROVISIONS FOR THE SAFETY OF T HE WORKMEN AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE EMPLOYEES. (IV) PLANT: ALL TOOLS AND PLANTS REQUIRED FOR THE WORK W AS TO SUPPLIED BY THE CONTRACTOR AT ITS OWN COST. (V) POWER & WATER: THE CONTRACTOR WAS REQUIRED TO MAKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITE AND MAKE ITS OWN ARRAN GEMENT OF WATER. (VI) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED TO PRO VIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED TO CONDUCT ALL THE SURVEYS REQUIRED FOR EXECUTION OF THE WORK. (VII) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIRED, AT HIS OWN EXPENSE, TO ERECT AND MAINTAIN TEMPORARY FENCES AND GATES ALONG THE BOUND ARIES. (VIII) WATCHING AND LIGHTING: THE CONTRACTOR WAS TO PROVID E, AT ITS OWN EXPENSE, SUFFICIENT LIGHTING AND WATCHING VIII. RAMGANJMANDI PACHPAHAR WATER SUPPLY PROJECT: RS. 3,11,61,671/- THE AGREEMENT BETWEEN THE ASSESSEE AND PUBLIC HEALT H ENGINEERING DEPARTMENT (PHED), GOVERNMENT OF RAJASTHAN, FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE VIII OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DESIGN AND DRAWINGS: THE ASSESSEE WAS REQUIRED TO S UBMIT THE DETAILED DESIGNS AND DRAWINGS SUCH AS SITE PLANS, L-SECTION, GENERAL ARR ANGEMENT DRAWINGS, PLANS, ARCHITECTURAL STRUCTURAL DRAWINGS AND WORKINGS DRAW INGS OF ALL CIVIL, MECHANICAL AND ELECTRICAL ENGINEERING WORKS. FURTHER THE ASSES SEE WAS RESPONSIBLE FOR THE 17 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. CORRECTNESS, ACCURACY OF ALL DESIGNS AND FOR SAFETY & SOUNDNESS OF ALL STRUCTURES CONSTRUCTED UNDER TILL CONTRACT. (II) MATERIALS: THE ASSESSEE WAS REQUIRED TO PROVIDE ALL THE MATERIAL REQUIRED FOR THE WORK. (III) LABOUR: THE ASSESSEE WAS REQUIRED TO EMPLOY SKILLED AND EXPERIENCED PERSONS IN ALL ACTIVITIES. FURTHER IT WAS TO EMPLOY LABOUR IN SUFF ICIENT NUMBER TO MAINTAIN THE REQUIRED RATE OF PROGRESS. (IV) PLANT: THE ASSESSEE WAS REQUIRED TO MAKE HIS OWN AR RANGEMENT OG PLANT TOOLS, APPLIANCES REQUIRED FOR PROPER EXECUTION OF THE WOR K. (V) POWER & WATER: THE COST OF ALL WATER CONNECTIO NS NECESSARY FOR THE EXECUTION OF WORK, THE COST OF WATER CONSUMED, HIRE CHARGES OF M ETERS AND THE COST OF ELECTRICITY CONSUMED IN CONNECTION WITH THE EXECUTION OF THE WO RK, WAS TO PAID BY THE ASSESSEE. (VI) SITE OFFICE, STAFF QUARTERS GODOWN ETC: FOR T HE EXECUTION OF THE WORK, THE ASSESSEE WAS TO CONSTRUCT, AT ITS OWN COST, SITE OFFICE, GOD OWNS, STAFF QUARTERS ETC ON SITE (VII) SAFETY AND SECURITY: THE ASSESSEE WAS TO COM PLY WITH ALL APPLICABLE SAFETY REGULATIONS AND TAKE CARE OF THE SAFETY OF ALL THE PERSONS ON THE SITE. THE ASSESSEE WAS FURTHER RESPONSIBLE FOR SITE'S SECURITY, I.E FO R KEEPING UNAUTHORISED PERSONS OFF THE SITE OFFICES, CAMPUS. TO MEET THIS END, IT WAS REQUIRED TO RECRUIT ADEQUATE MANPOWER. (VIII) TAXES AND ROYALTY: ROYALTY OR OTHER TAX ON M ATERIALS PAYABLE TO THE GOVERNMENT WAS TO BE PAID BY THE ASSESSEE. (IX) INSPECTION AND TESTING: COST OF INSPECTION OF EQUIPMENT AND MATERIAL WAS TO BE BORNE BY THE ASSESSEE. FURTHER THE ASSESSEE WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, DOCUMENTS AND OTHER INFORMATION, ELECTRICITY, EQUIP MENT FUEL, CONSUMABLE STORES, LABOUR, MATERIALS AND QUALIFIED AND EXPERIENCED STAFF NECES SARY TO CARRY. OUT THE TESTING PROCEDURES EFFICIENTLY. IX. SANTALDIH THERMAL POWER PROJECT, WEST BENGAL: RS.7,00,72,693/- THE AGREEMENT BETWEEN THE ASSESSEE AND THE WEST BEN GAL POWER DEVELOPMENT CORPORATION LTD., FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED A S ANNEXURE IX OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING COND ITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS: THE ASSESSEE WAS RESPONSIBLE FOR DEVELOPI NG DETAILED DRAWINGS TO ADOPT EQUIPMENT AND MATERIALS TO BE SUPPLIED TO THE REQUI REMENTS INDICATED IN THE SPECIFICATION. FURTHER, IT WAS RESPONSIBLE FOR AND WAS TO PAY FOR ANY ALTERATIONS OF WORK DUE TO DISCREPANCIES IN THE DRAWINGS. (II) MATERIALS: THE ASSESSEE WAS RESPONSIBLE FOR ARRANGE MENT OF MATERIALS REQUIRED FOR THE WORK. FURTHER, THE ASSESSEE WAS REQUIRED TO EST ABLISH ON SITE TESTING FACILITIES AND WAS REQUIRED TO CONDUCT TESTS, AT ITS OWN COST, AS SPECIFIED. (III) LABOUR: THE ASSESSEE WAS REQUIRED TO MAKE AR RANGEMENTS FOR LABOUR REQUIRED FOR THE WORK. IT WAS RESPONSIBLE FOR PAYMENT OF WAGES A ND WAS REQUIRED TO OBSERVE THAT HOURS AND CONDITIONS OF LABOUR ARE NOT UNFAVOURABLE . 18 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. IN ADDITION TO THE ABOVE, THE ASSESSEE WAS TO DEPLO Y ENGINEERS AND SUPERVISORY PERSONNEL REQUIRED FOR WORK. FURTHER IT WAS RESPONSIBLE FOR PROVIDING ACCOMMODAT ION AND DAILY TRANSPORT TO ITS LABOUR AND OTHER PERSONNEL. (IV) ERECTION/CONSTRUCTION TOOLS, TACKLES AND MACH INERY: THE ASSESSEE WAS TO PROVIDE ALL CONSTRUCTION/ERECTION MACHINERY, TOOLS, TACKLES AND SCAFFOLDING REQUIRED FOR WORK. (V) INSURANCE: THE ASSESSEE WAS REQUIRED TO ARRANG E, AT ITS OWN COST, ALL INSURANCE PERTINENT TO THE WORK. (VI) SITE OFFICE: THE ASSESSEE HAD THE RESPONSIBIL ITY OF SITE OFFICE CONSTRUCTION AND APPROACH RODS AS REQUIRED. FURTHER IT WAS TO BEAR A LL EXPENSES FOR SPECIAL AND TEMPORARY WAY LEAVES REQUIRED IN CONNECTION WITH AC CESS TO THE SITE. (VII) OTHERS: ANY OPEN/COVERED STORAGE REQUIRED FOR THE PROTECT ION AND STORAGE OF GOODS CONSTRUCTION MATERIALS AND MACHINERY WAS TO BE CONSTRUCTED BY TH E ASSESSEE AT HIS OWN COST. WATCH AND WARD POSTAGE, TELEPHONE AND TELEGRAPH EXPENSES CLEANING UP THE SITE THE ASSESSEE WAS TO TAKE ALL THE SAFETY PRECAUTIO NS DURING THE ERECTION/CONSTRUCTION WORK. PROVISION OF SANITARY CONVENIENCE IN THE SITE OFF ICE, STORES AND FOR THE USE OF WORKMEN AT THE SITE AND AT LABOUR COLONY. LIGHTS, GUARDS, FENCING AND WATCHING X. KERALA MEENAD PROJECTS: RS. 21,85,398/-: THE AGREEMENT BETWEEN THE ASSESSEE AND KERALA WATER AUTHORITY, FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE X OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARL Y ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I)ATTENTION IS FIRSTLY INVITED TO CLAUSE 8 (PAGE 6 ) (GENERAL OBLIGATIONS) OF THE AGREEMENT EXTRACTS OF WHICH HAS BEEN PRODUCED BELOW: '8.1 THE CONTRACTOR SHALL, WITH DUE CARE AND DILIGE NCE, DESIGN (TO THE EXTENT PROVIDED FOR BY THE CONTRACT), EXECUTE AND COMPLETE THE WORKS AND REMEDY ANY DEFECTS THEREIN IN ACCORDANCE WITH THE PROVISIONS O F THE CONTRACT. THE CONTRACTOR SHALL PROVIDE ALL SUPERINTENDENCE, LABOUR, MATERIAL S, PLANT, CONTRACTOR'S EQUIPMENT AND ALL THE OTHER THINGS, WHETHER OF A TEMPORARY OR PERMANENT NATURE, REQUIRED IN AND FOR SUCH DESIGN, EXECUTION, COMPLETION AND REME DYING OF ANY DEFECTS, SO FAR AS THE NECESSITY FOR PROVIDING THE SAME IS SPECIFIED I N OR IS REASONABLY TO BE INFERRED FROM THE CONTRACT' FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE WAS NO T MERELY PROVIDING LABOUR UNDER THE CONTRACT. IN ADDITION TO LABOUR IT WAS REQUIRED TO MAKE ALL ARRANGEMENTS INCLUDING MATERIALS, EQUIPMENT, SUPERINTENDENCE AND ANY OTHER THING REQU IRED FOR COMPLETION OF THE WORK. (II) SUBMISSION OF PROGRAMME AND ESTIMATION OF CASH FLOWS: UNDER CLAUSE 14.1 (PAGE NO. 8) THE ASSESSEE WAS REQUIRED TO SUBMIT A DETAILED PROG RAMME FOR THE EXECUTION OF THE WORKS. FURTHER, UNDER CLAUSE 14.3, IT WAS REQUIRED TO PROV IDE THE ENGINEER A DETAILED CASH FLOW 19 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. ESTIMATE IN QUARTERLY PERIODS. AS PER CLAUSE 14.4, SUBMISSION OF THE PROGRAMME AND ITS APPROVAL BY THE ENGINEER, DID NOT RELIEVE THE ASSES SEE OF ITS DUTIES AND RESPONSIBILITIES (III) SUPERINTENDENCE: THE ASSESSEE WAS TO PROVIDE ALL NE CESSARY SUPERINTENDENCE DURING THE EXECUTION OF WORKS. (CLAUSE 15.1 ON PAGE 8) (IV) LABOUR: UNDER CLAUSE 34.1 (PAGE 15), THE ASSES SEE WAS REQUIRED TO MAKE HIS OWN ARRANGEMENTS FOR THE ENGAGEMENT OF ALL STAFF AND LA BOUR, LOCAL OR OTHER, AND FOR THEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. (V) TESTING OF MATERIALS AND PLANT: IN ADDITION TO PROVISION OF SPECIFIED PLANT AND MATERIAL, THE ASSESSEE WAS REQUIRED TO PROVIDE ASSISTANCE, LA BOUR, ELECTRICITY, FUELS, STORES, APPARATUS AND INSTRUMENTS AS ARE NORMALLY REQUIRED FOR EXAMIN ING, MEASURING AND TESTING ANY MATERIALS OR PLANTS. (CLAUSE 36.1, PAGE 15). THE CO ST OF MAKING THE TEST WAS TO BE BORNE BY THE ASSESSEE (CLAUSE 36.2 AND 36.3) (VI) SAFETY, SECURITY AND PROTECTION OF THE ENVIRON MENT: UNDER CLAUSE 19 .1 (B) (PAGE 9) THE ASSESSEE WAS REQUIRED TO PROVIDE AND MAINTAIN AT HI S OWN COST ALL LIGHTS, GUARDS, FENCING, WARNING SIGNS AND WATCHING, WHEN OR WHERE NECESSARY . FURTHER UNDER PARA (C), IT WAS TO TAKE ALL THE STEPS TO PROTECT THE ENVIRONMENT. (VII)ROYALTY: THE ASSESSEE WAS REQUIRED TO PAY ALL TONNAGE AND OTHER ROYALTIES, RENT AND OTHER PAYMENTS OR COMPENSATION, IF ANY, FOR GETTING STONE, SAND, GRAVEL, CLAY OR OTHER MATERIALS REQUIRED FOR THE WORK (CLAUSE 28.2, PAGE 13) (VIII) IMPROVEMENT OF ROADS ETC.: UNDER CLAUSE 30.2 (PAGE 14), THE ASSESSEE WAS RESPONSIBLE FOR PAYING THE COST OF STRENGTHENING ANY BRIDGES OR IMPROVING ANY ROAD COMMUNICATING WITH OR ON THE ROUTES TO THE SITE TO FACILITATE THE MOVE MENT OF EQUIPMENT AND OTHER TEMPORARY WORKS. XI. KERALA PUTTUVAM PROJECT: RS. 21,13,123/- THE AGREEMENT BETWEEN THE ASSESSEE AND KERALA WATER AUTHORITY, FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE X OF THE PAPER BOOK, BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLIS H THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I)ATTENTION IS FIRSTLY INVITED TO CLAUSE 8(PAGE 6) (GENERAL OBLIGATIONS) OF THE AGREEMENT EXTRACTS OF WHICH HAS BEEN PRODUCED BELOW: '8.1 THE CONTRACTOR SHALL, WITH DUE CARE AND DILIGE NCE, DESIGN (TO THE EXTENT PROVIDED FOR BY THE CONTRACT), EXECUTE AND COMPLETE THE WORKS AND R EMEDY ANY DEFECTS THEREIN IN ACCORDANCE WITH THE PROVISIONS OF THE CONTRACT. THE CONTRACTOR SHALL PROVIDE ALL SUPERINTENDENCE, LABOUR, MATERIALS, PLANT, CONTRACTOR'S EQUIPMENT AN D ALL THE OTHER THINGS, WHETHER OF A TEMPORARY OR PERMANENT NATURE, REQUIRED IN AND FOR SUCH DESIGN, EXECUTION, COMPLETION AND REMEDYING OF ANY DEFECTS, SO FAR AS THE NECESSITY F OR PROVIDING THE SAME IS SPECIFIED IN OR IS REASONABLY TO BE INFERRED FROM THE CONTRACT' FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE WAS NO T MERELY PROVIDING LABOUR UNDER THE CONTRACT. IN ADDITION TO LABOUR IT WAS REQUIRED TO MAKE ALL ARRANGEMENTS INCLUDING MATERIALS, EQUIPMENT, SUPERINTENDENCE AND ANY OTHER THING REQU IRED FOR COMPLETION OF THE WORK. (II) SUBMISSION OF PROGRAMME AND ESTIMATION OF CASH FLOWS: UNDER CLAUSE 14.1 (PAGE NO. 8) THE ASSESSEE WAS REQUIRED TO SUBMIT A DETAILED PROG RAMME FOR THE EXECUTION OF THE WORKS. 20 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. FURTHER, UNDER CLAUSE 14.3, IT WAS REQUIRED TO-PROV IDE THE ENGINEER A DETAILED CASH FLOW ESTIMATE IN QUARTERLY PERIODS. AS PER CLAUSE 14.4, SUBMISSION OF THE PROGRAMME AND ITS APPROVAL BY THE ENGINEER, DID NOT RELIEVE THE ASSES SEE OF ITS DUTIES AND RESPONSIBILITIES (III) SUPERINTENDENCE: THE ASSESSEE WAS TO PROVIDE ALL NECESSARY SUPERINTENDENCE DURING THE EXECUTION OF WORKS. (CLAUSE 15.1 ON PAGE 8) (IV) LABOUR: UNDER CLAUSE 34.1 (PAGE 15), THE ASSES SEE WAS REQUIRED TO MAKE HIS OWN ARRANGEMENTS FOR THE ENGAGEMENT OF ALL STAFF AND LA BOUR, LOCAL OR OTHER, AND FOR THEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. (V) TESTING OF MATERIALS AND PLANT: IN ADDITION TO PROVISION OF SPECIFIED PLANT AND MATERIAL, THE ASSESSEE WAS REQUIRED TO PROVIDE ASSISTANCE, LA BOUR, ELECTRICITY, FUELS, STORES, APPARATUS AND INSTRUMENTS AS ARE NORMALLY REQUIRED FOR EXAMIN ING, MEASURING AND TESTING ANY MATERIALS OR PLANTS. (CLAUSE 36.1, PAGE 15). THE CO ST OF MAKING THE TEST WAS TO BE BORNE BY THE ASSESSEE (CLAUSE 36.2 AND 36.3) (VI) SAFETY, SECURITY AND PROTECTION OF THE ENVIRON MENT: UNDER CLAUSE 19.1 (B) (PAGE 9) THE ASSESSEE WAS REQUIRED TO PROVIDE AND MAINTAIN AT HI S OWN COST ALL LIGHTS, GUARDS, FENCING, WARNING SIGNS AND WATCHING, WHEN OR WHERE NECESSARY . FURTHER UNDER PARA (C), IT WAS TO TAKE ALL THE STEPS TO PROTECT THE ENVIRONMENT. (VII)ROYALTY: THE ASSESSEE WAS REQUIRED TO PAY ALL TONNAGE AND OTHER ROYALTIES, RENT AND OTHER PAYMENTS OR COMPENSATION, IF ANY, FOR GETTING STONE, SAND, GRAVEL, CLAY OR OTHER MATERIALS REQUIRED FOR THE WORK (CLAUSE 28.2, PAGE 13) (VIII) IMPROVEMENT OF ROADS ETC.: UNDER CLAUSE 30.2 (PAGE 14), THE ASSESSEE WAS RESPONSIBLE FOR PAYING THE COST OF STRENGTHENING ANY BRIDGES OR IMPROVING ANY ROAD COMMUNICATING WITH OR ON THE ROUTES TO THE SITE TO FACILITATE THE MOVE MENT OF EQUIPMENT AND OTHER TEMPORARY WORKS. XII. SRIPADASAGAR PROJECT: RS. 1,20,89,179/- THE AGREEMENT BETWEEN THE ASSESSEE AND GOVERNMENT O F ANDHRA PRADESH (IRRIGATION & CAD DEPARTMENT), FOR THE AFORESAID PROJECT HAD BEEN ENC LOSED AS ANNEXURE XI OF THE PAPER BOOK BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LIS TED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS C ONTRACTOR: (I) ATTENTION IS FIRSTLY INVITED TO PAGE 294, PARA 4.1 (GENERAL OBLIGATIONS) OF THE AGREEMENT. A PERUSAL OF THE SAME SHALL CLARIFY THAT THE ASSESS EE WAS REQUIRED TO PROVIDE ALL LABOUR INCLUDING SUPERVISION THEREOF. IN ADDITION, IT WAS TO PROVIDE MATERIALS, CONSTRUCTION EQUIPMENT AND ALL THE OTHER THINGS (WHETHER OF A TE MPORARY OR A PERMANENT NATURE) REQUIRED FOR THE COMPLETION OF THE WORK. (II) LABOUR: THE ASSESSEE WAS TO MAKE ITS OWN ARRAN GEMENT FOR THE ENGAGEMENT OF STAFF AND LABOUR, LOCAL OR OTHERWISE, AND FOR THEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. (PAGE 308 & 309, PARA 6.1) (IV) ELECTRICITY, WATER & GAS: THE ASSESSEE WAS TO MAKE ITS OWN ARRANGEMENTS FOR ELECTRICITY, WATER AND GAS. AS PER PARA 4.1.3 ON PAGE 295 THE ASSESSEE WAS TO I NSTALL DIESEL GENERATING SETS AND OPERATE THE SAME FOR ITS REQUIREMENT OF POWER. 21 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. FURTHER AS PER PARA 4.1.5 AND 4.1.6 IT WAS TO ARRAN GE WATER AND GAS FOR ITS WORK SITE AND CAMPS/COLONIES. (IV) PROVISION AND MAINTENANCE OF ROADS: THE ASSESS EE WAS RESPONSIBLE FOR FURTHER UPGRADATION AND MAINTENANCE OF ALL INTERNAL ROADS A ND PROVISION OF ADDITIONAL ROADS AS NECESSARY WITHOUT ADDITIONAL COST TO THE GOVERNMENT . (PARA 4.1.1 ON PAGE 295). FURTHER IT WAS RESPONSIBLE FOR CONSTRUCTION AND MAINTENANCE OF ADDITIONAL ACCESS ROADS FOR THE PURPOSE OF TRANSPORTING ALL MATERIALS. (PARA 4.1.7) (V) LICENCES, PERMITS, CONSENTS ETC. THE ASSESSEE W AS RESPONSIBLE FOR OBTAINING ALL PERMITS FOR CARRYING OUT ITS OBLIGATIONS. (PARA 4.1.8 ON PA GE 295). FURTHER IT WAS TO BEAR ALL COSTS AND CHARGES FOR SPECIAL AND TEMPORARY RIGHTS-OF-WAY WHICH MAY BE REQUIRED. (PARA 4.13 ON PAGE 301) (VI) SAFETY AND SECURITY:THE ASSESSEE WAS RESPONSIB LE FOR SAFETY OF ALL ITS OPERATIONS AND METHODS OF CONSTRUCTION. FURTHER, IT WAS TO ARRANGE ADEQUATE SECURITY FOR ITS PERSONNEL (AND THEIR FAMILIES), PROPERTY, WORK-IN-PROGRESS ETC. (P ARA 4.1.2 ON PAGE 294) (VII) SUPERINTENDENCE: THE ASSESSEE WAS TO PROVIDE NECESSARY SUPERINTENDENCE THROUGHOUT THE DESIGN AND EXECUTION OF THE WORKS. (PARA 6.8 ON PAGE 310) (VIII) TESTING: THE ASSESSEE WAS TO PROVIDE ALL APP ARATUS, ASSISTANCE, ELECTRICITY, FUEL, CONSUMABLES, INSTRUMENTS, LABOUR, MATERIALS AS ARE NECESSARY TO CARRY OUT EFFICIENT TESTS OF PLANT, MATERIALS AND OTHER PARTS OF WORKS. (PARA 7. 4 ON PAGE 312) (IX) REMEDIAL WORK: DESPITE THE ABOVE, THE ASSESSEE WAS TO CARRY OUT ANY REMEDIAL WORK IF INSTRUCTED SO BY THE CONTRACTEE. (PAGE 313, PARA 7. 6) (X) ROYALTIES: THE ASSESSEE WAS TO PAY ALL ROYALTIE S, RENT~ AND OTHER PAYMENTS FOR OBTAINING AND DISPOSAL OF MATERIALS. (PAGE 314, PARA 7.8) XIII. JODHPUR PROJECT: RS. 1,20,18,807/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XII OF THE PAPER BOOK BEFORE THE LD. CIT(A). THE FOLLOWING CONDITION S LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGN: THE ASSESSEE WAS RESPONSIB LE FOR THE DESIGN OF THE WORK UNDER THE CONTRACT AND WAS ALSO RESPONSIBLE FOR ACCURACY OF T HE SAID DESIGNS. (PG. 51, PARA 9.1) THE ASSESSEE WAS TO CARRY OUT PREPARATORY WORKS SUC H AS TOPOGRAPHIC SURVEY, SOIL INVESTIGATIONS, GEO-TECHNICAL INVESTIGATIONS ETC. T O PREPARE THE PLANS, L-SECTIONS, DESIGNS, WORKING DRAWINGS ETC. IT WAS TO SUBMIT THE DETAILED DESIGN AND THE EXECUTION DRAWINGS SUCH AS SITE PLANS, GENERAL ARRANGEMENT DRAWINGS, L-SECT IONS, PLANS, ARCHITECTURAL, STRUCTURAL DRAWINGS AND ALL WORKING DRAWINGS, FOR APPROVAL. (P ARA 9.2) (II) MATERIALS: ALL THE MATERIAL REQUIRED FOR THE W ORK WAS TO BE PROVIDED BY THE ASSESSEE. I) LABOUR: THE ASSESSEE WAS REQUIRED TO EMPLOY STAF F FOR EXECUTION OF WORK. (II) PLANT:THE ASSESSEE WAS TO ARRANGE AND SUPPLY A T ITS OWN COST ALL MATERIAL, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, CORDAGE, TACKLE, S CAFFOLDING AND TEMPORARY WORKS REQUIRED FOR PROPER EXECUTION OF THE WORK. 22 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (V) COST OF INSPECTION AND TESTING: FOR ALL EQUIPMENT A ND MATERIAL REQUIRED FOR THE EXECUTION OF THE WORK, THE ARRANGEMENT FOR INSPECTI ON AND EXPENSES THERETO WAS TO BE BORNE BY THE ASSESSEE. FURTHER, THE ASSESSEE WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, ELECTRICITY, FUEL, CONSUMABLES LABOUR, MATERIALS TO CARRY OUT EFFICIENT TESTING OF EQUIPMENT, MATERIAL AND OTHER PARTS OF WORKS. (VI) WATER AND ELECTRICITY: THE COST OF ALL WATER CONNEC TIONS NECESSARY FOR THE EXECUTION OF THE WORK AND THE COST OF WATER CONSUMED AND HIRE CHARGES OF METERS AND THE COST OF ELECTRICITY CONSUMED IN CONNECTION WITH THE EXECUTI ON OF WORK WAS TO BE PAID BY THE ASSESSEE. (VII) SITE OFFICE, STAFF QUARTERS ETC.: THE ASSESSEE WAS TO HAVE AN OFFICE NEAR THE SITE AND A CLERK FOR SERVICE OF COMMUNICATION NOTICES. FURTHER, ALL THE EXPENSES IN CONNECTION WITH PURCHA SE OR CONSTRUCTION OR MAINTENANCE OF SITE OFFICE, STAFF QUARTERS WAS TO BE BORNE BY THE ASSES SEE. (VIII) ROYALTIES AND TAXES: THE ASSESSEE WAS TO PAY ALL RO YALTIES, OCTROI AND OTHER TAXES AND DUTIES IN RESPECT OF MATERIALS CONSUMED ON PUBL IC WORK. (IX) INSURANCE: THE ASSESSEE WAS TO TAKE ACCIDENT INSURA NCE AND THIRD PARTY INSURANCE. THE RESPONSIBILITY OF TIMELY PAYMENT OF PREMIUMS WA S THAT OF THE ASSESSEE. (X) QUALITY ASSURANCE SYSTEM: THE ASSESSEE WAS TO INSTI TUTE A QUALITY ASSURANCE SYSTEM TO DEMONSTRATE COMPLIANCE WITH REQUIREMENTS OF THE CONTRACT. (XI) RIGHTS OF WAY AND FACILITIES: THE ASSESSEE WAS TO B EAR ALL COSTS AND CHARGES FOR SPECIAL/TEMPORARY RIGHTS OF WAY WHICH MAY BE REQUIR ED FOR THE WORK. (XII) SECURITY OF THE SITE: THE ASSESSEE WAS TO PROVIDE A DEQUATE MANPOWER AND MEANS FOR THE SECURITY OF THE MATERIAL, WORK-IN-PROGRESS ETC. IT WAS RESPONSIBLE FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. XIV. SAWAIMADHOPUR PROJECT: RS. 3,46,96,151/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XIII OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGN: THE ASSESSEE WAS RESPONSIB LE FOR THE DESIGN OF THE WORKS AND THE ACCURACY OF SUCH DESIGNS. IT WAS REQUIRED TO CARRY OUT THE PREPARATORY WORKS SUCH AS TOPOGRAPHIC SURVEY, SOIL INVESTIGATIONS, GEOTECHNICAL INVESTIGATIONS ETC. TO PREPARE THE PLANS, L-SECTIONS, DESIGNS, WORKING DRAWINGS ETC. (II) MATERIALS: THE ASSESSEE WAS RESPONSIBLE FOR AR RANGEMENT OF ALL MATERIALS REQUIRED FOR PROPER EXECUTION OF WORK. (III) LABOUR: THE ASSESSEE WAS RESPONSIBLE FOR PAYI NG WAGES TO LABOURERS ON THE WORK. FURTHER, THE ASSESSEE WAS REQUIRED TO ENGAGE TECHNI CAL STAFF AS PER CLAUSE 39 ON PAGE 56. IT WAS EVEN REQUIRED TO HIRE SUPERVISORY STAFF LIKE CO NTRACT MANAGERS, SENIOR MANAGERS ETC. ON THE SITE SO AS TO ENSURE THE WORK QUALITY. 23 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (IV) PLANT: THE ASSESSEE WAS REQUIRED TO ARRANGE AN D SUPPLY AT ITS OWN COST, ALL PLANTS, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, CORDAGE ETC. REQUI RED FOR PROPER EXECUTION OF WORK. (V) POWER AND WATER: THE ASSESSEE WAS TO BEAR THE COST OF ALL WATER CONNECTIONS NECESSARY FOR EXECUTION OF WORK AND THE COST OF WAT ER CONSUMED. FURTHER IT WAS TO BEAR THE HIRE CHARGES OF METERS AND COST OF ELECTRICITY CONS UMED IN THE EXECUTION OF THE WORK. (VI) CONSTRUCTION ON SITE: THE ASSESSEE WAS REQUIRED TO PROVIDE AND UPKEEP THE FOLLOWING FACILITIES AN OFFICE BUILDING AT 5 LOCATIONS OF FLOOR AREA N OT LESS THAN 50 SQUARE METER EACH, WITH PROVISION OF TOILETS AND PANTRY. THE BUILDING WAS T O BE EQUIPPED WITH FURNITURE, ELECTRICITY, TELEPHONE, AIR COOLER, FAN, COMPUTER, PRINTER ETC. IN ADDITION TO ABOVE, SUITABLE TEMPORARY OFFICES ALONG THE SITE OF PIPE LAYING WORKS OFFICES WERE TO BE MAINTAINED BY THE ASSESSEE AND WERE TO BE REMOVED ON COMPLETION OF WORK. (VII) SAFETY AND SECURITY: THE ASSESSEE WAS RESPONS IBLE FOR THE SAFETY OF ALL PERSONS ON THE SITE. IT WAS TO PROVIDE NECESSARY FENCING, LIGHTING , GUARDING AND WATCHING OF THE WORKS UNTIL COMPLETION. IT WAS FURTHER RESPONSIBLE FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE, OFFICES, CAMPUS ETC. (VIII) COST OF INSPECTION AND TESTING: FOR ALL EQUI PMENTS AND MATERIALS REQUIRED FOR EXECUTION OF THE WORK, THE ARRANGEMENT FOR INSPECTION AND EXP ENSES THERETO WAS TO BE BORNE BY THE ASSESSEE. FURTHER, THE ASSESSEE WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, DOCUMENTS AND OTHER INFORMATION, ELECTRICITY, EQUIPMENT, FUEL, CONSUMAB LES, ESTIMATES, LABOUR, MATERIALS, AND SUITABLY QUALIFIED AND EXPERIENCED STAFF NECESSARY TO CARRY OUT THE TESTS EFFICIENTLY. (IX) OTHERS: THE ASSESSEE WAS TO INSTITUTE A QUALITY ASSURANCE SYSTEM TO DEMONSTRATE COMPLIANCE WITH REQUIREMENTS OF THE CONTRACT. THE ASSESSEE WAS TO BEAR ALL COSTS AND CHARGES FO R SPECIAL AND/OR TEMPORARY RIGHTS OF WAY, WHICH HE MAY REQUIRE, INCLUDING THOSE FOR ACCESS TO THE SITE ROYALTIES, QUARRY FEES, OCTROI AND OTHER TAXES IN RESPECT OF MATERIALS ACTUALLY CONSUMED ON PUBLIC WORK WAS TO BE BORNE BY THE ASSESSEE XV. BENIHALA LIS PROJECT: RS. 54,45,962/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XIV OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DESIGN AND DRAWINGS: THE ASSESSEE WAS RESPONSIB LE FOR DRAWINGS AND DESIGNS FOR TEMPORARY WORKS. (II) MATERIAL: THE ASSESSEE WAS RESPONSIBLE FOR PRO CUREMENT OF REQUIRED QUANTITY OF MATERIALS LIKE PIPES, SPECIALS, MACHINERY, ELECTRIC AL ITEMS ETC 24 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (III) LABOUR:THE ASSESSEE WAS RESPONSIBLE FOR THE E NGAGEMENT OF ALL STAFF AND LABOUR AND ALSO FOR THEIR PAYMENT, HOUSING, FEEDING AND TRANSP ORT. THE ASSESSEE WAS TO TAKE ADEQUATE MEASURES TO ENSUR E THEIR SAFETY. THE ASSESSEE WAS RESPONSIBLE FOR AND WAS TO BEAR ALL EXPENSES OF PRO VIDING MEDICAL AID TO WORKMEN ON THE SITE. FURTHER IT WAS TO PROVIDE ALL NECESSARY PERSO NAL SAFETY EQUIPMENT, FIRST AID APPARATUS FOR THE USE OF PERSONS EMPLOYED ON THE SITE (IV) PLANT: ALL TOOLS AND PLANTS REQUIRED FOR THE W ORK INCLUDING SHEET PILES AND TIMBER FOR SHORING AND STRUTTING, PUMP SETS ETC. WAS TO BE SUP PLIED BY THE ASSESSEE AT ITS OWN COST (V) WATER AND ELECTRICITY: THE ASSESSEE WAS TO MAKE ITS OWN ARRANGEMENT FOR THE FRESH WATER REQUIRED FOR MANUFACTURING OF THE PIPES, CONSTRUCTI ON OF CIVIL WORKS AND TESTING OF PIPELINES AS WELL AS POTABLE WATER REQUIRED FOR HIS FACTORY A ND LABOUR CAMPS. FURTHER HE WAS TO MAKE ITS ARRANGEMENTS FOR THE ELE CTRICAL ENERGY REQUIRED AT THE SITE. (VI) SURVEY STATIONS: THE ASSESSEE WAS TO, AT HIS O WN EXPENSE, PROVIDE AND MAINTAIN SURVEY STATIONS REQUIRED TO CARRY OUT SURVEYS, MEASUREMENT S ETC. IN CONNECTION WITH WORKS (VII) OTHER INFRASTRUCTURAL FACILITIES: THE ASSESSEE WAS TO ERECT AND MAINTAIN IN A GOOD CONDITION TEMPORARY FENCES AND GATES ALONG THE BOUNDARIES. PROVISION OF SEPTIC TANK/PIT LATRINES AT THE CONS TRUCTION SITE/CAMPS PROVISION OF CRECHES FOR WORKING WOMEN LABOUR DRINKING WATER PROVISION AND MAINTENANCE OF CLEAN SANITARY FACIL ITIES ON THE SITE FOR USE OF ITS EMPLOYEES. WATCHING AND LIGHTING (PAGE 61, PARA 15) (VIII) ROYALTY ETC.: ALL QUARRY FEES, ROYALTIES AND OCTROI DUES LEVIED BY THE STATE GOVERNMENT OR ANY LOCAL BODY OR AUTHORITY AND GROUND RENT WAS TO BE PAID BY THE ASSESSEE. (IX) TEMPORARY DIVERSION OF ROADS: THE ASSESSEE WAS TO MAKE AT ITS OWN COST ALL NECESSARY PROVISION FOR THE TEMPORARY DIVERSION OF ROADS, CAR T-TRACKS, FOOTPATHS, DRAINS, WATER COURSES, CHANNELS ETC. IT WAS TO PAY CUSTOMARY VEHICLE LICENSE AND PERMIT FEES FOR USE OF PUBLIC ROADS. FROM THE PERUSAL OF THE TERMS AND CONDITIONS OF ALL THE AGREEMENTS (ABOVE), IT IS CLEAR THAT IT IS NOT A CASE WHERE THE ASSESSEE WAS PROVIDED WITH THE ESTABLISHMENT AND MATERIALS REQUIRED TO EXECUTE THE WORK, WHICH HAPPENS IN CASE OF WORKS CONTRACT WHERE THE CONTRACTOR GETS THE MATERIAL AND OTHER REQUISITES FROM THE CLIENT AND A LL HE HAS TO DO IS EMPLOY LABOUR. THE ASSESSEE IN THE GIVEN CASE WAS TO PROCURE RAW MATER IAL, MAKE ARRANGEMENTS FOR POWER, WATER, PLANT MACHINERY ETC., AND CONDUCT ALL THE OT HER ACTIVITIES NEEDED FOR CONSTRUCTION. IN ADDITION TO THE ABOVE, THE ASSESSEE WAS EVEN RES PONSIBLE FOR OPERATIONS AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY, IN THE FOLLOWING CA SES: SONTHI PROJECT (ANNEXURE 1)- SCOPE OF WORK ON PAG E 12 INCLUDES OPERATING THE SYSTEM FOR 2 YEARS. 25 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. TARAKA LIS (ANNEXURE 11): AS PER PARA 6.2.13 ON P AGE 185, THE ASSESSEE WAS REQUIRED TO MAINTAIN THE FACILITY FOR A PERIOD OF 12 MONTHS. IT S LIABILITY WAS LIMITED TO REPLACEMENT OF DEFECTIVE PARTS THAT MAY DEVELOP IN THE EQUIPMENT F ROM FAULTY DESIGN, MATERIALS OR WORKMANSHIP. BANNAHALLIHUNDI LIS: SCHEDULE B, SHOWING ITEMS OF WORK TO BE CARRIED OUT, INCLUDES OPERATION & MAINTENANCE FOR 3 YEARS. HONGANUR LIS: AS PER PARA 6.2.13 ON PAGE 185, THE ASSESSEE WAS REQUIRED TO MAINTAIN THE FACILITY FOR A PERIOD OF 12 MONTHS. ITS LIABILITY W AS LIMITED TO REPLACEMENT OF DEFECTIVE PARTS THAT MAY DEVELOP IN THE EQUIPMENT FROM FAULTY DESIG N, MATERIALS OR WORKMANSHIP. URBANI LIS (ANNEXURE V): AS PER PARA 21 ON PAGE 1 35, THE ASSESSEE WAS RESPONSIBLE FOR PROPER OPERATION OF THE INSTALLATIONS DURING 2 YEAR S MAINTENANCE PERIOD. RAMESHWARA LIS (ANNEXURE VI): AS PER PARA 20 ON P AGE 147, THE ASSESSEE WAS RESPONSIBLE FOR PROPER OPERATION OF THE INSTALLATIONS DURING 2 YEARS MAINTENANCE PERIOD. SINGATALUR LIS (ANNEXURE VII): SCOPE OF WORK ON P AGE 8 INCLUDES OPERATING THE SYSTEM FOR 2 YEARS. RAMGANJMANDI (ANNEXURE VIII): SCOPE OF WORK ON PA GE LA INCLUDES OPERATING AND MAINTENANCE PERIOD OF FIVE YEARS. KERALA PUTTUVAM AND MEENAD PROJECTS SRIPADSAGAR PROJECT (ANNEXURE XI): SCOPE OF WORK INCLUDES OPERATION AND MAINTENANCE OF THE PROJECT FOR 2 YEARS JODHPUR PROJECT (ANNEXURE XII): THE PROJECT HAD A N OPERATION AND MAINTENANCE PERIOD OF 5 YEARS. SAWAIMADHOPUR PROJECT (ANNEXURE XIII):PARTICULARS OF WORK ON PAGE 6 INCLUDES MAINTENANCE & OPERATION FOR 5 YEARS. BENIHALA LIS (ANNEXURE XIV): AS PER PARA 21 ON PA GE 125, THE ASSESSEE WAS RESPONSIBLE FOR PROPER OPERATION OF THE INSTALLATIONS DURING 2 YEARS MAINTENANCE PERIOD. ASST YEAR 2008-09 (ITA NO. 2288/KOL/2013 ) SONTHI PROJECT: RS. 1,25,31,427/- THE FOLLOWING CONDITIONS IN THE AGREEMENT BETWEEN T HE ASSESSEE AND KRISHNA BHAGYA JALA NIGAM LIMITED CLEARLY ESTABLISH THAT THE ASSESSEE W AS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGNS OF TEMPORARY WORKS: THE AS SESSEE WAS RESPONSIBLE FOR THE DRAWING AND DESIGN OF TEMPORARY WORKS. IT WAS REQUIRED TO S UBMIT THE SAID DRAWINGS TO THE ENGINEERS AND OBTAIN HIS APPROVAL BEFORE STARTING SUCH WORK (II) MATERIALS REQUIRED FOR THE PROJECT: THE CONTRA CTOR WAS RESPONSIBLE FOR PROCUREMENT OF REQUIRED QUANTITY OF PIPES, SPECIAL MACHINERY, ELEC TRICAL ITEMS ETC. (III) LABOUR: THE CONTRACTOR WAS REQUIRED TO MAKE I TS OWN ARRANGEMENT FOR THE 26 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. ENGAGEMENT OF ALL STAFF AND LABOUR, FOR THEIR PAYME NT, HOUSING, FEEDING AND TRANSPORT. FURTHER HE WAS TO TAKE ADEQUATE PROVISIONS FOR THE SAFETY OF THE WORKMEN AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE EMPLOYEES (IV) PLANT: ALL TOOLS AND PLANTS REQUIRED FOR THE W ORK WAS TO BE SUPPLIED BY THE CONTRACTOR AT ITS OWN COST. (V) POWER & WATER: THE CONTRACTOR WAS REQUIRED TO M AKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITE AND MAKE ITS OWN ARRANGEMENT OF WA TER. (VI) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED T O PROVIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED TO CONDUCT ALL THE NECESSARY SURVEYS. (VII) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIRE D, AT HIS OWN EXPENSE, TO ERECT AND MAINTAIN TEMPORARY FENCES AND GATES ALONG THE BOUND ARIES. (VIII) ROYALTY: THE CONTRACTOR WAS TO PAY ALL FEES, ROYALTIES, OCTROI DUES LEVIED BY THE STATE GOVERNMENT OR ANY OTHER LOCAL II. TARAKA LIFT IRRIGATION SCHEME: RS. 1,60,662/- THE AGREEMENT BETWEEN THE ASSESSEE AND CAUVERY NEER AVARI NIGAM LTD. FOR THE AFORESAID PROJECT IS ENCLOSED AS ANNEXURE II. THE FOLLOWING C ONDITIONS IN THE AGREEMENT BETWEEN THE ASSESSEE AND CAUVERY NEERAVARI NIGAM LTD. CLEARLY E STABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL: THE RESPONSIBILITY OF PROCURING SAFE STORAGE AND SAFE TRANSPORTATION AND USAGE OF ALL MATERIALS INCLUDING CEMENT, STEEL, EXPLOSIVE S (AND LICENSE THEREOF) WAS THAT OF THE ASSESSEE. (II) LABOUR: IN ADDITION TO LABOUR, THE ASSESSEE WA S REQUIRED TO HIRE TECHNICAL STAFF AT HIS COST. FURTHER, IT WAS REQUIRED TO PROVIDE THE FOLLO WING LABOUR AMENITIES: IT WAS REQUIRED TO PROVIDE MEDICAL AID TO WORKMEN . IT WAS REQUIRED TO PROVIDE ALL THE SAFETY EQUIPME NT AND FIRST AID APPARATUS FOR USE OF THE PERSONS EMPLOYED ON SITE LABOUR CAMPS AND ARRANGEMENT OF WATER AND POWER F OR THE SAME REST SHED, CRECHES AND DRINKING WATER ARRANGEMENT S ON THE WORK SPOT FURTHER, THE LAND REQUIRED FOR QUARTERS ON WORK S POT WAS TO BE ARRANGED BY THE CONTRACTOR. (III) OFFICE ETC. ON SITE: THE RESPONSIBILITY FOR C ONSTRUCTING A SITE OFFICE WAS THAT OF THE CONTACTOR (IV) PLANT: THE ASSESSEE WAS REQUIRED TO SUPPLY AT HIS OWN COST, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, ETC. REQUIRED FOR PROPER EXECU TION OF THE WORK. (V) NECESSARY FENCING AND LIGHTS: THE ASSESSEE WAS TO PROVIDE ALL THE NECESSARY FENCING AND LIGHTS REQUIRED TO PROTECT THE PUBLIC FROM ACCIDENT . 27 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (VI) QUARRY FEES, ROYALTY ETC. : ALL THE QUARRY FEE S, ROYALTIES, OCTROI, DUES LEVIED BY THE STATE GOVERNMENT WAS TO BE PAID BY THE CONTRACTOR. (VII) POWER AND WATER: THE POWER AND WATER REQUIRED FOR H IS CAMPS AS WELL AS THE WORK WAS TO BE ARRANGED BY THE ASSESSEE. (VIII) CLEARING THE SITE: THE AREA TO BE OCCUPIED FOR WORK WAS TO BE CLEARED OFF ALL VEGETATIONS BY THE ASSESSEE, FOR WHICH IT WAS NOT E NTITLED TO ANY EXTRA PAYMENT. (IX) ACCESS ROADS: ALL HAULAGE ROADS, ACCESS ROADS TO WORK SPOTS, QUARRY ROADS ETC. AND ALL DIVERSION ROADS FOUND NECESSARY DURING CONSTRUCTION WAS TO BE FORMED AND MAINTAINED BY THE ASSESSEE III. MADHEPURA PROJECT: RS. 77,18,533/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE III OF TILE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL: THE ASSESSEE WAS REQUIRED TO PROCURE CEMENT, STEEL, BITUMEN ETC. NEEDED FOR EXECUTION OF THE WORK (II) LABOUR: THE ASSESSEE WAS TO EMPLOY TECHNICAL S TAFF AND PROVIDE ALL THE NECESSARY SUPERINTENDENCE DURING THE EXECUTION OF THE WORK. (III) SITE OFFICE: THE ASSESSEE WAS TO CONSTRUCT AN D PROVIDE A SITE OFFICE FOR THE CONTRACTEE WITH THE FOLLOWING AMENITIES SANITARY, WATER SUPPLY INSTALLATIONS AND FITTINGS WATCH & WARD ELECTRICAL AND WATER CONNECTION WASTE DISPOSAL FURNITURE AND OFFICE EQUIPMENT (IV) FIELD LABORATORY: THE ASSESSEE WAS TO ARRANGE AND PROVIDE AN ADEQUATELY EQUIPPED LABORATORY WITH THE NECESSARY MANPOWER. FURTHER IT WAS REQUIRED TO MAINTAIN THE SAME IV. USMANPUR PROJECT: RS. 61,865/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE IV OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DESIGN OBLIGATIONS: THE ASSESSEE WAS TO CARRY O UT AND BE RESPONSIBLE FOR THE DESIGN OF THE WORK. (II) STAFF & LABOUR: THE ASSESSEE WAS TO MAKE ITS O WN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, LOCAL OR OTHERWISE, AND FOR THEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. 28 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. IT WAS TO PROVIDE AND MAINTAIN ALL NECESSARY ACCOMM ODATION AND WELFARE FACILITIES FOR ITS PERSONNEL. FURTHER IT WAS TO TAKE ALL REASONABLE PR ECAUTIONS TO MAINTAIN HEALTH AND SAFETY OF ITS PERSONNEL. IT WAS TO PROVIDE THE' NECESSARY SUPERINTENDENCE TO PLAN, ARRANGE, DIRECT, MANAGE, INSPECT AND TEST THE WORK. (III) PLANT & MATERIALS: THE ASSESSEE WAS TO CARRY OUT THE MANUFACTURE OF PLANT, THE PRODUCTION OF MATERIALS REQUIRED FOR THE WORK. (IV) ELECTRICITY: THE ASSESSEE WAS TO ARRANGE THE E LECTRICITY/POWER CONNECTION OF REQUIRED CAPACITY FOR CARRYING OUT THE WORKS. FURTHER IT WAS TO MAKE NECESSARY ARRANGEMENTS FOR DIESEL GENERATORS SO THAT THE PROGRESS OF AWARDED C ONTRACT IS NOT ADVERSELY AFFECTED DUE TO FAILURE/NON-AVAILABILITY OF ELECTRICITY/POWER. (V) SITE OFFICE: THE ASSESSEE WAS TO PROVIDE A SITE OFFICE WITH ALL THE NECESSARY FURNITURE, 'TELEPHONE FACILITY, DISPLAY BOARDS ETC. FOR USE BY THE ENGINEER AND THE SUPERVISORY STAFF (VI) SAFETY & SECURITY: THE ASSESSEE WAS TO TAKE CA RE OF THE SAFETY OF ALL PERSONS ENTITLED TO BE ON THE SITE. IT WAS TO PROVIDE NECESSARY FENCING, L IGHTING, GUARDING AND WATCHING OF THE WORKS UNTIL COMPLETION THE ASSESSEE WAS EVEN RESPONSIBLE FOR THE SECURITY OF SITE AND FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. (VII) RIGHTS OF WAY: THE ASSESSEE WAS TO BEAR ALL C OSTS AND CHARGES FOR SPECIAL AND/OR TEMPORARY RIGHTS-OF-WAY WHICH MAY BE REQUIRED FOR A CCESS TO THE SITE (VIII) TESTING: IT WAS TO PROVIDE ALL APPARATUS, AS SISTANCE, DOCUMENTS AND OTHER INFORMATION, ELECTRICITY, EQUIPMENT, FUEL, CONSUMABLES, INSTRUME NTS, LABOUR, MATERIALS, AND SUITABLY QUALIFIED AND EXPERIENCED STAFF NECESSARY TO CARRY OUT THE TESTS EFFICIENTLY V. WAZIRABAD PROJECTS: RS. 6,90,243/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE I OF PAPER BOOK FOR AY 2009-10, SUBMITTED BEFORE THE LD. CIT(A). THE FO LLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DESIGN OBLIGATIONS: THE ASSESSEE WAS TO CARRY OUT A ND BE RESPONSIBLE FOR THE DESIGN OF THE WORK. (II) STAFF & LABOUR: THE ASSESSEE WAS TO MAKE ITS OWN A RRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, LOCAL OR OTHERWISE, AND FO R THEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. IT WAS TO PROVIDE AND MAINTAIN ALL NECESSARY ACCOMM ODATION AND WELFARE FACILITIES FOR ITS PERSONNEL. FURTHER IT WAS TO TAKE ALL REASONABLE PR ECAUTIONS TO MAINTAIN HEALTH AND SAFETY OF ITS PERSONNEL. IT WAS TO PROVIDE THE NECESSARY SUPERINTENDENCE TO PLAN, ARRANGE, DIRECT, MANAGE, INSPECT AND TEST THE WORK. (III) PLANT & MATERIALS: THE ASSESSEE WAS TO CARRY OUT THE MANUFACTURE OF PLANT, THE PRODUCTION OF MATERIALS REQUIRED FOR THE WORK. 29 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (IV) ELECTRICITY AND WATER: FOR CONSTRUCTION PURPOS ES AND FOR SITE OFFICE, THE ASSESSEE WAS TO ARRANGE AND PROVIDE AT ITS OWN COST ELECTRIC CONNEC TION OF SUITABLE LOAD FROM ELECTRIC SUPPLY AGENCY AND WAS ALSO TO KEEP GENERATORS AS STANDBY A RRANGEMENT. THE WATER REQUIRED FOR CONSTRUCTION WAS TO BE ARRAN GED BY THE ASSESSEE AT ITS OWN COST. (V) SITE OFFICE: THE ASSESSEE WAS TO PROVIDE A SITE OFFICE WITH AC CABINS, MEETING ROOM WITH PANTRY AND TOILET FACILITIES. IN ADDITION TO THE ABOVE, IT WAS TO BEAR RUNNING EX PENSES OF THE SITE OFFICE AND WAS TO PROVIDE FOUR WHEEL DRIVE AC VEHICLE WITH DRIVER. (VI) SAFETY & SECURITY: THE ASSESSEE WAS TO TAKE CARE OF THE SAFETY OF ALL PERSONS ENTITLED TO BE ON THE SITE. IT WAS TO PROVIDE NECESSARY FENC ING, LIGHTING, GUARDING AND WATCHING OF THE WORKS UNTIL COMPLETION THE ASSESSEE WAS EVEN RESPON SIBLE FOR THE SECURITY OF SITE AND FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. (VII) RIGHTS OF WAY: THE ASSESSEE WAS TO BEAR ALL C OSTS AND CHARGES FOR SPECIAL AND/OR TEMPORARY RIGHTS-OF-WAY WHICH MAY BE REQUIRED FOR A CCESS TO THE SITE (VIII) INSPECTON & TESTING: THE ASSESSEE WAS TO MAK E ALL NECESSARY ARRANGEMENTS FOR TO AND FRO TRAVELS OF ENGINEERS FOR PRE-DELIVERY INSPECTIO N IN INDIA AND ABROAD. IT WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, DOCUME NTS AND OTHER INFORMATION, ELECTRICITY, EQUIPMENT, FUEL, CONSUMABLES, INSTRUMENTS, LABOUR, MATERIALS, AND SUITABLY QUALIFIED AND EXPERIENCED STAFF NECESSARY TO CARRY OUT THE TESTS EFFICIENTLY. VI. GWALIOR PROJECTS: RS. 86,49,856/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE V OF PAPER BOOK FOR AY 2009-10, SUBMITTED BEFORE THE LD. CIT(A). THE FO LLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIALS & EQUIPMENT: SEE BILLS OF QUANTITIES ENCLOSED IN THE ANNEXURE. (II) LABOUR: THE ASSESSEE WAS PAY WAGES TO LABOURER S ENGAGED BY IT IN THE EXECUTION OF THE WORK. IN ADDITION IT WAS TO PROVIDE AND MAINTAIN, A T ITS OWN EXPENSE, IN A CLEAN AND SANITARY CONDITION, LIVING ACCOMMODATIONS FOR THOSE EMPLOYED BY IT ON THE PROJECT. FURTHER IT WAS TO PROVIDE THE FOLLOWING: SAFETY AND ACCIDENT PREVENTION OFFICER PROTECTIVE CLOTHING AND FOOTWEAR FIRST AID FACILITIES SUPPLY OF DRINKING WATER AND SANITATION (I) POWER: THE ASSESSEE WAS TO MAKE ITS OWN ARRANGE MENT OF POWER SUPPLY FOR THE LABOUR CAMP AND FOR THE WORK SITE. 30 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (II) WATER: THE ASSESSEE WAS TO MAKE ITS OWN ARRANG EMENT FOR WATER REQUIRED FOR CONSTRUCTION AND OTHER PURPOSES. (III) SITE OFFICE: THE ASSESSEE WAS TO ESTABLISH A TEMPOR ARY OFFICE. THE OFFICE WAS TO INCLUDE TABLES, CHAIRS, ALMIRAH ETC. (IV) FIELD LABORATORY: THE ASSESSEE WAS TO ARRANGE AND P ROVIDE A FULLY FURNISHED AND ADEQUATELY EQUIPPED LABORATORY. FURTHER IT WAS REQU IRED TO MAINTAIN THE SAME. VII. HONGANUR LIFT IRRIGATION SCHEME: RS. 4,55,033/ - THE AGREEMENT BETWEEN THE ASSESSEE AND CAUVERY NEER AVARI IGAM LTD. FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE VIII OF PAPER BOOK FOR AY 2009-10, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTR ACTOR: (I) MATERIAL: THE RESPONSIBILITY OF PROCURING SAFE STOR AGE AND SAFE TRANSPORTATION AND USAGE OF ALL MATERIALS INCLUDING CEMENT, STEEL, EXP LOSIVES (AND LICENSE THEREOF) WAS THAT OF THE ASSESSEE. (II) LABOUR: IN ADDITION TO LABOUR, THE ASSESSEE WA S REQUIRED TO HIRE TECHNICAL STAFF AT HIS COST. FURTHER, IT WAS REQUIRED TO PROVIDE THE FOLLO WING LABOUR AMENITIES: IT WAS REQUIRED TO PROVIDE MEDICAL AID TO WORKMEN . (CLAUSE 30 ON PAGE 53). IT WAS REQUIRED TO PROVIDE ALL THE SAFETY EQUIPME NT AND FIRST AID APPARATUS FOR USE OF THE PERSONS EMPLOYED ON SITE. LABOUR CAMPS AND ARRANGEMENT OF WATER AND POWER F OR THE SAME REST SHED, CRECHES AND DRINKING WATER ARRANGEMENT S ON THE WORK SPOT FURTHER, THE LAND REQUIRED FOR QUARTERS ON WORK S POT WAS TO BE ARRANGED BY THE CONTRACTOR. (V) NECESSARY FENCING AND LIGHTS: THE ASSESSEE WAS TO PROVIDE ALL THE NECESSARY FENCING AND LIGHTS REQUIRED TO PROTECT THE PUBLIC FROM ACCIDENT . (III) OFFICE ETC. ON SITE: THE RESPONSIBILITY FOR C ONSTRUCTING A SITE OFFICE WAS THAT OF THE CONTACTOR (IV) PLANT: THE ASSESSEE WAS REQUIRED TO SUPPLY AT HIS OWN COST, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, ETC. REQUIRED FOR PROPER EXECU TION OF THE WORK. (V) POWER AND WATER: THE POWER AND WATER REQUIRED FOR H IS CAMPS AS WELL AS THE WORK WAS TO BE ARRANGED BY THE ASSESSEE. VI) CLEARING THE SITE: THE AREA TO BE OCCUPIED FOR WOR K WAS TO BE CLEARED OFF ALL VEGETATIONS BY THE ASSESSEE, FOR WHICH IT WAS NOT E NTITLED TO ANY EXTRA PAYMENT. (VIII) ACCESS ROADS: ALL HAULAGE ROADS, ACCESS ROAD S TO WORK SPOTS, QUARRY ROADS ETC. AND ALL DIVERSION ROADS FOUND NECESSARY DURING CONSTRUCTION WAS TO BE FORMED AND MAINTAINED BY THE ASSESSEE VIII. BANNAHALLI HUNDI LIFT IRRIGATION SCHEME: RS. 30,81,722/- 31 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. THE AGREEMENT BETWEEN THE ASSESSEE AND CAUVERY NEER AVARI NIGAM LTD. FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE IX OF PAPER B OOK FOR AY 2009-10, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTR ACTOR: (I) MATERIAL: THE CONTRACTOR WAS RESPONSIBLE TO ARR ANGE AT HIS OWN EXPENSE ALL THE MATERIAL REQUIRED FOR WORK (WITH THE EXCEPTION OF SOME SPECI AL MATERIALS) (II) LABOUR: IN ADDITION TO LABOUR, THE ASSESSEE WA S REQUIRED TO HIRE TECHNICAL STAFF AT HIS COST. IT WAS REQUIRED TO PROVIDE MEDICAL AID TO WOR KMEN. FURTHER, IT WAS REQUIRED TO PROVIDE ALL THE SAFETY EQUIPMENT AND FIRST AID APPARATUS FO R USE OF THE PERSONS EMPLOYED ON SITE. (III) PLANT: THE ASSESSEE WAS REQUIRED TO SUPPLY AT HIS OWN COST, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, ETC. REQUIRED FOR PROPER EXECU TION OF THE WORK. (IV) NECESSARY FENCING AND LIGHTS: THE ASSESSEE WAS TO PROVIDE ALL THE NECESSARY FENCING AND LIGHTS REQUIRED TO PROTECT THE PUBLIC FROM ACCIDENT (V) QUARRY FEES, ROYALTY ETC. : ALL THE QUARRY FEES , ROYALTIES, OCTROI, DUES LEVIED BY THE STATE GOVERNMENT WAS TO BE PAID BY THE CONTRACTOR. IX. KERALA PUTTUVAM PROJECT: RS. 3,25,19,848/- & KE RALA MEENAD PROJECT: 5,63,07,469/- THE AGREEMENT BETWEEN THE ASSESSEE AND KERALA WATER AUTHORITY, FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE XI OF PAPER BOOK FOR AY 2009-10, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGRE EMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) ATTENTION IS FIRSTLY INVITED TO CLAUSE 8 (PAGE 6) (GENERAL OBLIGATIONS) OF THE AGREEMENT EXTRACTS OF WHICH HAS BEEN PRODUCED BELOW: '8.1 THE CONTRACTOR SHALL, WITH DUE CARE AND DILIGE NCE, DESIGN (TO THE EXTENT PROVIDED FOR BY THE CONTRACT), EXECUTE AND COMPLETE THE WORKS AND R EMEDY ANY DEFECTS THEREIN IN ACCORDANCE WITH THE PROVISIONS OF THE CONTRACT. THE CONTRACTOR SHALL PROVIDE ALL SUPERINTENDENCE, LABOUR, MATERIALS, PLANT, CONTRACTOR'S EQUIPMENT AN D ALL THE OTHER THINGS, WHETHER OF A TEMPORARY OR PERMANENT NATURE, REQUIRED IN AND FOR SUCH DESIGN, EXECUTION, COMPLETION AND REMEDYING OF ANY DEFECTS, SO FAR AS THE NECESSITY F OR PROVIDING THE SAME IS SPECIFIED IN OR IS REASONABLY TO BE INFERRED FROM THE CONTRACT' FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE WAS NO T MERELY PROVIDING LABOUR UNDER THE CONTRACT. IN ADDITION TO LABOUR IT WAS REQUIRED TO MAKE ALL ARRANGEMENTS INCLUDING MATERIALS, EQUIPMENT, SUPERINTENDENCE AND ANY OTHER THING REQU IRED FOR COMPLETION OF THE WORK. (II) SUBMISSION OF PROGRAMME AND ESTIMATION OF CASH FLOWS: UNDER CLAUSE 14.1 THE ASSESSEE WAS REQUIRED TO SUBMIT A DETAILED PROGRAMME FOR THE EXECUTION OF THE WORKS. FURTHER, UNDER CLAUSE 14.3, IT WAS REQUIRED TO PROVIDE THE ENGINEE R A DETAILED CASH FLOW ESTIMATE IN QUARTERLY PERIODS. AS PER CLAUSE 14.4, SUBMISSION O F THE PROGRAMME AND ITS APPROVAL BY THE ENGINEER, DID NOT RELIEVE THE ASSESSEE OF ITS DUTIE S AND RESPONSIBILITIES . (III) SUPERINTENDENCE: THE ASSESSEE WAS TO PROVIDE ALL NECESSARY SUPERINTENDENCE DURING THE EXECUTION OF WORKS. 32 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (IV) LABOUR: UNDER CLAUSE 34.1 (PAGE 15), THE ASSES SEE WAS REQUIRED TO MAKE HIS OWN ARRANGEMENTS FOR THE ENGAGEMENT OF ALL STAFF AND LA BOUR, LOCAL OR OTHER, AND FOR THEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. (V) TESTING OF MATERIALS AND PLANT: IN ADDITION TO PROVISION OF SPECIFIED PLANT AND MATERIAL, THE ASSESSEE WAS REQUIRED TO PROVIDE ASSISTANCE, LA BOUR, ELECTRICITY, FUELS, STORES, APPARATUS AND INSTRUMENTS AS ARE NONNALL REQUIRED FOR EXAMINI NG, MEASURING AND TESTING ANY MATERIALS OR PLANTS. THE COST OF MAKING THE TEST WAS TO BE BO RNE BY THE ASSESSEE (VI) SAFETY, SECURITY AND PROTECTION OF THE ENVIRON MENT: UNDER CLAUSE 19 .1 (B) (PAGE 9) THE ASSESSEE WAS REQUIRED TO PROVIDE AND MAINTAIN AT HI S OWN COST ALL LIGHTS, GUARDS, FENCING, WARNING SIGNS AND WATCHING, WHEN OR WHERE NECESSARY . FURTHER UNDER PARA (C), IT WAS TO TAKE ALL THE STEPS TO PROTECT THE ENVIRONMENT. (VII) ROYALTY: THE ASSESSEE WAS REQUIRED TO PAY ALL TONNAGE AND OTHER ROYALTIES, RENT AND OTHER PAYMENTS OR COMPENSATION, IF ANY, FOR GETTING STONE, SAND, GRAVEL, CLAY OR OTHER MATERIALS REQUIRED FOR THE WORK (I) IMPROVEMENT OF ROADS ETC.: UNDER CLAUSE 30.2 (P AGE 14), THE ASSESSEE WAS RESPONSIBLE FOR PAYING THE COST OF STRENGTHENING ANY BRIDGES OR IMP ROVING ANY ROAD COMMUNICATING WITH OR ON THE ROUTES TO THE SITE TO FACILITATE THE MOVEMEN T OF EQUIPMENT AND OTHER TEMPORARY WORKS. X. JAMUI PROJECTS: RS. 91,61,240/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XII OF PAPER BOOK FOR AY 2009-10, SUBMITTED BEFORE THE LD. CIT(A). TH E FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL: THE ASSESSEE WAS REQUIRED TO PROCURE CEMENT, STEEL, BITUMEN ETC. NEEDED FOR EXECUTION OF THE WORK (II) LABOUR: THE ASSESSEE WAS TO EMPLOY TECHNICAL S TAFF AND PROVIDE ALL THE NECESSARY SUPERINTENDENCE DURING THE EXECUTION OF THE WORK (III) SITE OFFICE: THE ASSESSEE WAS TO CONSTRUCT AN D PROVIDE A SITE OFFICE FOR THE CONTRACTEE WITH THE FOLLOWING AMENITIES SANITARY, WATER SUPPLY INSTALLATIONS AND FITTINGS WATCH & WARD ELECTRICAL AND WATER CONNECTION WASTE DISPOSAL FURNITURE AND OFFICE EQUIPMENT (IV) FIELD LABORATORY: THE ASSESSEE WAS TO ARRANGE AND PROVIDE AN ADEQUATELY EQUIPPED LABORATORY WITH THE NECESSARY MANPOWER. FURTHER IT WAS REQUIRED TO MAINTAIN THE SAME. XI. JAWAI PALI PROJECT: RS. 7,13,53,353/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XLII OF PAPER BOOK FOR AY 2009-10, SUBMITTED BEFORE THE LD. CIT(A). TH E FOLLOWING CONDITIONS LISTED IN THE 33 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGN: THE ASSESSEE WAS RESPONSIB LE FOR THE DESIGN OF THE WORK UNDER THE CONTRACT AND WAS ALSO RESPONSIBLE FOR ACCURACY OF T HE SAID DESIGNS. THE ASSESSEE WAS TO CARRY OUT PREPARATORY WORKS SUC H AS TOPOGRAPHIC SURVEY, SOIL INVESTIGATIONS, GEO-TECHNICAL INVESTIGATIONS ETC. T O PREPARE THE PLANS, L-SECTIONS, DESIGNS, WORKING DRAWINGS ETC. IT WAS TO SUBMIT THE DETAILED DESIGN AND THE EXECUTION DRAWINGS SUCH AS SITE PLANS, GENERAL ARRANGEMENT DRAWINGS, L-SECT IONS, PLANS, ARCHITECTURAL, STRUCTURAL DRAWINGS AND ALL WORKING DRAWINGS, FOR APPROVAL. (II) MATERIALS: ALL THE MATERIAL REQUIRED FOR THE W ORK WAS TO BE PROVIDED BY THE ASSESSEE. (III) LABOUR: THE ASSESSEE WAS TO PAY WAGES TO ITS LABOUR. IN ADDITION IT WAS TO HIRE SUPERVISORY STAFFLIKE PROJECT MANGER AND SENIOR ENG INEER. (IV) PLANT: THE ASSESSEE WAS TO ARRANGE AND SUPPLY AT ITS OWN COST ALL MATERIAL, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, CORDAGE, TACKLE, S CAFFOLDING AND TEMPORARY WORKS REQUIRED FOR PROPER EXECUTION OF THE WORK. (V) COST OF INSPECTION AND TESTING: FOR ALL EQUIPME NT AND MATERIAL REQUIRED FOR THE EXECUTION OF THE WORK, THE ARRANGEMENT FOR INSPECTION AND EXP ENSES THERETO WAS TO BE BORNE BY THE ASSESSEE. FURTHER, THE ASSESSEE WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, ELECTRICITY, FUEL, CONSUMABLES LABOUR, MATERIALS TO CARRY OUT EFFICIENT TESTING OF EQUIPMENT, MATERIAL AND OTHER PARTS OF WORKS. (VI) WATER AND ELECTRICITY: THE COST OF ALL WATER C ONNECTIONS NECESSARY FOR THE EXECUTION OF THE WORK AND THE COST OF WATER CONSUMED AND HIRE CH ARGES OF METERS AND THE COST OF ELECTRICITY CONSUMED IN CONNECTION WITH THE EXECUTI ON OF WORK WAS TO BE PAID BY THE ASSESSEE. (VII) SITE OFFICE, STAFF QUARTERS ETC.: THE ASSESSE E WAS TO ESTABLISH AN OFFICE (EQUIPPED WITH FACILITIES) FOR THE ENGINEER-IN-CHARGE. FURTHER IT WAS TO HAVE ITS OWN OFFICE NEAR THE SITE AND A CLERK FOR SERVICE OF COMMUNICATION NOTICES. FURTHER, ALL THE EXPENSES IN CONNECTION WITH PURCHA SE OR CONSTRUCTION OR MAINTENANCE OF SITE OFFICE, STAFF QUARTERS WAS TO BE BORNE BY THE ASSES SEE. (VIII) ROYALTIES AND TAXES: THE ASSESSEE WAS TO PAY ALL ROYALTIES, OCTROI AND OTHER TAXES AND DUTIES IN RESPECT OF MATERIALS CONSUMED ON PUBLIC W ORK. (IX) RISK: THE WORK AND ALL MATERIALS, MACHINES, TO OLS AND PLANT, SCAFFOLDING, TEMPORARY BUILDINGS AND OTHER THINGS CONNECTED THEREWITH, WER E AT THE RISK OF THE ASSESSEE. (X) RIGHTS OF WAY AND FACILITIES: THE ASSESSEE WAS TO BEAR ALL COSTS AND CHARGES FOR SPECIAL/TEMPORARY RIGHTS OF WAY WHICH MAY BE REQUIR ED FOR THE WORK. (XI) SAFETY & SECURITY: THE ASSESSEE WAS TO PROVIDE ADEQUATE MANPOWER AND MEANS FOR THE SECURITY OF THE MATERIAL, WORK-IN-PROGRESS ETC. IT WAS RESPONSIBLE FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. 34 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. FURTHER IT WAS TO PROVIDE FENCING, LIGHTING, GUARDI NG AND WATCHING OF THE WORKS AND WAS RESPONSIBLE FOR THE SAFETY OF ALL PERSONS ON THE SI TE. XII. BISALPUR JAIPUR PROJECTS, PK -2: RS. 39,56,286 /- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XV OF PAPER BOOK FOR AY 2009-10, SUBMITTED BEFORE THE LD. CIT(A). TH E FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) ATTENTION IS FIRSTLY INVITED TO CLAUSE 8 (PAGE 39) (GENERAL OBLIGATIONS) OF THE AGREEMENT EXTRACTS OF WHICH HAS BEEN PRODUCED BELOW: '8.1 THE CONTRACTOR SHALL, WITH DUE CARE AND DILIGE NCE, DESIGN (TO THE EXTENT PROVIDED FOR BY THE CONTRACT), EXECUTE AND COMPLETE THE WORKS AND R EMEDY ANY DEFECTS THEREIN IN ACCORDANCE WITH THE PROVISIONS OF THE CONTRACT. THE CONTRACTOR SHALL PROVIDE ALL SUPERINTENDENCE, LABOUR, MATERIALS, PLANT, CONTRACTOR'S EQUIPMENT AN D ALL THE OTHER THINGS, WHETHER OF A TEMPORARY OR PERMANENT NATURE, REQUIRED IN AND FOR SUCH DESIGN, EXECUTION, COMPLETION AND REMEDYING OF ANY DEFECTS, SO FAR AS THE NECESSITY F OR PROVIDING THE SAME IS SPECIFIED IN OR IS REASONABLY TO BE INFERRED FROM THE CONTRACT' FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE WAS NO T MERELY PROVIDING LABOUR UNDER THE CONTRACT. IN ADDITION TO LABOUR IT WAS REQUIRED TO MAKE ALL ARRANGEMENTS INCLUDING MATERIALS, EQUIPMENT, SUPERINTENDENCE AND ANY OTHER THING REQU IRED FOR COMPLETION OF THE WORK. (II) SUBMISSION OF PROGRAMME AND ESTIMATION OF CASH FLOWS: UNDER CLAUSE 14.1 THE ASSESSEE WAS REQUIRED TO SUBMIT A DETAILED PROGRAMME FOR THE EXECUTION OF THE WORKS. FURTHER, UNDER CLAUSE 14.3, IT WAS REQUIRED TO PROVIDE THE ENGINEE R A DETAILED CASH FLOW ESTIMATE IN QUARTERLY PERIODS. AS PER CLAUSE 14.4, SUBMISSION O F THE PROGRAMME AND ITS APPROVAL BY THE ENGINEER, DID NOT RELIEVE THE ASSESSEE OF ITS DUTIE S AND RESPONSIBILITIES (III) SUPERINTENDENCE: THE ASSESSEE WAS TO PROVIDE ALL NECESSARY SUPERINTENDENCE DURING THE EXECUTION OF WORKS. (IV) LABOUR: UNDER CLAUSE 34.1 (PAGE 48), THE ASSES SEE WAS REQUIRED TO MAKE HIS OWN ARRANGEMENTS FOR THE ENGAGEMENT OF ALL STAFF AND LA BOUR, LOCAL OR OTHER, AND FOR THEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. (V) TESTING OF MATERIALS AND PLANT: IN ADDITION TO PROVISION OF SPECIFIED PLANT AND MATERIAL, THE ASSESSEE WAS REQUIRED TO PROVIDE ASSISTANCE, LA BOUR, ELECTRICITY, FUELS, STORES, APPARATUS AND INSTRUMENTS AS ARE NORMALLY REQUIRED FOR EXAMIN ING, MEASURING AND TESTING ANY MATERIALS OR PLANTS. THE COST OF MAKING THE TEST WA S TO BE BORNE BY THE ASSESSEE VI) SAFETY, SECURITY AND PROTECTION OF THE ENVIRONM ENT: UNDER CLAUSE 19 .1 (B) THE ASSESSEE WAS REQUIRED TO PROVIDE AND MAINTAIN A T HIS OWN COST ALL LIGHTS, GUARDS, FENCING, WARNING SIGNS AND WATCHING, WHEN OR WHERE NECESSARY . FURTHER UNDER PARA (C), IT WAS TO TAKE ALL THE STEPS TO PROTECT THE ENVIRONMENT. (VII) ROYALTY: THE ASSESSEE WAS REQUIRED TO PAY ALL TONNAGE AND OTHER ROYALTIES, RENT AND OTHER PAYMENTS OR COMPENSATION, IF ANY, FOR GETTING STONE, SAND, GRAVEL, CLAY OR OTHER MATERIALS REQUIRED FOR THE WORK 35 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (VIII) IMPROVEMENT OF ROADS ETC.: UNDER CLAUSE 30.2 , THE ASSESSEE WAS RESPONSIBLE FOR PAYING THE COST OF STRENGTHENING ANY BRIDGES OR IMPROVING ANY ROAD COMMUNICATING WITH OR ON THE ROUTES TO THE SITE TO FACILITATE THE MOVEMENT OF EQ UIPMENT AND OTHER TEMPORARY WORKS. XIII. BISALPUR JAIPUR PROJECTS - PK-4: RS. 1,71,014 /- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XVI OF PAPER BOOK FOR AY 2009-10, SUBMITTED BEFORE THE LD. CIT(A). TH E FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DESIGN OF WORKS: THE ASSESSEE WAS TO CARRY OUT AND BE RESPONSIBLE FOR THE DESIGN OF THE WORKS (II) PLANT AND MATERIALS: THE ASSESSEE WAS RESPONSI BLE FOR PROCUREMENT, TRANSPORT, RECEIVING, UNLOADING AND SAFE KEEPING OF ALL PLANT, MATERIALS, CONTRACTOR'S EQUIPMENT AND OTHER THINGS REQUIRED FOR THE COMPLETION OF THE WOR KS. (III) LABOUR: THE ASSESSEE WAS TO MAKE ITS OWN ARRA NGEMENTS FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, LOCAL OR OTHERWISE, AND FOR THEIR PAYME NT, HOUSING, FEEDING AND TRANSPORT. FURTHER IT WAS TO PROVIDE AND MAINTAIN ALL NECESSAR Y ACCOMMODATION AND WELFARE ACTIVITIES FOR HIS STAFF AND LABOUR. IT WAS TO TAKE PRECAUTION S TO ENSURE HEALTH AND SAFETY OF ITS STAFF. (IV) TESTING: THE ASSESSEE WAS TO PROVIDE ALL DOCUM ENTS AND INFORMATION NECESSARY FOR TESTING AND SUCH ASSISTANCE, LABOUR, MATERIALS, ELE CTRICITY, FUEL, STORES, APPARATUS AND INSTRUMENTS THAT ARE NECESSARY TO CARRY OUT THE TES TS EFFICIENTLY. (V) SUPERINTENDENCE: THE ASSESSEE WAS TO PROVIDE AL L THE NECESSARY SUPERINTENDENCE DURING THE DESIGN AND EXECUTION OF THE WORKS. (VI) SECURITY: THE ASSESSEE WAS RESPONSIBLE FOR THE SECURITY OF THE SITE AND FOR KEEPING THE UNAUTHORISED PERSONS OFF THE SITE. (VII) RIGHTS OF WAY: THE ASSESSEE WAS TO BEAR ALL C OSTS AND CHARGES FOR SPECIAL OR TEMPORARY RIGHTS-OF-WAY REQUIRED BY HIM FOR ACCESS TO THE SIT E XLV. JODHPUR PROJECT: RS. 23,14,711/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE I OF PAPER BOOK FOR AY 2006-07, SUBMITTED BEFORE THE LD. CIT(A). THE FO LLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGN: THE ASSESSEE WAS RESPONSIB LE FOR THE DESIGN OF THE WORK UNDER THE CONTRACT AND WAS ALSO RESPONSIBLE FOR ACCURACY OF T HE SAID DESIGNS. THE ASSESSEE WAS TO CARRY OUT PREPARATORY WORKS SUC H AS TOPOGRAPHIC SURVEY, SOIL INVESTIGATIONS, GEO-TECHNICAL INVESTIGATIONS ETC. T O PREPARE THE PLANS, L-SECTIONS, DESIGNS, WORKING DRAWINGS ETC. IT WAS TO SUBMIT THE DETAILED DESIGN AND THE EXECUTION DRAWINGS SUCH AS SITE PLANS, GENERAL ARRANGEMENT DRAWINGS, L-SEC TIONS, PLANS, ARCHITECTURAL, STRUCTURAL DRAWINGS AND ALL WORKING DRAWINGS, FOR APPROVAL. (II) MATERIALS: ALL THE MATERIAL REQUIRED FOR THE W ORK WAS TO BE PROVIDED BY THE ASSESSEE. 36 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (V) LABOUR: THE ASSESSEE WAS REQUIRED TO EMPLOY STA FF FOR EXECUTION OF WORK. (VI) PLANT: THE ASSESSEE WAS TO ARRANGE AND SUPPLY AT ITS OWN COST ALL MATERIAL, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, CORDAGE, TACKLE, S CAFFOLDING AND TEMPORARY WORKS REQUIRED FOR PROPER EXECUTION OF THE WORK. (V) COST OF INSPECTION AND TESTING: FOR ALL EQUIPME NT AND MATERIAL REQUIRED FOR THE EXECUTION OF THE WORK, THE ARRANGEMENT FOR INSPECTION AND EXP ENSES THERETO WAS TO BE BORNE BY THE ASSESSEE. FURTHER, THE ASSESSEE WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, ELECTRICITY, FUEL, CONSUMABLES LABOUR, MATERIALS TO CARRY OUT EFFICIENT TESTING OF EQUIPMENT, MATERIAL AND OTHER PARTS OF WORKS. (VI) WATER AND ELECTRICITY: THE COST OF ALL WATER C ONNECTIONS NECESSARY FOR THE EXECUTION OF THE WORK AND THE COST OF WATER CONSUMED AND HIRE CH ARGES OF METERS AND THE COST OF ELECTRICITY CONSUMED IN CONNECTION WITH THE EXECUTI ON OF WORK WAS TO BE PAID BY THE ASSESSEE. (VII) SITE OFFICE, STAFF QUARTERS ETC.: THE ASSESSE E WAS TO HAVE AN OFFICE NEAR THE SITE AND A CLERK FOR SERVICE OF COMMUNICATION NOTICES. FURTHER, ALL THE EXPENSES IN CONNECTION WITH PURCHA SE OR CONSTRUCTION OR MAINTENANCE OF SITE OFFICE, STAFF QUARTERS WAS TO BE BORNE BY THE ASSES SEE. (VIII) ROYALTIES AND TAXES: THE ASSESSEE WAS TO PAY ALL ROYALTIES, OCTROI AND OTHER TAXES AND DUTIES IN RESPECT OF MATERIALS CONSUMED ON PUBLIC W ORK. (IX) INSURANCE: THE ASSESSEE WAS TO TAKE ACCIDENT I NSURANCE AND THIRD PARTY INSURANCE. THE RESPONSIBILITY OF TIMELY PAYMENT OF PREMIUMS WAS TH AT OF THE ASSESSEE. (X) QUALITY ASSURANCE SYSTEM: THE ASSESSEE WAS TO I NSTITUTE A QUALITY ASSURANCE SYSTEM TO DEMONSTRATE COMPLIANCE WITH REQUIREMENTS OF THE CON TRACT. (XI) RIGHTS OF WAY AND FACILITIES: THE ASSESSEE WAS TO BEAR ALL COSTS AND CHARGES FOR SPECIAL/TEMPORARY RIGHTS OF WAY WHICH MAY BE REQUIR ED FOR THE WORK. (XII) SECURITY OF THE SITE: THE ASSESSEE WAS TO PRO VIDE ADEQUATE MANPOWER AND MEANS FOR THE SECURITY OF THE MATERIAL, WORK-IN-PROGRESS ETC. IT WAS RESPONSIBLE FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. FROM THE PERUSAL OF THE TERMS AND CONDITIONS OF ALL THE AGREEMENTS (ABOVE), IT IS CLEAR THAT IT IS NOT A CASE WHERE THE ASSESSEE WAS PROVIDED WITH THE ESTABLISHMENT AND MATERIALS REQUIRED TO EXECUTE THE WORK, WHICH HAPPENS IN CASE OF WORKS CONTRACT WHERE THE CONTRACTOR GETS THE MATERIAL AND OTHER REQUISITES FROM THE CLIENT AND A LL HE HAS TO DO IS EMPLOY LABOUR. THE ASSESSEE IN THE GIVEN CASE WAS TO PROCURE RAW MATER IAL, MAKE ARRANGEMENTS FOR POWER, WATER, PLANT MACHINERY ETC., AND CONDUCT ALL THE OT HER ACTIVITIES NEEDED FOR CONSTRUCTION. IN ADDITION TO THE ABOVE, THE ASSESSEE WAS EVEN RES PONSIBLE FOR OPERATIONS AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY, IN THE FOLLOWING CA SES: SONTHI PROJECT SCOPE OF WORK ON PAGE 12 INCLUDES OPERATING THE SYSTEM FOR 2 YEARS. 37 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. TARAKA LIS: AS PER PARA 6.2.13 ON PAGE 185, THE A SSESSEE WAS REQUIRED TO MAINTAIN THE FACILITY FOR A PERIOD OF 12 MONTHS. ITS LIABILITY W AS LIMITED TO REPLACEMENT OF DEFECTIVE PARTS THAT MAY DEVELOP IN THE EQUIPMENT FROM FAULTY DESIG N, MATERIALS OR WORKMANSHIP. MADHEPURA PROJECT USMANPUR PROJECT (ANNEXURE IV): SCOPE OF WORK ON PAGES 2-3 INCLUDES OPERATION AND MAINTENANCE. WAZIRABAD PROJECT (ANNEXURE-I OF PAPER BOOK FOR A Y 2009-10): SCOPE OF WORK ON PAGE 144 INCLUDES WATCH & WARD, PATROLLING AND MAINTENANCE O F PIPE LINE AND OTHER APPURTENANCES ETC. FOR A PERIOD OF 12 MONTHS. GWALIOR PROJECT (ANNEXURE V OF PAPER BOOK FOR AY 2009-10): SEE PAGE 74 HONGANUR LIS (ANNEXURE-VIII OF PAPER BOOK FOR AY 2009-10): AS PER PARA 6.2.13 ON PAGE 185, THE ASSESSEE WAS REQUIRED TO MAINTAIN THE FACI LITY FOR A PERIOD OF 12 MONTHS. ITS LIABILITY WAS LIMITED TO REPLACEMENT OF DEFECTIVE PARTS THAT MAY DEVELOP IN THE EQUIPMENT FROM FAULTY DESIGN, MATERIALS OR WORKMANSHIP. BANNAHALLIHUNDI LIS (ANNEXURE-IX OF PAPER BOOK FO R AY 2009-10): SCHEDULE B, SHOWING ITEMS OF WORK TO BE CARRIED OUT, SI. NO. 18 (PAGE 7 8) INCLUDES OPERATION & MAINTENANCE FOR 3 YEARS. KERALA PUTTUVAM & MEENAD PROJECT JAMUI PROJECT (ANNEXURE XII OF PAPER BOOK FOR AY 2009-10): O&M OF 1 YEAR JAWAI PALI PROJECT (ANNEXURE XIII OF PAPER BOOK F OR AY 2009-10)- SCOPE OF WORK ON PAGE 3 INCLUDES OPERATIONS AND MAINTENANCE. THE 0 & M PERI OD WAS 5 YEARS. BISALPUR JAIPUR PROJECT- PK-2 (ANNEXURE XV OF PAP ER BOOK FOR AY 2009-10): DESCRIPTION OF WORK ON PAGE 1 INCLUDES OPERATION AN D MAINTENANCE FOR TWO YEARS. BISALPUR JAIPUR PROJECT- PK 4 (ANNEXURE XVI OF PA PER BOOK FOR AY 2009-10): DESCRIPTION OF WORK ON PAGE 1 INCLUDES OPERATION AN D MAINTENANCE FOR TWO YEARS. JODHPUR PROJECT (ANNEXURE I OF PAPER BOOK FOR AY 2006-07): THE PROJECT HAD AN OPERATION AND MAINTENANCE PERIOD OF 5 YEARS. ASST YEAR 2010-11 (ITA NO. 2289/KOL/2013 ) RITHALA PROJECT: RS.12,26,26,493/- THE FOLLOWING CONDITIONS IN THE AGREEMENT BETWEEN T HE ASSESSEE AND DELHI JAL BOARD CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL: THE ASSESSEE WAS, AT ITS OWN EXPENSE, TO PROVIDE ALL MATERIALS REQUIRED FOR THE EXECUTION OF THE WORK. FURTHER IT WAS TO SUPPLY SAM PLES OF THE SAID MATERIALS TO THE ENGINEER-IN-CHARGE FOR HIS APPROVAL. (II) LABOUR: THE ASSESSEE WAS TO PAY WAGES TO LABOU R HIRED BY IT FOR EXECUTION OF THE WORK. IN ADDITION TO THE ABOVE, IT WAS TO PROVIDE THE FOL LOWING AMENITIES: 38 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. ALL THE FACILITIES IN CONNECTION WITH THE SAFETY OF LABOUR AS PER CLAUSE 19H AT PAGE 211 OF THE PAPER BOOK, THE ASSESSEE WAS TO PROVIDE HUTS (CAMPS) FOR HIS WORKMEN. WATER FOR THE USE OF LABOUR ARRANGEMENTS FOR DISPOSAL OF EXCRETA DRAINAGE IN ADDITION TO THE ABOVE THE ASSESSEE WA S TO EMPLOY TECHNICAL STAFF AND EMPLOYEES. IT WAS TO PROVIDE ALL THE NECESSARY SUPE RINTENDENCE DURING THE EXECUTION OF THE WORK. (III) TOOLS AND PLANTS: THE ASSESSEE WAS TO PROVIDE AT HIS OWN COST ALL MATERIALS, TOOLS AND PLANTS REQUIRED FOR EXECUTION OF THE WORK (IV) SITE OFFICE: THE ASSESSEE WAS TO CONSTRUCT AT HIS OWN EXPENSE A TEMPORARY SITE OFFICE AND WAS ALSO TO PROVIDE THE NECESSARY FURNITURE (V) ELECTRICITY: THE ASSESSEE WAS TO ARRANGE AT HIS OWN COST POWER CONNECTION REQUIRED FOR THE WORK. FURTHER IT WAS TO MAKE NECESSARY ARRANGEM ENTS OF ITS DIESEL GENERATOR SO THAT THE SAME CAN BE USED IN THE EVENT OF NON-AVAILABILITY O F POWER. (VI) WATER: THE ASSESSEE WAS TO MAKE ITS OWN ARRANG EMENTS FOR WATER REQUIRED FOR THE WORK. II. USMANPUR PROJECT: RS. 1,76,19,323/- THE FOLLOWING CONDITIONS IN THE AGREEMENT FOR THE A FORESAID PROJECT BETWEEN THE ASSESSEE AND DELHI JAL BOARD CLEARLY ESTABLISH THAT THE ASSE SSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DESIGN OBLIGATIONS: THE ASSESSEE WAS TO CARRY O UT AND BE RESPONSIBLE FOR THE DESIGN OF THE WORK. (II) STAFF & LABOUR: THE ASSESSEE WAS TO MAKE ITS O WN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, LOCAL OR OTHERWISE, AND FOR T HEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. IT WAS TO PROVIDE AND MAINTAIN ALL NECESSARY ACCOMM ODATION AND WELFARE FACILITIES FOR ITS PERSONNEL. FURTHER IT WAS TO TAKE ALL REASONABLE PR ECAUTIONS TO MAINTAIN HEALTH AND SAFETY OF ITS PERSONNEL. IT WAS TO PROVIDE THE NECESSARY SUPERINTENDENCE TO PLAN, ARRANGE, DIRECT, MANAGE, INSPECT AND TEST THE WORK. (III) PLANT & MATERIALS: THE ASSESSEE WAS TO CARRY OUT THE MANUFACTURE OF PLANT, THE PRODUCTION OF MATERIALS REQUIRED FOR THE WORK. (IV) ELECTRICITY: THE ASSESSEE WAS TO ARRANGE THE E LECTRICITY/POWER CONNECTION OF REQUIRED CAPACITY FOR CARRYING OUT THE WORKS .FURTHER IT WAS TO MAKE NECESSARY ARRANGEMENTS FOR DIESEL GENERATORS SO THAT THE PROGRESS OF AWARDED C ONTRACT IS NOT ADVERSELY AFFECTED DUE TO FAILURE/NON-AVAILABILITY OF ELECTRICITY/POWER. 39 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (V) SITE OFFICE: THE ASSESSEE WAS TO PROVIDE A SITE OFFICE WITH ALL THE NECESSARY FURNITURE, TELEPHONE FACILITY, DISPLAY BOARDS ETC. FOR USE BY THE ENGINEER AND THE SUPERVISORY STAFF. (VI) SAFETY & SECURITY: THE ASSESSEE WAS TO TAKE CA RE OF THE SAFETY OF ALL PERSONS ENTITLED TO BE ON THE SITE. IT WAS TO PROVIDE NECESSARY FENCING , LIGHTING, GUARDING AND WATCHING OF THE WORKS UNTIL COMPLETION THE ASSESSEE WAS EVEN RESPONSIBLE FOR THE SECURITY OF SITE AND FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. (VII) RIGHTS OF WAY: THE ASSESSEE WAS TO BEAR ALL C OSTS AND CHARGES FOR SPECIAL AND/OR TEMPORARY RIGHTS-OF-WAY WHICH MAY BE REQUIRED FOR A CCESS TO THE SITE (VIII) TESTING: IT WAS TO PROVIDE ALL APPARATUS, AS SISTANCE, DOCUMENTS AND OTHER INFORMATION, ELECTRICITY, EQUIPMENT, FUEL, CONSUMAB 1ES, INSTRUMENTS, LABOUR, MATERIALS, AND SUITABLY QUALIFIED AND EXPERIENCED STAFF NECESSARY TO CARRY OUT THE TESTS EFFICIENTLY. III. JAWAIPALI PROJECTS: RS. 14,87,60,590/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE I OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGN: THE ASSESSEE WAS RESPONSIB LE FOR THE DESIGN OF THE WORK UNDER THE CONTRACT AND WAS ALSO RESPONSIBLE FOR ACCURACY OF T HE SAID DESIGNS. THE ASSESSEE WAS TO CARRY OUT PREPARATORY WORKS SUC H AS TOPOGRAPHIC SURVEY, SOIL INVESTIGATIONS, GEO-TECHNICAL INVESTIGATIONS ETC. T O PREPARE THE PLANS, L-SECTIONS, DESIGNS, WORKING DRAWINGS ETC. IT WAS TO SUBMIT THE DETAILED DESIGN AND THE EXECUTION DRAWINGS SUCH AS SITE PLANS, GENERAL ARRANGEMENT DRAWINGS, L-SECT IONS, PLANS, ARCHITECTURAL, STRUCTURAL DRAWINGS AND ALL WORKING DRAWINGS, FOR APPROVAL. (II) MATERIALS: ALL THE MATERIAL REQUIRED FOR THE W ORK WAS TO BE PROVIDED BY THE ASSESSEE. (III) LABOUR: THE ASSESSEE WAS TO PAY WAGES TO ITS LABOUR. IN ADDITION IT WAS TO HIRE SUPERVISORY STAFFLIKE PROJECT MANGER AND SENIOR ENG INEER. (I) PLANT: THE ASSESSEE WAS TO ARRANGE AND SUPPLY A T ITS OWN COST ALL MATERIAL, PLANT, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, CORDAGE, TACKLE, S CAFFOLDING AND TEMPORARY WORKS REQUIRED FOR PROPER EXECUTION OF THE WORK. (V) COST OF INSPECTION AND TESTING: FOR ALL EQUIPME NT AND MATERIAL REQUIRED FOR THE EXECUTION OF THE WORK, THE ARRANGEMENT FOR INSPECTI ON AND EXPENSES THERETO WAS TO BE BORNE BY THE ASSESSEE. FURTHER, THE ASSESSEE WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, ELECTRICITY, FUEL, CONSUMABLES LABOUR, MATERIALS TO CARRY OUT EFFICIEN T TESTING OF EQUIPMENT, MATERIAL AND OTHER PARTS OF WORKS. (VI) WATER AND ELECTRICITY: THE COST OF ALL WATER C ONNECTIONS NECESSARY FOR THE EXECUTION OF THE WORK AND THE COST OF WATER CONSUMED AND HIRE CH ARGES OF METERS AND THE COST OF ELECTRICITY CONSUMED IN CONNECTION WITH THE EXECUTI ON OF WORK WAS TO BE PAID BY THE ASSESSEE. 40 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (VII) SITE OFFICE, STAFF QUARTERS ETC.: THE ASSESSE E WAS TO ESTABLISH AN OFFICE (EQUIPPED WITH FACILITIES) FOR THE ENGINEER-IN-CHARGE. FURTHER IT WAS TO HAVE ITS OWN OFFICE NEAR THE SITE AND A CLERK FOR SERVICE OF COMMUNICATION NOTICES. FURTHER, ALL THE EXPENSES IN CONNECTION WITH PURCHA SE OR CONSTRUCTION OR MAINTENANCE OF SITE OFFICE, STAFF QUARTERS WAS TO BE BORNE BY THE ASSESSEE. (VIII) ROYALTIES AND TAXES: THE ASSESSEE WAS TO PAY ALL ROYALTIES, OCTROI AND OTHER TAXES AND DUTIES IN RESPECT OF MATERIALS CONSUMED ON PUBLIC W ORK. (IX) RISK: THE WORK AND ALL MATERIALS, MACHINES, TO OLS AND PLANT, SCAFFOLDING, TEMPORARY BUILDINGS AND OTHER THINGS CONNECTED THEREWITH, WER E AT THE RISK OF THE ASSESSEE. (X) RIGHTS OF WAY AND FACILITIES: THE ASSESSEE WAS TO BEAR ALL COSTS AND CHARGES FOR SPECIAL/TEMPORARY RIGHTS OF WAY WHICH MAY BE REQUIR ED FOR THE WORK. (XI) SAFETY &SECURITY: THE ASSESSEE WAS TO PROVIDE ADEQUATE MANPOWER AND MEANS FOR THE SECURITY OF THE MATERIAL, WORK-IN-PROGRESS ETC. IT WAS RESPONSIBLE FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. FURTHER IT WAS TO PROVIDE FENCING, LIGHTING, GUARDI NG AND WATCHING OF THE WORKS AND WAS RESPONSIBLE FOR THE SAFETY OF ALL PERSONS ON THE SI TE. IV. WAZIRABAD PROJECTS: RS. 11,79,01,966/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE II OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DESIGN OBLIGATIONS: THE ASSESSEE WAS TO CARRY O UT AND BE RESPONSIBLE FOR THE DESIGN OF THE WORK. (II) STAFF & LABOUR: THE ASSESSEE WAS TO MAKE ITS O WN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, LOCAL OR OTHERWISE, AND FOR T HEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. IT WAS TO PROVIDE AND MAINTAIN ALL NECESSARY ACCOMM ODATION AND WELFARE FACILITIES FOR ITS PERSONNEL. FURTHER IT WAS TO TAKE ALL REASONABLE PR ECAUTIONS TO MAINTAIN HEALTH AND SAFETY OF ITS PERSONNEL. IT WAS TO PROVIDE THE NECESSARY SUPERINTENDENCE TO PLAN, ARRANGE, DIRECT, MANAGE, INSPECT AND TEST THE WORK. (III) PLANT & MATERIALS: THE ASSESSEE WAS TO CARRY OUT THE MANUFACTURE OF PLANT, THE PRODUCTION OF MATERIALS REQUIRED FOR THE WORK. IV) ELECTRICITY AND WATER: FOR CONSTRUCTION PURPOSE S AND FOR SITE OFFICE, THE ASSESSEE WAS TO ARRANGE AND PROVIDE AT ITS OWN COST ELECTRIC CONNEC TION OF SUITABLE LOAD FROM ELECTRIC SUPPLY AGENCY AND WAS ALSO TO KEEP GENERATORS AS ST ANDBY ARRANGEMENT. THE WATER REQUIRED FOR CONSTRUCTION WAS TO BE ARRAN GED BY THE ASSESSEE AT ITS OWN COST. (V) SITE OFFICE: THE ASSESSEE WAS TO PROVIDE A SITE OFFICE WITH AC CABINS, MEETING ROOM WITH PANTRY AND TOILET FACILITIES. 41 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. IN ADDITION TO THE ABOVE, IT WAS TO BEAR RUNNING EX PENSES OF THE SITE OFFICE AND WAS TO PROVIDE FOUR WHEEL DRIVE AC VEHICLE WITH DRIVER. (VI) SAFETY & SECURITY: THE ASSESSEE WAS TO TAKE CA RE OF THE SAFETY OF ALL PERSONS ENTITLED TO BE ON THE SITE. IT WAS TO PROVIDE NECESSARY FENCING , LIGHTING, GUARDING AND WATCHING OF THE WORKS UNTIL COMPLETION THE ASSESSEE WAS EVEN RESPONSIBLE FOR THE SECURITY OF SITE AND FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. (VII) RIGHTS OF WAY: THE ASSESSEE WAS TO BEAR ALL C OSTS AND CHARGES FOR SPECIAL AND/OR TEMPORARY RIGHTS-OF-WAY WHICH MAY BE REQUIRED FOR A CCESS TO THE SITE (VIII) INSPECTION & TESTING: THE ASSESSEE WAS TO MA KE ALL NECESSARY ARRANGEMENTS FOR TO AND FRO TRAVELS OF ENGINEERS FOR PRE-DELIVERY INSPE CTION IN INDIA AND ABROAD. IT WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, DOCUME NTS AND OTHER INFORMATION, ELECTRICITY, EQUIPMENT, FUEL, CONSUMABLES, INSTRUMENTS, LABOUR, MATERIALS, AND SUITABLY QUALIFIED AND EXPERIENCED STAFF NECESSARY TO CARRY OUT THE TESTS EFFICIENTLY. V. CHENNAI CORPORATION - MC ROAD: RS. 8,75,717/-, V ILLIVAKKAM PROJECT: RS. 16,70,124/- &KATHIVAKKAM PROJECT: RS. 13,34,658/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE IV OF THE PAPER BOOK SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIALS: THE ASSESSEE WAS REQUIRED TO FURNISH ALL MATERIALS REQUIRED FOR PROPER EXECUTION OF THE WORK. FURTHER, THE COST OF ALL ACC EPTANCE TESTING (WHICH INCLUDES SAMPLING, INSPECTION, TESTING, RECORDS AND DOCUMENTATION) WAS TO BE BORNE BY THE ASSESSEE. (II) PLANT: THE TENDERED PRICE INCLUDED THE COST OF PROVISION AND INSTALLATION OF PLANT & APPLIANCES REQUIRED FOR THE PERFORMANCE OF ALL THE OPERATIONS. THE ASSESSEE WAS REQUIRED TO FURNISH, MAINTAIN AND OPERATE AT ITS EXPENSE ALL TOOLS, PLANTS AND EQUIPMENTS. (III) TEMPORARY STRUCTURES : AS PER PARA 7-2-8 ON P AGE 15, THE ASSESSEE WAS TO ERECT WEATHER-PROOF SHEDS FOR KEEPING THE MATERIALS UNDER COVER. FURTHER, IT WAS TO PROVIDE AND MAINTAIN TEMPORARY FENCES, GUARDS ETC. NECESSARY FO R THE EXECUTION OF CONTRACT WORK. FURTHER, IT WAS TO ERECT SUFFICIENT LATRINES FOR TH E USE OF WORK PEOPLE AND WAS TO KEEP THE SAME CLEAN AND DISINFECTED. (IV) WATER AND LIGHTING: THE ASSESSEE WAS TO PAY AL L FEES AND PROVIDE WATER AND LIGHT AS REQUIRED. IT WAS TO PAY ALL THE CHARGES FOR ITS USE AT WORK AND BY THE WORKMEN. (V) SAFETY CODE: FOR SAFETY OF ITS WORKMEN IT WAS T O FOLLOW THE SAFETY CODE AS LAID OUT IN PAGES 30-32. (VI) DIVERSION ROADS: THE ASSESSEE WAS TO MAKE ITS OWN ARRANGEMENTS FOR FORMING AND MAINTAINING DIVERSION ROADS FOR TRAFFIC DURING THE EXECUTION OF WORK. VI. JAMUI PROJECTS: RS. 4,54,36,481/- 42 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE V OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL: THE ASSESSEE WAS REQUIRED TO PROCURE CEMENT, STEEL, BITUMEN ETC. NEEDED FOR EXECUTION OF THE WORK (II) LABOUR: THE ASSESSEE WAS TO EMPLOY TECHNICAL S TAFF AND PROVIDE ALL THE NECESSARY SUPERINTENDENCE DURING THE EXECUTION OF THE WORK. (III) SITE OFFICE: THE ASSESSEE WAS TO CONSTRUCT AN D PROVIDE A SITE OFFICE FOR THE CONTRACTEE WITH THE FOLLOWING AMENITIES SANITARY, WATER SUPPLY INSTALLATIONS AND FITTINGS WATCH & WARD ELECTRICAL AND WATER CONNECTION WASTE DISPOSAL FURNITURE AND OFFICE EQUIPMENT (IV) FIELD LABORATORY: THE ASSESSEE WAS TO ARRANGE AND PROVIDE AN ADEQUATELY EQUIPPED LABORATORY WITH THE NECESSARY MANPOWER. FURTHER IT WAS REQUIRED TO MAINTAIN THE SAME. VII. RANGARAJAPURAM PROJECT RS.6,24,151/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE I OF THE PAPER BOOK MINED BEFORE THE LD. CIT(A). THE FOLLOWING CONDITIO NS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NO~ A MERE WORKS CONTRACTOR: (I) MATERIALS: THE ASSESSEE WAS REQUIRED TO FURNISH ALL MATERIALS REQUIRED FOR PROPER EXECUTION OF THE WORK. FURTHER, THE COST OF ALL ACC EPTANCE TESTING (WHICH INCLUDES SAMPLING, INSPECTION, TESTING, RECORDS AND DOCUMENTATION) WAS TO BE BORNE BY THE ASSESSEE. (II) PLANT: THE TENDERED PRICE INCLUDED THE COST OF PROVISION AND INSTALLATION OF PLANT & APPLIANCES REQUIRED FOR THE PERFORMANCE OF ALL THE OPERATIONS. THE ASSESSEE WAS REQUIRED TO FURNISH, MAINTAIN AND OPERATE AT ITS EXPENSE ALL TOOLS, PLANTS AND EQUIPMENTS. (III) TEMPORARY STRUCTURES: AS PER PARA 7-2-8 ON PA GE 8, THE ASSESSEE WAS TO ERECT WEATHER- PROOF SHEDS FOR KEEPING THE MATERIALS UNDER COVER. FURTHER, IT WAS TO PROVIDE AND MAINTAIN TEMPORARY FENCES, GUARDS ETC. NECESSARY FOR THE EXE CUTION OF CONTRACT WORK. FURTHER, IT WAS TO ERECT SUFFICIENT LATRINES FOR TH E USE OF WORK PEOPLE AND WAS TO KEEP THE SAME CLEAN AND DISINFECTED. (IV) WATER AND LIGHTING: THE ASSESSEE WAS TO PAY AL L FEES AND PROVIDE WATER AND LIGHT AS REQUIRED. IT WAS TO PAY ALL THE CHARGES FOR ITS USE AT WORK AND BY THE WORKMEN. (V) SAFETY CODE: FOR SAFETY OF ITS WORKMEN IT WAS T O FOLLOW THE SAFETY CODE AS LAID OUT IN PAGES 22-24. VIII. KILPAUK WATER SUPPLY PROJECT: RS. 31,26,816/- 43 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE VIII OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIALS REQUIRED FOR THE PROJECT: THE CONTRAC TOR WAS RESPONSIBLE FOR PROCUREMENT OF REQUIRED QUANTITY OF MATERIAL LIKE PIPES, SPECIAL M ACHINERY, ELECTRICAL ITEMS ETC. (II) LABOUR: THE CONTRACTOR WAS REQUIRED TO MAKE IT S OWN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, FOR THEIR PAYMENT, HOUSING , FEEDING AND TRANSPORT. FURTHER HE WAS TO TAKE ADEQUATE PROVISIONS FOR THE SAFETY OF THE WORK MEN AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE EMPLOYEES (III) PLANT: ALL TOOLS AND PLANTS REQUIRED FOR THE WORK WAS TO SUPPLIED BY THE CONTRACTOR AT ITS OWN COST. (IV) POWER & WATER: THE CONTRACTOR WAS REQUIRED TO MAKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITE AND MAKE ITS OWN ARRAN GEMENT OF WATER. (V) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED TO PROVIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED T O CONDUCT ALL THE SURVEYS REQUIRED FOR EXECUTION OF THE WORK. (VI) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIRED , AT HIS OWN EXPENSE, TO ERECT AND MAINTAIN TEMPORARY FENCES AND GATES ALONG THE BOUND ARIES. (VII) WATCHING AND LIGHTING: (VIII) TEMPORARY DIVERSION OF ROADS, CUSTOMARY VEHI CLE LICENSE AND PERMIT FEES: THE ASSESSEE WAS TO PAY CUSTOMARY VEHICLES LICENSE AND PERMIT FEES FOR USE OF PUBLIC ROADS. FURTHER, IT WAS TO MAKE AT ITS OWN COST, ALL THE NE CESSARY PROVISION FOR TEMPORARY DIVERSION OF ROADS, CART-TRACKS, FOOTPATHS, DRAINS, WATER COU RSES, CHANNELS ETC. IX. T.K. HALLY PROJECT: RS. 5,89,29,563/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE IX OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: ATTENTION IN THIS REGARD IS INVITED TO THE GENERAL CONDITIONS SECTION 2, PART-I OF THE ANNEXURE ON PAGE 38, WHICH SAYS THAT THE GENERAL CONDITIONS SHALL BE THOSE FORMING PART-I OF THE CONDITIONS OF THE CONTRACT AND PREPARED BY THE 'FED ERATION INTERNATIONALE DES INGENIEURS- CONSEILS (FIDIC) 'THE SAID CONDITIONS HAVE BEEN DIS CUSSED IN ANNEXURE VII. SOME OF THE SAID CONDITIONS HAVE BEEN DISCUSSED BELOW (REFER AN NEXURE VII): (I) DESIGN OBLIGATIONS: THE ASSESSEE WAS TO CARRY O UT AND BE RESPONSIBLE FOR THE DESIGN OF THE WORK. (II) STAFF & LABOUR: THE ASSESSEE WAS TO MAKE ITS O WN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, LOCAL OR OTHERWISE, AND FOR T HEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. IT WAS TO PROVIDE AND MAINTAIN ALL NECESSARY ACCOMM ODATION AND WELFARE FACILITIES FOR ITS PERSONNEL. FURTHER IT WAS TO TAKE ALL REASONABLE PR ECAUTIONS TO MAINTAIN HEALTH AND SAFETY OF ITS PERSONNEL. 44 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. IT WAS TO PROVIDE THE NECESSARY SUPERINTENDENCE TO PLAN, ARRANGE, DIRECT, MANAGE, INSPECT AND TEST THE WORK. (III) PLANT & MATERIALS: THE ASSESSEE WAS TO CARRY OUT THE MANUFACTURE OF PLANT, THE PRODUCTION OF MATERIALS REQUIRED FOR THE WORK. (IV) SAFETU & SECURITY: THE ASSESSEE WAS TO TAKE CA RE OF THE SAFETY OF ALL PERSONS ENTITLED TO BE OM THE SITE. IT WAS TO PROVIDE NECESSARY FENCING , LIGHTING, GUARDING AND WATCHING OF THE WORKS UNTIL COMPLETION. THE ASSESSEE WAS EVEN RESPONSIBLE FOR THE SECURITY OF SITE AND FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. (V) RIGHTS OF WAY: THE ASSESSEE WAS TO BEAR ALL COS TS AND CHARGES FOR SPECIAL AND/OR TEMPORARY RIGHTS-OF-WAY WHICH MAY BE REQUIRED FOR A CCESS TO THE SITE (VI) TESTING: IT WAS TO PROVIDE ALL APPARATUS, ASSI STANCE, DOCUMENTS AND OTHER INFORMATION, ELECTRICITY, EQUIPMENT, FUEL, CONSUMABLES, INSTRUME NTS, LABOUR, MATERIALS, AND SUITABLY QUALIFIED AND EXPERIENCED STAFF NECESSARY TO CARRY OUT THE TESTS EFFICIENTLY. SOME OF THE PARTICULAR CONDITIONS OF THE CONTRACT A S DISCUSSED IN ANNEXURE IX, HAVE BEEN DISCUSSED: (VII) ELECTRICITY & WATER: THE ASSESSEE WAS RESPONS IBLE FOR PROVISION OF ALL POWER, WATER AND OTHER SERVICES REQUIRED FOR CONSTRUCTION AND SE CTIONAL TESTING. X. NBCC FARIDABAD PROJECT: RS. 42,42,000/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE X OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIAL: THE ASSESSEE WAS TO PROVIDE, AT HIS O WN EXPENSE, ALL THE MATERIAL REQUIRED INCLUDING CEMENT & STEEL FOR THE WORKS. (II) LABOUR: IN ADDITION TO HIRING LABOUR, THE ASSE SSEE WAS TO EMPLOY TECHNICAL STAFF AT HIS COST. FURTHER IT WAS TO CONSTRUCT LABOUR HUTS AND M AINTAIN GOOD SANITARY CONDITIONS IN THE HUTS. THE LAND REQUIRED FOR THE HUTS WAS TO ARRANGE D BY THE ASSESSEE (III) SITE OFFICE: THE ASSESSEE WAS TO CONSTRUCT AT HIS OWN COST, SUITABLE FURNISHED OFFICE AT SITE EQUIPPED WITH BASIC FACILITIES LIKE TELEPHONE, FAX, INTERNET ETC. THE LAND REQUIRED FOR THE OFFICE WAS TO BE ARRANGED BY THE ASSESSEE. (IV) WATCHING & LIGHTING: THE ASSESSEE WAS TO PROVI DE NECESSARY BARRIERS, LIGHTS, WATCHMEN ETC. AT HIS OWN COST. (V) TOOLS AND PLANTS: THE ASSESSEE WAS TO PROVIDE A LL THE TOOLS AND PLANT REQUIRED FOR THE WORKS. (VI) WATER AND ELECTRICITY: THE ASSESSEE WAS TO MAKE HIS OWN ARRANGEMENT FOR WATER & POWER FOR CONSTRUCTION AND OTHER PURPOSES AT HIS OW N COST. IT WAS ALSO TO MAKE STANDBY ARRANGEMENT FOR WATER AND ELECTRICITY TO ENSURE UNI NTERRUPTED SUPPLY. (VII) TESTING: THE ASSESSEE WAS TO SET UP AND MAINT AIN AT HIS OWN COST, A FIELD TESTING LABORATORY FOR ALL DAY TO DAY TESTS. ALL THE EQUIPM ENT AND PERSONNEL REQUIRED FOR THE TESTING WAS TO BE PROVIDED BY THE ASSESSEE, WHICH WAS TO FU LLY SERVICE THE SITE LABORATORY. 45 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. FURTHER, ALL THE TESTING CHARGES (FOR TESTS CONDUCT ED ON THE SITE LABORATORY OR OUTSIDE) WERE TO BE BORNE BY THE ASSESSEE XI. POKHARAN PROJECT: RS. 8,61,21,207/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XI OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGN: THE ASSESSEE WAS RESPONSIB LE FOR THE DESIGN OF THE WORKS AND THE ACCURACY OF SUCH DESIGNS. IT WAS REQUIRED TO CARRY OUT THE PREPARATORY WORKS SUCH AS TOPOGRAPHIC SURVEY, SOIL INVESTIGATIONS, GEOTECHNICAL INVESTIGATIONS ETC. TO PREPARE THE PLANS, L-SECTIONS, DESIGNS, WORKING DRAWINGS ETC. (II) MATERIALS: THE ASSESSEE WAS RESPONSIBLE FOR AR RANGEMENT OF ALL MATERIALS REQUIRED FOR PROPER EXECUTION OF WORK. (III) LABOUR: THE ASSESSEE WAS RESPONSIBLE FOR PAYI NG WAGES TO LABOURERS ON THE WORK. FURTHER, THE ASSESSEE WAS REQUIRED TO ENGAGE TECHNI CAL STAFF AS PER CLAUSE 39 ON PAGE 82. IT WAS EVEN REQUIRED TO HIRE SUPERVISORY STAFF LIKE PR OJECT MANAGERS, SENIOR ENGINEERS ETC. ON THE SITE SO AS TO ENSURE THE WORK QUALITY (IV) PLANT: THE ASSESSEE WAS REQUIRED TO ARRANGE AN D SUPPLY AT ITS OWN COST, ALL PLANTS, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, CORDAGE ETC . REQUIRED FOR PROPER EXECUTION OF WORK. (V) POWER AND WATER: THE ASSESSEE WAS TO BEAR THE C OST OF ALL WATER CONNECTIONS NECESSARY FOR EXECUTION OF WORK AND THE COST OF WATER CONSUME D. FURTHER IT WAS TO BEAR THE HIRE CHARGES OF METERS AND COST OF ELECTRICITY CONSUMED IN THE EXECUTION OF THE WORK. (VI) CONSTRUCTION ON SITE: THE ASSESSEE WAS REQUIRE D TO PROVIDE AND UPKEEP THE FOLLOWING FACILITIES. AN OFFICE FOR ENGINEER-IN-CHARGE, WITH FACILITIES L IKE OFFICE FURNITURE, TELEPHONE, AIR COOLER. FAN COMPUTER ETC. AT 3 LOCATIONS IN ADDITION TO ABOVE, SUITABLE TEMPORARY OFFICES ALONG THE SITE OF PIPE LAYING WORKS OFFICES WERE TO BE MAINTAINED BY THE ASSESSEE AND WERE TO BE REMOVED ON COMPLETION OF WORK. IN ADDITION TO THE ABOVE IT WAS TO ESTABLISH ITS OWN OFFICE NEAR THE SITE. IT WAS TO CONSTRUCT, YARD, GODOWN, STAFF QUARTERS ETC. FOR WHICH LAND WAS TO BE PROVIDED BY PHED. (VII) SAFETY AND SECURITY: THE ASSESSEE WAS RESPONS IBLE FOR THE SAFETY OF ALL PERSONS ON THE SITE. IT WAS TO PROVIDE NECESSARY FENCING, LIGHTING , GUARDING AND WATCHING OF THE WORKS UNTIL COMPLETION. IT WAS FURTHER RESPONSIBLE FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE, OFFICES, CAMPUS ETC. 46 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (VIII) COST OF INSPECTION AND TESTING: FOR ALL EQUI PMENTS AND MATERIALS REQUIRED FOR EXECUTION OF THE WORK, THE ARRANGEMENT FOR INSPECTI ON AND EXPENSES THERETO WAS TO BE BORNE BY THE ASSESSEE. FURTHER, THE ASSESSEE WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, DOCUMENTS AND OTHER INFORMATION, ELECTRICITY, EQUIPMENT, FUEL, CONSUMAB LES, ESTIMATES, LABOUR, MATERIALS, AND SUITABLY QUALIFIED AND EXPERIENCED STAFF NECESSARY TO CARRY OUT THE TESTS EFFICIENTLY. (IX) OTHERS: THE ASSESSEE WAS TO BEAR ALL COSTS AND CHARGES FO R SPECIAL AND/OR TEMPORARY RIGHTS OF WAY, WHICH HE MAY REQUIRE, INCLUDING THOSE FOR ACCE SS TO THE SITE ROYALTIES, QUARRY FEES, OCTROI AND OTHER TAXES IN RESPECT OF MATERIALS ACTUALLY CONSUMED ON PUBLIC WORK WAS TO BE BORNE BY THE ASSESSEE FURTHER, AS PER CLAUSE 43A ON PAGE 83, THE WORK A ND ALL THE MATERIALS, MACHINES, TOOLS AND PLANT, SCAFFOLDING, TEMPORARY BUILDINGS AND OTH ER THINGS CONNECTED THEREWITH WAS AT THE RISK OF THE ASSESSEE UNTIL THE WORK IS DELIVERE D TO THE ENGINEER-IN CHARGE. XII. TRIPLICANE PROJECT: RS. 36,75,545/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XII OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIALS REQUIRED FOR THE PROJECT: THE CONTRACTOR WAS RESPONSIBLE FOR PROCUREMENT OF QUANTITY OF MATERIAL LIKE PIPES, SPE CIAL MACHINERY, ELECTRICAL ITEMS ETC. (II) LABOUR: THE CONTRACTOR WAS REQUIRED TO MAKE IT S OWN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, FOR THEIR PAYMENT, HOUSING , FEEDING AND TRANSPORT. FURTHER HE WAS TO TAKE ADEQUATE PROVISIONS FOR THE SAFETY OF THE WORK MEN AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE EMPLOYEES (III) PLANT: ALL TOOLS AND PLANTS REQUIRED FOR THE WORK WAS TO SUPPLIED BY THE CONTRACTOR AT ITS OWN COST. (IV) POWER & WATER: THE CONTRACTOR WAS REQUIRED TO MAKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITEAND MAKE ITS OWN ARRANG EMENT OF WATER. (V) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED TO PROVIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED T O CONDUCT ALL THE SURVEYS REQUIRED FOR EXECUTION OF THE WORK. (VI) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIRED , AT HIS OWN EXPENSE, TO ERECT AND MAINTAIN TEMPORARY FENCES AND GATES ALONG THE BOUND ARIES. (VII) WATCHING AND LIGHTING: (VIII) TEMPORARY DIVERSION OF ROADS, CUSTOMARY VEHI CLE LICENSE AND PERMIT FEES: THE ASSESSEE WAS TO PAY CUSTOMARY VEHICLES LICENSE AND PERMIT FEES FOR USE OF PUBLIC ROADS. FURTHER, IT WAS TO MAKE AT ITS OWN COST, ALL THE NE CESSARY PROVISION FOR TEMPORARY DIVERSION OF ROADS, CART-TRACKS, FOOTPATHS, DRAINS, WATER COU RSES, CHANNELS ETC. XIII. K.K. NAGAR PROJECT: RS. 2,48,793/- 47 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XIII OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) . MATERIALS REQUIRED FOR THE PROJECT: THE CONTR ACTOR WAS RESPONSIBLE FOR PROCUREMENT OF REQUIRED QUANTITY OF MATERIAL LIKE PIPES, SPECIAL M ACHINERY, ELECTRICAL ITEMS ETC. (II) LABOUR: THE CONTRACTOR WAS REQUIRED TO MAKE IT S OWN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, FOR THEIR PAYMENT, HOUSING , FEEDING AND TRANSPORT. FURTHER HE WAS TO TAKE ADEQUATE PROVISIONS FOR THE SAFETY OF THE WORK MEN AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE EMPLOYEES (III) PLANT: ALL TOOLS AND PLANTS REQUIRED FOR THE WORK WAS TO SUPPLIED BY THE CONTRACTOR AT ITS IV) POWER & WATER: THE CONTRACTOR WAS REQUIRED TO M AKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITEAND MAKE ITS OWN ARRANG EMENT OF WATER. (V) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED TO PROVIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED T O CONDUCT ALL THE SURVEYS REQUIRED FOR EXECUTION OF THE WORK. (VI) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIRED , AT HIS OWN EXPENSE, TO ERECT AND MAINTAIN TEMPORARY FENCES AND GATES ALONG THE BOUND ARIES. (VII) WATCHING AND LIGHTING: (VIII) TEMPORARY DIVERSION OF ROADS, CUSTOMARY VEHI CLE LICENSE AND PERMIT FEES: THE ASSESSEE WAS TO PAY CUSTOMARY VEHICLES LICENSE AND PERMIT FEES FOR USE OF PUBLIC ROADS. FURTHER, IT WAS TO MAKE AT ITS OWN COST, ALL THE NE CESSARY PROVISION FOR TEMPORARY DIVERSION OF ROADS, CART-TRACKS, FOOTPATHS, DRAINS, WATER COU RSES, CHANNELS ETC. XIV. ANNAPONGA PROJECT: RS. 92,31,950/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XIV OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIALS REQUIRED FOR THE PROJECT: THE CONTRAC TOR WAS RESPONSIBLE FOR PROCUREMENT OF REQUIRED QUANTITY OF MATERIAL LIKE PIPES, SPECIAL M ACHINERY, ELECTRICAL ITEMS ETC. ANNEXURE (II) LABOUR: THE CONTRACTOR WAS REQUIRED TO MAKE IT S OWN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, FOR THEIR PAYMENT, HOUSING , FEEDING AND TRANSPORT. FURTHER HE WAS TO TAKE ADEQUATE PROVISIONS FOR THE SAFETY OF THE WORK MEN AGREEMENT AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE EMPLOYEES (III) PLANT: ALL TOOLS AND PLANTS REQUIRED FOR THE WORK WAS TO SUPPLIED BY THE CONTRACTOR AT ITS OWN COST. (IV) POWER & WATER: THE CONTRACTOR WAS REQUIRED TO MAKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITEAND MAKE ITS OWN ARRANG EMENT OF WATER. (V) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED TO PRO VIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED T O CONDUCT ALL THE SURVEYS REQUIRED FOR EXECUTION OF THE WORK. 48 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (VI) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIRED, AT HIS OWN EXPENSE, TO ERECT AND FENCES AND GATES ALONG THE BOUNDARIES. (VII) WATCHING AND LIGHTING: (VIII) TEMPORARY DIVERSION OF ROADS, CUSTOMARY VEHI CLE LICENSE AND PERMIT FEES: THE ASSESSEE WAS TO PAY CUSTOMARY VEHICLES LICENSE AND PERMIT FEES FOR USE OF PUBLIC ROADS. FURTHER, IT WAS TO MAKE AT ITS OWN COST, ALL THE NE CESSARY PROVISION FOR TEMPORARY DIVERSION OF ROADS, CART-TRACKS, FOOTPATHS, DRAINS, WATER COU RSES, CHANNELS ETC. XV. R. K. PURAM PROJECT: RS. 47,38,444/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XV OF THE PAPER BOOK, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWIN G CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) MATERIALS: THE ASSESSEE WAS TO PROVIDE, AT HIS OWN EXPENSE, ALL MATERIAL REQUIRED FOR THE WORK. FURTHER, IT WAS TO SUBMIT THE SAMPLES OF MATERIAL FOR TESTING, AT HIS RISK AND COST. (II) LABOUR: THE ASSESSEE WAS RESPONSIBLE FOR THE P AYMENTS DUE TO THE LABOURERS EMPLOYED FOR WORK. FURTHER, IT WAS TO PROVIDE THE FOLLOWING LABOUR AMENITIES LABOUR CAMPS WATER SUPPLY ARRANGEMENT FOR DISPOSAL OF EXCRETA DRAINAGE SANITATION IN ADDITION TO LABOUR, THE ASSESSEE WAS TO HIRE TEC HNICAL STAFF AND EMPLOYEES TO PROVIDE NECESSARY SUPERINTENDENCE (III) PLANT & MACHINERY: THE ASSESSEE WAS TO ARRANG E AT ITS OWN COST ALL THE PLANT & MACHINERY REQUIRED FOR THE WORK. (IV) WATER: THE ASSESSEE WAS TO MAKE HIS OWN ARRANG EMENTS OF WATER REQUIRED FOR WORK. (V) ELECTRICITY: THE CHARGES PERTAINING TO ELECTRIC SUPPLY INCLUDING INSTALLATION OF TEMPORARY CONNECTION, INCLUDING THE COST OF MAKING ELECTRIC SUB-STATION IF NEEDED, LAYING CABLES WHEREVER NECESSARY UPTO THE METER FROM THE B SES POLE AND FROM METER UP TO ACTUAL CONSUMPTION POINT, AND THE COST OF ELECTRICITY WAS TO BE BORNE BY THE ASSESSEE. XVI. MIRA BHAYANDAR PROJECT: RS. 17,67,69,134/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XVI OF THE PAPER BOOK, SUBMITTED BEFORE THE LD.CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: AT THE OUTSET, IT IS SUBMITTED THAT PART-I OF THE C ONDITIONS OF THE CONTRACT PREPARED BY THE 'FEDERATION INTERNATIONALE DES INGENIEURS- CONSEILS (FIDIC) 'CONSTITUTETHE GENERAL CONDITIONS FOR THE AFORESAID PROJECT. THE SAID COND ITIONS HAVE BEEN DISCUSSED IN ANNEXURE VII. SOME OF THE SAID CONDITIONS HAVE BEEN DISCUSSE D BELOW: 49 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (I) STAFF & LABOUR: THE ASSESSEE WAS TO MAKE ITS OW N ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, LOCAL OR OTHERWISE, AND FOR T HEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. IT WAS TO PROVIDE AND MAINTAIN ALL NECESSARY ACCOMM ODATION AND WELFARE FACILITIES FOR ITS PERSONNEL. FURTHER IT WAS TO TAKE ALL REASONABLE PR ECAUTIONS TO MAINTAIN HEALTH AND SAFETY OF ITS PERSONNEL. IT WAS TO PROVIDE THE NECESSARY SUPERINTENDENCE TO PLAN, ARRANGE, DIRECT, MANAGE, INSPECT AND TEST THE WORK. (II) PLANT & MATERIALS: THE ASSESSEE WAS TO CARRY O UT THE MANUFACTURE OF PLANT, THE PRODUCTION OF MATERIALS REQUIRED FOR THE WORK. (III) SAFETY & SECURITY: THE ASSESSEE WAS TO TAKE C ARE OF THE SAFETY OF ALL PERSONS ENTITLED TO BE ON THE SITE. IT WAS TO PROVIDE NECESSARY FENCING , LIGHTING, GUARDING AND WATCHING OF THE WORKS UNTIL COMPLETION THE ASSESSEE WAS EVEN RESPONSIBLE FOR THE SECURITY OF SITE AND FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE. (IV) RIGHTS OF WAY: THE ASSESSEE WAS TO BEAR ALL CO STS AND CHARGES FOR SPECIAL AND/OR TEMPORARY RIGHTS-OF-WAY WHICH MAY BE REQUIRED FOR A CCESS TO THE SITE (V) TESTING: IT WAS TO PROVIDE ALL APPARATUS, ASSIS TANCE, DOCUMENTS AND OTHER INFORMATION, ELECTRICITY, EQUIPMENT, FUEL, CONSUMABLES, INSTRUME NTS, LABOUR, MATERIALS, AND SUITABLY QUALIFIED AND EXPERIENCED STAFF NECESSARY TO CARRY OUT THE TESTS EFFICIENTLY. (VI) ELECTRICITY& WATER: THE ASSESSEE WAS RESPONSIB LE FOR PROVISION OF ALL POWER, WATER AND OTHER SERVICES REQUIRED FOR WORK. SOME OF THE PARTICULAR CONDITIONS OF THE CONTRACT A S DISCUSSED IN ANNEXURE XVI HAVE BEEN DISCUSSED: (VII)DESIGN: THE ASSESSEE WAS TO CARRY OUT AND BE R ESPONSIBLE FOR THE DESIGN OF THE WORKS, INCLUDING ANY SITE SURVEYS, SUBSOIL INVESTIGATIONS, MATERIALS TESTING, AND ALL THE OTHER THINGS NECESSARY FOR PROPER PLANNING AND DESIGN. XVII. SAWAIMADHOPUR PROJECT: RS. 1,14,41,000/- THE AGREEMENT FOR THE AFORESAID PROJECT HAD BEEN EN CLOSED AS ANNEXURE XIII OF PAPER BOOK FOR AY 2007-08, SUBMITTED BEFORE THE LD. CIT(A). TH E FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGN: THE ASSESSEE WAS RESPONSIB LE FOR THE DESIGN OF THE WORKS AND THE ACCURACY OF SUCH DESIGNS. IT WAS REQUIRED TO CARRY OUT THE PREPARATORY WORKS SUCH AS TOPOGRAPHIC SURVEY, SOIL INVESTIGATIONS, GEOTECHNICAL INVESTIGATIONS ETC. TO PREPARE THE PLANS, L-SECTIONS, DESIGNS, WORKING DRAWINGS ETC. (II) MATERIALS: THE ASSESSEE WAS RESPONSIBLE FOR AR RANGEMENT OF ALL MATERIALS REQUIRED FOR PROPER EXECUTION OF WORK. 50 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (III) LABOUR: THE ASSESSEE WAS RESPONSIBLE FOR PAYI NG WAGES TO LABOURERS ON THE WORK. FURTHER, THE ASSESSEE WAS REQUIRED TO ENGAGE TECHNI CAL STAFF AS PER CLAUSE 39 ON PAGE 56. IT WAS EVEN REQUIRED TO HIRE SUPERVISORY STAFF LIKE CO NTRACT MANAGERS, SENIOR MANAGERS ETC. ON THE SITE SO AS TO ENSURE THE WORK QUALITY. (IV) PLANT: THE ASSESSEE WAS REQUIRED TO ARRANGE AN D SUPPLY AT ITS OWN COST, ALL PLANTS, TOOLS, APPLIANCES, IMPLEMENTS, LADDERS, CORDAGE ETC . REQUIRED FOR PROPER EXECUTION OF WORK. (V) POWER AND WATER: THE ASSESSEE WAS TO BEAR THE C OST OF ALL WATER CONNECTIONS NECESSARY FOR EXECUTION OF WORK AND THE COST OF WATER CONSUME D. FURTHER IT WAS TO BEAR THE HIRE CHARGES OF METERS AND COST OF ELECTRICITY CONSUMED IN THE EXECUTION OF THE WORK. (VI) CONSTRUCTION ON SITE: THE ASSESSEE WAS REQUIRE D TO PROVIDE AND UPKEEP THE FOLLOWING FACILITIES AN OFFICE BUILDING AT 5 LOCATIONS OF FLOOR AREA NOT LESS THAN 50 SQUARE METER EACH, WITH PROVISION OF TOILETS AND PANTRY. THE BUILDING WAS T O BE EQUIPPED WITH FURNITURE, ELECTRICITY, TELEPHONE, AIR COOLER, FAN, COMPUTER, PRINTER ETC. IN ADDITION TO ABOVE, SUITABLE TEMPORARY OFFICES AL ONG THE SITE OF PIPE LAYING WORKS OFFICES WERE TO BE MAINTAINED BY THE ASSESSEE AND WERE TO B E REMOVED ON COMPLETION OF WORK. (VII) SAFETY AND SECURITY: THE ASSESSEE WAS RESPONS IBLE FOR THE SAFETY OF ALL PERSONS ON THE SITE. IT WAS TO PROVIDE NECESSARY FENCING, LIGHTING , GUARDING AND WATCHING OF THE WORKS UNTIL COMPLETION. IT WAS FURTHER RESPONSIBLE FOR KEEPING UNAUTHORISED PERSONS OFF THE SITE, OFFICES, CAMPUS ETC. (VIII) COST OF INSPECTION AND TESTING: FOR ALL EQUI PMENTS AND MATERIALS REQUIRED FOR EXECUTION OF THE WORK, THE ARRANGEMENT FOR INSPECTI ON AND EXPENSES THERETO WAS TO BE BORNE BY THE ASSESSEE. FURTHER, THE ASSESSEE WAS TO PROVIDE ALL APPARATUS, ASSISTANCE, DOCUMENTS AND OTHER INFORMATION, ELECTRICITY, EQUIPMENT, FUEL, CONSUMAB LES, ESTIMATES, LABOUR, MATERIALS, AND SUITABLY QUALIFIED AND EXPERIENCED STAFF NECESSARY TO CARRY OUT THE TESTS EFFICIENTLY. (IX) OTHERS: THE ASSESSEE WAS TO INSTITUTE A QUALITY ASSURANCE SYSTEM TO DEMONSTRATE COMPLIANCE WITH REQUIREMENTS OF THE CONTRACT. THE ASSESSEE WAS TO BEAR ALL COSTS AND CHARGES FO R SPECIAL AND/OR TEMPORARY RIGHTS OF WAY, WHICH HE MAY REQUIRE, INCLUDING THOSE FOR ACCE SS TO THE SITE ROYALTIES, QUARRY FEES, OCTROI AND OTHER TAXES IN RESPECT OF MATERIALS ACTUALLY CONSUMED ON PUBLIC WORK WAS TO BE BORNE BY THE ASSESSEE XVIII. KERALA MEENAD PROJECT: RS. 2,25,71,172 & KER ALA PUTTUVAM PROJECT: RS. 3,21,33,655 /- THE AGREEMENT BETWEEN THE ASSESSEE AND KERALA WATER AUTHORITY, FOR THE AFORESAID PROJECTS HAD BEEN ENCLOSED AS ANNEXURE X OF PAPER B OOK FOR AY 2007-08 SUBMITTED BEFORE 51 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. THE LD. CIT(A). THE FOLLOWING CONDITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTR ACTOR: (I)ATTENTION IS FIRSTLY INVITED TO CLAUSE 8(PAGE 6) (GENERAL OBLIGATIONS) OF THE AGREEMENT EXTRACTS OF WHICH HAS BEEN PRODUCED BELOW: '8.1 THE CONTRACTOR SHALL, WITH DUE CARE AND DILIGE NCE, DESIGN (TO THE EXTENT PROVIDED FOR BY THE CONTRACT), EXECUTE AND COMPLETE THE WORKS AND R EMEDY ANY DEFECTS THEREIN IN ACCORDANCE WITH THE PROVISIONS OF THE CONTRACT. THE CONTRACTOR SHALL PROVIDE ALL SUPERINTENDENCE, LABOUR, MATERIALS, PLANT, CONTRACT OR'S EQUIPMENT AND ALL THE OTHER THINGS, WHETHER OF A TEMPORARY OR PERMANENT NATURE, REQUIRE D IN AND FOR SUCH DESIGN, EXECUTION, COMPLETION AND REMEDYING OF ANY DEFECTS, SO FAR AS THE NECESSITY FOR PROVIDING THE SAME IS SPECIFIED IN OR IS REASONABLY TO BE INFERRED FROM T HE CONTRACT' FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE WAS NO T MERELY PROVIDING LABOUR UNDER THE CONTRACT. IN ADDITION TO LABOUR IT WAS REQUIRED TO MAKE ALL ARRANGEMENTS INCLUDING MATERIALS, EQUIPMENT, SUPERINTENDENCE AND ANY OTHER THING REQUIRED FOR COMPLETION OF THE WORK. (II) SUBMISSION OF PROGRAMME AND ESTIMATION OF CASH FLOWS: UNDER CLAUSE 14.1 (PAGE NO. 8) THE ASSESSEE WAS REQUIRED TO SUBMIT A DETAILED PROG RAMME FOR THE EXECUTION OF THE WORKS. FURTHER UNDER CLAUSE 14.3, IT WAS REQUIRED TO PROVI DE THE ENGINEER A DETAILED CASH FLOW ESTIMATE QUARTERLY PERIODS. AS PER CLAUSE 14.4, SUB MISSION OF THE PROGRAMME AND ITS APPROVAL BY THE ENGINEER, DID NOT RELIEVE THE ASSES SEE OF ITS DUTIES AND RESPONSIBILITIES (III) SUPERINTENDENCE: THE ASSESSEE WAS TO PROVIDE ALL NECESSARY SUPERINTENDENCE DURING THE EXECUTION OF WORKS. (IV) LABOUR: UNDER CLAUSE 34.1 (PAGE 15), THE ASSES SEE WAS REQUIRED TO MAKE HIS OWN ARRANGEMENTS FOR THE ENGAGEMENT OF ALL STAFF AND LA BOUR, LOCAL OR OTHER, AND FOR THEIR PAYMENT, HOUSING, FEEDING AND TRANSPORT. (V) TESTING OF MATERIALS AND PLANT: IN ADDITION TO PROVISION OF SPECIFIED PLAN! AND MATERIAL, THE ASSESSEE WAS REQUIRED TO PROVIDE ASSISTANCE, LA BOUR, ELECTRICITY, FUELS, STORES, APPARATUS AND INSTRUMENTS AS ARE NORMALLY REQUIRED FOR EXAMIN ING, MEASURING AND TESTING ANY MATERIALS OR PLANTS. (CLAUSE 36.1, PAGE 15). THE CO ST OF MAKING THE TEST WAS TO BE BORNE BY THE ASSESSEE (CLAUSE 36.2 AND 36.3) (VI) SAFETY, SECURITY AND PROTECTION OF THE ENVIRON MENT: UNDER CLAUSE 19.1 (B) (PAGE 9) THE ASSESSEE WAS REQUIRED TO PROVIDE AND MAINTAIN AT HI S OWN COST ALL LIGHTS, GUARDS, FENCING, WARNING SIGNS AND WATCHING, WHEN OR WHERE NECESSARY . FURTHER UNDER PARA (C), IT WAS TO TAKE ALL THE STEPS TO PROTECT THE ENVIRONMENT. (VII)ROYALTY: THE ASSESSEE WAS REQUIRED TO PAY ALL TONNAGE AND OTHER ROYALTIES, RENT AND OTHER PAYMENTS OR COMPENSATION, IF ANY, FOR GETTING STONE, SAND, GRAVEL, CLAY OR OTHER MATERIALS REQUIRED FOR THE WORK (CLAUSE 28.2, PAGE 13) (VIII) IMPROVEMENT OF ROADS ETC.: UNDER CLAUSE 30.2 (PAGE 14), THE ASSESSEE WAS RESPONSIBLE FOR PAYING THE COST OF STRENGTHENING AN Y BRIDGES OR IMPROVING ANY ROAD COMMUNICATING WITH OR ON THE ROUTES TO THE SITE TO FACILITATE THE MOVEMENT OF EQUIPMENT AND OTHER TEMPORARY WORKS. 52 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. XIX. SONTHI PROJECT: RS. 1,38,57,817/- THE AGREEMENT BETWEEN THE ASSESSEE AND KRISHNA BHAG YAJALA NIGAM LIMITED FOR THE AFORESAID PROJECT HAD BEEN ENCLOSED AS ANNEXURE I O F PAPER BOOK FOR AY 2007-08, SUBMITTED BEFORE THE LD. CIT(A). THE FOLLOWING COND ITIONS LISTED IN THE AGREEMENT CLEARLY ESTABLISH THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR: (I) DRAWINGS AND DESIGNS OF TEMPORARY WORKS: THE AS SESSEE WAS RESPONSIBLE FOR THE DRAWING AND DESIGN OF TEMPORARY WORKS. IT WAS REQUI RED TO SUBMIT THE SAID DRAWINGS TO THE ENGINEERS AND OBTAIN HIS APPROVAL BEFORE STARTING S UCH WORK. (II) MATERIALS REQUIRED FOR THE PROJECT: THE CONTRA CTOR WAS RESPONSIBLE FOR PROCUREMENT OF REQUIRED QUANTITY OF PIPES, SPECIAL MACHINERY, ELEC TRICAL ITEMS ETC. (III) LABOUR: THE CONTRACTOR WAS REQUIRED TO MAKE I TS OWN ARRANGEMENT FOR THE ENGAGEMENT OF ALL STAFF AND LABOUR, FOR THEIR PAYMENT, HOUSING , FEEDING AND TRANSPORT. FURTHER HE WAS TO TAKE ADEQUATE PROVISIONS FOR THE SAFETY OF THE WORK MEN AND MAINTAIN ADEQUATE SANITARY FACILITIES FOR THE EMPLOYEES (IV)PLANT:ALL TOOLS AND PLANTS REQUIRED FOR THE WOR K WAS TO SUPPLIED BY THE CONTRACTOR AT ITS OWN COST (V) POWER & WATER: THE CONTRACTOR WAS REQUIRED TO M AKE ITS OWN ARRANGEMENT FOR ELECTRICITY REQUIRED AT SITEAND MAKE ITS OWN ARRANG EMENT OF WATER. (VI) SURVEY STATIONS: THE CONTRACTOR WAS REQUIRED T O PROVIDE AND MAINTAIN AT ITS OWN EXPENSE, SURVEY STATIONS. HE WAS FURTHER REQUIRED T O CONDUCT ALL THE NECESSARY SURVEYS. (VII) TEMPORARY FENCING: THE CONTRACTOR WAS REQUIRE D, AT HIS OWN EXPENSE, TO ERECT AND MAINTAIN TEMPORARY FENCES AND GATES ALONG THE BOUND ARIES. (VIII) ROYALTY: THE CONTRACTOR WAS TO PAY ALL FEES, ROYALTIES, OCTROI DUES LEVIED BY THE STATE GOVERNMENT OR ANY OTHER LOCAL BODY 4.2 FROM THE PERUSAL OF THE TERMS AND CONDITIONS OF ALL THE AGREEMENTS (ABOVE), IT IS CLEAR THAT IT IS NOT A CASE WHERE THE ASSESSEE WAS PROVID ED WITH THE ESTABLISHMENT AND MATERIALS REQUIRED TO EXECUTE THE WORK, WHICH HAPPENS IN CASE OF WORKS CONTRACT WHERE THE CONTRACTOR GETS THE MATERIAL AND OTHER REQUISITES F ROM THE CLIENT AND ALL HE HAS TO DO IS EMPLOY LABOUR. THE ASSESSEE IN THE GIVEN CASE WAS T O PROCURE RAW MATERIAL, MAKE ARRANGEMENTS FOR POWER, WATER, PLANT MACHINERY ETC. , AND CONDUCT ALL THE OTHER ACTIVITIES NEEDED FOR CONSTRUCTION. 4.3 HENCE IN THE LIGHT OF THE DISCUSSION IN PARAS 2 AND 3 THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80-IA OF THE ACT. 5.1 IN ADDITION TO THE ABOVE, THE ASSESSEE WAS EVEN RESPONSIBLE FOR OPERATIONS AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY, IN THE FOLLOWING CASES: IN ADDITION TO THE ABOVE, THE ASSESSEE WAS EVEN RES PONSIBLE FOR OPERATIONS AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY, IN THE FOLLOWING CA SES: JAWAIPALI PROJECT (ANNEXURE I) -SCOPE OF WORK ON PAGE 1 INCLUDES OPERATIONS AND MAINTENANCE. THE 0 & M PERIOD WAS 5 YEARS. 53 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. WAZIRABAD PROJECT (ANNEXURE-II): SCOPE OF WORK IN CLUDES WATCH & WARD, PATROLLING AND MAINTENANCE OF PIPE LINE AND OTHER APPURTENANCES ET C. FOR A PERIOD OF 12 MONTHS. RITHALA PROJECT (ANNEXURE ILL): SCOPE OF WORK ON PAGE 1 INCLUDES OPERATIONS AND MAINTENANCE FOR A PERIOD OF 5 YEARS CHENNAI CORPORATION (ANNEXURE IV):THE ASSESSEE WA S TO MAINTAIN THE WORK EXECUTED BY IT FOR A SPECIFIED PERIOD. JAMUI PROJECT (ANNEXURE V): O&M OF 1 YEAR. RANGAJAPURAM PROJECT (ANNEXURE VI): AS PER PARA 4 -11 ON PAGE 1, THE ASSESSEE WAS TO MAINTAIN THE WORKS FOR A SPECIFIED PERIOD. USMANPUR PROJECT (ANNEXURE VII): SCOPE OF WORK ON PAGES 2-3 INCLUDES OPERATION AND MAINTENANCE T.K.HALLY PROJECT (ANNEXURE IX): 0& M OF 1 YEAR POKHARAN PROJECT (ANNEXURE-XI): SCOPE OF WORK INCLUDE OPERATION AND MAINTENANCE OF 5 YEARS ANNAPONGA PROJECT (ANNEXURE XIV): MIRA BHAYANDAR PROJECT (ANNEXURE XVI): SCOPE OF W ORK ON PAGE 7 INCLUDES OPERATION AND MAINTENANCE. V SONTHI PROJECT (ANNEXURE-I)- SCOPE OF WORK ON P AGE 12 INCLUDES OPERATING THE SYSTEM FOR 2 YEARS. KERALA PUTTUVAM AND MEENAD PROJECTS SAWAIMADHOPUR PROJECT (ANNEXURE XIII):PARTICULARS OF WORK ON PAGE 6 INCLUDES MAINTENANCE & OPERATION FOR 5 YEARS. BASED ON THESE SUBMISSIONS, THE ASSESSEE PLEADED TH AT IT WAS A DEVELOPER AND NOT A MERE WORKS CONTRACTOR AND HENCE WAS OUTSIDE THE PURVIEW OF EXPLANATION TO SECTION 80IA(13) OF THE ACT. FURTHER IN ADDITION TO DEVELOPING THE INFRASTRUCTURE FACILITY, THE ASSESSEE WAS EVEN OPERATING AND MAINTAINING THE SAME. ACCORDINGL Y IT WAS PLEADED EVEN AFTER THE AMENDMENT IN FINANCE ACT 2009 , THE ASSESSEE IS ENT ITLED TO DEDUCTION U/S 80IA OF THE ACT. 3.5. THE LD CITA FOR DETAILED REASONING GIVEN BY H IM IN THE APPELLATE ORDER FOR THE ASST YEAR 2009-10 DATED 18.3.2013 AFTER DUE APPRECIATION OF THE FACTS AND SUBMISSIONS OF THE ASSESSEE HELD THAT THE ASSESSEE IS A DEVELOPER AND HAD FULFILLED ALL THE REQUIREMENTS FOR CLAIMING DEDUCTION U/S 80IA OF THE ACT AND THEREFOR E IS ELIGIBLE FOR DEDUCTION UNDER THE SAID SECTION. AGGRIEVED, THE REVENUE IS IN APPEA L BEFORE US. 54 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. 4. THE LD DR VEHEMENTLY RELIED ON THE ORDER OF THE LD AO AND FURTHER PLACED RELIANCE ON THE CBDT CIRCULAR NO. 3 OF 2008 DATED 12.3.2008 IN PARA 34 WHEREIN IT HAD BEEN SPECIFICALLY STATED THAT THE INCENTIVE HAD ALL ALON G BEEN INTENDED TO BENEFIT DEVELOPERS WHO UNDERTAKE ENTREPRENEURIAL AND INVESTMENT RISK AND N OT CONTRACTORS WHO ONLY UNDERTAKE BUSINESS RISK. HE EXPLAINED THE MEANING OF EACH AND EVERY TERM USED IN THE SAID CIRCULAR SUCH AS (I) PRIVATE SECTOR PARTICIPATION BY REFERR ING TO DEFINITION GIVEN IN OECD MEANING CAPITAL TO BE DEPLOYED BY THE PRIVATE SEC TOR ; (II) BY WAY OF INVESTMENTS MEANING OWNERSHIP OF ASSETS OR SOME RIGHT FOR SUB STANTIAL PERIOD OF TIME ; (III) CIVIL CONSTRUCTION WORK WHICH IS A SEGMENT OF BROADER CONSTRUCTION INDUSTRY ; (IV) ENTREPRENEURIAL AND INVESTMENT RISK WHICH REFERS TO RATE OF RETURN ON CAPITAL EMPLOYED ; (V) CONTRACTORS ARE PERSONS WHO TAKE ONLY BUSINES S RISK. HE ARGUED FURTHER THAT CENTRAL PUBLIC WORKS DEPARTMENT (CPWD) DOES THE ENTIRE DES IGNING WORK AND NOT THE ASSESSEE. THE ASSESSEE CONTRACTOR EXITS FROM THE PROJECT WITH IN A SHORT SPAN OF TIME , WHEREAS AN INVESTOR WOULD REMAIN FOR A LONG TIME AND THATS WH Y THE LEGISLATURE HAD INTENDED TO GIVE BENEFIT FOR 10 YEARS AS TAX HOLIDAY PERIOD . HE ST ATED THAT SINCE THE TERMS WORKS CONTRACT IS NOT DEFINED IN THE IT ACT, 2961, THE LD AO HAD RIGHTLY RELIED ON THE MEANING OF THE TERMS WORKS CONTRACT AS DEFINED UNDER CENTRAL SAL ES TAX ACT AND WEST BENGAL VALUE ADDED TAX ACT, 2003, WHEREIN WORKS CONTRACT MEANS CONTRACT FOR CARRYING OUT ANY WORK WHICH INCLUDES ASSEMBLING, CONSTRUCTION, BUILDING, ALTERING, MANUFACTURING, PROCESSING, FABRICATING, ERECTION, INSTALLATION, FITTING OUT, I MPROVEMENT, REPAIR OR COMMISSIONING OF ANY MOVABLE OR IMMOVABLE PROPERTY. ACCORDINGLY HE ARG UED THAT ALL THE WORKS EXECUTED BY THE ASSESSEE FALLS UNDER A WORKS CONTRACT. HE ARGU ED FURTHER THAT EVEN THE BORROWINGS MADE BY THE ASSESSEE FOR THE PROJECT IS ONLY BUSINE SS RISK AND NOT INVESTMENT RISK. 5. IN RESPONSE TO THIS, THE LD AR VEHEMENTLY RELIED ON THE FINDINGS AND OBSERVATIONS GIVEN IN THE ORDER OF THE LD CITA VIDE PARA 7 TO 7.8 THER EIN. HE STATED THAT THE ASSESSEE HAD HEAVILY INVESTED MONIES IN THE IMPLEMENTATION OF TH E INFRASTRUCTURE PROJECT BOTH OUT OF OWN AS WELL AS BORROWED FUNDS WHICH CLEARLY PROVES THAT THE ASSESSEE HAD TAKEN INVESTMENT RISK. THE AGREEMENTS ENTERED INTO FOR E ACH PROJECT CLEARLY PROVES THAT THE DESIGNING AND DRAWING IS TO BE DONE ONLY BY THE ASS ESSEE AND NOT BY CPWD AS WRONGLY 55 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. POINTED OUT BY THE LD DR. HE FURTHER STATED THAT T HE ISSUE UNDER DISPUTE IS SQUARELY COVERED BY THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASST YEARS 2006-07 AND 2009-10 IN ITA NOS. 1291-1292/KOL/2013 DATED 24 .8.2016 . APART FROM THIS, HE ALSO PLACED RELIANCE ON PLETHORA OF CASE LAWS ON THE IMP UGNED SUBJECT WHICH ARE PART OF THE PAPER BOOK COMPRISING OF COMPILATION OF CASE LAWS S UBMITTED BY HIM. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOKS FILED BY THE ASSESSEE. W E FIND THAT THE PROVISIONS OF SECTION 80IA OF THE ACT APPLIES TO THE ENTERPRISE CARRYING ON THE BUSINESS OF (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPER ATING AND MAINTAINING , ANY INFRASTRUCTURE FACILITY SUBJECT TO FULFILLMENT OF C ERTAIN CONDITIONS STIPULATED THEREIN. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS A COMPANY AND H AD ENTERED INTO AGREEMENTS WITH VARIOUS GOVERNMENT BODIES FOR DEVELOPMENT OF INFRASTRUCTURE PROJECTS. THE SHORT POINT THAT ARISES FOR CONSIDERATION IS WHETHER THE WORKS CARRIED OUT BY THE ASSESSEE WOULD ENABLE IT TO BE CLASSIFIED AS A DEVELOPER OR A WORKS CONTRACTOR SO AS TO FALL WITHIN THE MISCHIEF OF EXPLANATION TO SECTION 80IA(13) OF THE ACT. ACCORDI NG TO LD AO, THE INVESTMENTS WERE MADE BY THE GOVERNMENT AUTHORITIES BECAUSE THE ASSE SSEE WAS RECEIVING PAYMENTS IN PROGRESS OF THE WORKS ON MEASUREMENT. NOW THE RELE VANT POINT THAT WOULD ARISE IS AS TO WHAT CONSTITUTES A WORKS CONTRACT. SECTION 80IA OF THE ACT NO WHERE DEFINES THE TERM WORKS CONTRACT AND HENCE THE NATURAL MEANING OF T HE WORDS SHALL APPLY. (A) AS PER THE OXFORD DICTIONARY , THE TERM WORK MEANS APPLICATION OF EFFORT TO A PURPOSE OR USE OF ENERGY. THUS GOING BY THE OXFORD DICTION ARY, A WORKS CONTRACT IS A CONTRACT WHICH INVOLVES EFFORT OR IN OTHER WORDS LABOUR OF T HE CONTRACTOR. (B) FURTHER AS PER THE BLACK LAWS DICTIONARY , THE TERM WORK MEANS LABOUR OR IN OTHER WORDS PHYSICAL AND MENTAL EXERTION TO ATTAIN AN END ESP. AS CONTROLLED BY AND FOR THE BENEFIT OF THE EMPLOYER. THUS AS PER BLACK LAWS D ICTIONARY ALSO, A WORKS CONTRACT IS A LABOUR CONTRACT UNDER WHICH THE CONTRACTOR MERELY E MPLOYS HIS LABOUR AS PER THE DIRECTIONS OF THE CONTRACTEE. (C) WE FIND THAT THE TERM WORK IS DEFINED IN SECTION 194C OF THE ACT AS UNDER :- 56 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. (IV) WORK SHALL INCLUDE: (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCTION O F PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; (C ) CARRIAGE OF GOODS OR PASSENGERS BY ANY MO DE OF TRANSPORT OTHER THAN BY RAILWAYS; (D) CATERING; (C) MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF THE CUSTOMER BY USING MATERIAL PURCHASED FROM SUCH CUSTOMER, BUT DOES NOT INCLUDE MANUFACTURING OR SUPPLYING A P RODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCH ASED FROM A PERSON, OTHER THAN SUCH CUSTOMER . THUS AS PER SECTION 194C OF THE ACT ALSO, WORKS CO NTRACT; DOES NOT INCLUDE A CONTRACT WHEREIN THE CONTRACTOR IN ADDITION TO EMPLOYING LAB OUR, PROCURES MATERIAL FROM A THIRD PARTY. THUS CONTRACTS INVOLVING MERE LABOUR OF THE CONTRACTOR ARE INCLUDED IN THE PURVIEW OF WORKS CONTRACT. (D) THE HONBLE SUPREME COURT IN THE CASE OF ASSOCIATED CEM ENT CO. LTD VS CIT REPORTED IN 201 ITR 435 (SC) HAD INTERPRETED THE TERM WORK AS BELOW:- NO AMBIGUITY IS FOUND IN THE LANGUAGE EMPLOYED IN S ECTION 194C( 1 ). ON PLAIN READING OF SAID SECTION, WHAT IS CONTAINED IN THE SUB-SECTION, ADMITS OF THE FOLLOWING FORMULATIONS: ( 1 ) A CONTRACT MAY BE ENTERED INTO BETWEEN THE CONTRA CTOR AND ANY OF THE ORGANISATIONS SPECIFIED IN THE SUB-SECTION. ( 2 ) CONTRACT IN FORMULATION COULD NOT ONLY BE FOR CAR RYING OUT ANY WORK BUT ALSO FOR SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK. ( 3 ) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO A CO NTRACTOR IN PURSUANCE OF THE CONTRACT IN FORMULATIONS 1 AND 2, COULD CREDIT THAT SUM TO HIS ACCOUNT OR MAKE ITS PAYMENT TO HIM IN ANY OTHER MANNER. ( 4 ) BUT WHEN THE PERSON REFERRED TO IN FORMULATION 3 EITHER CREDITS THE SUM REFERRED TO THEREIN TO THE ACCOUNT OF OR PAYS IT TO THE CONTRAC TOR, HE SHALL DEDUCT OUT OF THAT SUM AN AMOUNT EQUAL TO TWO PER CENT AS INCOME-TAX ON INCOM E COMPRISED THEREIN. THUS, WHEN THE PERCENTAGE AMOUNT REQUIRED TO BE DED UCTED UNDER THE SUBSECTION AS INCOME-TAX IS ON THE SUM CREDITED TO THE ACCOUNT OF OR PAID TO A CONTRAC TOR IN PURSUANCE OF A CONTRACT FOR CARRYING OUT A WORK OR SUPPLYING LAB OUR FOR CARRYING OUT A WORK OF ANY OF THE ORGANISATIONS SPECIFIED THEREIN, THERE IS NOTHI NG IN THE SUB-SECTION ON THE BASIS OF WHICH IT COULD BE HELD THAT THE CONTRACT TO CARRY O UT A WORK OR THE CONTRACT TO SUPPLY LABOUR TO CARRY OUT A WORK SHOULD BE CONFINED TO 'W ORKS CONTRACT' AS WAS ARGUED ON BEHALF OF THE ASSESSEE. THERE IS NO REASON TO CURTAIL OR T O CUT DOWN THE MEANING OF PLAIN WORDS USED IN THE SECTION. 'ANY WORK' MEANS ANY WORK AND NOT A 'WORKS CONTRACT' WHICH HAS A SPECIAL CONNOTATION IN THE TAX LAW. INDEED, IN THE SUB-SECTION, THE 'WORK' REFERRED TO THEREIN EXPRESSLY INCLUDES SUPPLY OF LABOUR TO CARRY OUT A WORK. IT IS A CLEAR INDICATION OF THE 57 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. LEGISLATURE THAT THE 'WORK' IN SUB-SECTION IS NOT I NTENDED TO BE CONFINED OR RESTRICTED TO WORKS CONTRACT. 'WORK' ENVISAGED IN SECTION 194C( 1 ), THEREFORE, HAS A WIDE IMPORT AND COVERS ANY WORK WHICH ONE OR THE OTHER OF THE ORGAN ISATION SPECIFIED IN THE SUB-SECTION CAN GET CARRIED OUT THROUGH A CONTRACTOR UNDER A CO NTRACT AND FURTHER IT INCLUDES OBTAINING BY WAY OF SUCH ORGANISATIONS SUPPLY OF LABOUR UNDER A CONTRACT WITH A CONTRACTOR FOR CARRYING OUT ITS WORK WHICH SHOULD HAVE FALLEN OUTS IDE THE 'WORK' BUT FOR ITS SPECIFIC INCLUSION IN THE SUBSECTION. THE ISSUE BEFORE THE HONBLE SUPREME COURT WAS WHET HER THE TERM WORK USED IN SECTION 194C OF THE ACT NEEDS TO BE RESTRICTED TO WORKS CO NTRACT. THE APEX COURT LAID OUT THAT THE TERM WORK USED IN SECTION 194C OF THE ACT NEE D NOT BE RESTRICTED TO WORKS CONTRACT BECAUSE THE SUBSECTION EXPRESSLY INCLUDES SUPPLY OF LABOUR TO CARRY OUT WORK. IN OTHER WORDS, IT IS IMPLIED THAT WORKS CONTRACT MEANS SUPP LY OF LABOUR TO CARRY OUT WORK. THUS FROM THE ABOVE, IT COULD BE SAFELY CONCLUDED THAT T HE WORKS CONTRACT CONSTITUTES A CONTRACT UNDER WHICH THE CONTRACTOR IS MERELY EMPLOYING HIS EFFORTS OR LABOUR. UNDER SUCH A CONTRACT, THE CONTRACTEE PROVIDES THE MATERIAL AND OTHER REQUISITES ( A COMPLETE INFRASTRUCTURE) NEEDED TO CARRY OUT THE DESIRED WOR K TO THE CONTRACTOR WHO BY APPLYING HIS LABOUR TO THE SAID MATERIAL TURNS THE MATERIAL INTO A DESIRED PRODUCT. (E) IT WOULD BE PERTINENT TO GET INTO THE MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINANCE BILL 2007 REPORTED IN (2007) 289 ITR (ST.) 292 AT PAGE 312, WHICH READS AS UNDER :- SECTION 80IA , INTER ALIA, PROVIDES FOR A TEN YEAR BENEFIT TO AN ENTERPRISE OR AN UNDERTAKING ENGAGED IN DEVELOPMENT OF INFRASTRUCTUR E FACILITIES, INDUSTRIAL PARKS AND SPECIAL ECONOMIC ZONES. THE TAX BENEFIT WAS INTRODUCED FOR THE REASON THAT INDUSTRIAL MODERNIZATION REQUIRES A PASSIVE EXPANSION OF , AND QUALITATIVE I MPROVEMENT IN, INFRASTRUCTURE (VIZ, EXPRESSWAYS, HIGHWAYS, AIRPORTS, PORTS AND RA PID URBAN RAIL TRANSPORT SYSTEMS) WHICH WAS LACKING IN OUR COUNTRY. THE PURPOSE OF T HE TAX BENEFIT HAS ALL ALONG BEEN FOR ENCOURAGING PRIVATE SECTOR PARTICIPATION BY WAY OF INVESTMENT IN DEVELOPEMTN OF THE INFRASTRUCTURE SECTOR AND NOT FOR THE PERSON S WHO MERELY EXECUTE THE CIVIL CONSTRUCTION WORK OR ANY OTHER WORKS CONTRACT . ACCORDINGLY, IT IS PROPOSED TO CLARIFY THAT THE PRO VISIONS OF SECTION 80IA SHALL NOT APPLY TO A PERSON WHO EXECUTES A WORKS CONTRACT ENT ERED INTO WITH THE UNDERTAKING OR ENTERPRISE REFERRED TO IN THE SAID SECTION. THU S, IN A CASE WHERE A PERSON MAKES THE INVESTMENT AND HIMSELF EXECUTES THE DEVELOPMENT WORK, I.E. CARRIES OUT THE CIVIL CONSTRUCTION WORK, HE WILL BE ELIGIBLE FOR TA X BENEFIT UNDER SECTION 80IA. IN 58 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. CONTRAST TO THIS, A PERSON WHO ENTERS INTO A CONTRA CT WITH ANOTHER PERSON (I.E. UNDERTAKING OR ENTERPRISE REFERRED TO IN SECTION 80 IA) FOR EXECUTING WORKS CONTRACT, WILL NOT BE ELIGIBLE FOR TAX BENEFIT UNDE R SECTION 80IA . THIS AMENDMENT WILL TAKE RETROSPECTIVE EFFECT FROM APRIL 1, 2000 AND WILL ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YEA R 2000-01 AND SUBSEQUENT YEARS . IT WAS PLEADED THAT THE EXPLANATORY MEMORANDUM CLEA RLY LAYS OUT THAT PURPOSE OF EXTENDING TAX BENEFIT U/S 80IA OF THE ACT WAS TO EN COURAGE INVESTMENTS FROM THE PRIVATE SECTOR AND HENCE WORKS CONTRACT, I.E CONTRACTS INVO LVING MERELY LABOUR (OR MERE EXECUTION OF CONSTRUCTION WITHOUT MAKING INVESTMENTS) ARE OUT SIDE THE PURVIEW OF THE PROVISIONS OF SECTION 80IA OF THE ACT. THUS THE TERM WORKS CONTR ACT USED IN EXPLANATION TO SECTION 80IA(13) OF THE ACT MEANS A CONTRACT OF DEVELOPING INFRASTRUCTURE BY MERELY EMPLOYING LABOUR AND MAKING NO INVESTMENTS. (F) WE FIND THAT THE PROVISIONS OF SECTION 80IA(4) OF THE ACT ARE VERY CLEAR AS UNDER :- THIS SECTION APPLIES TO - (I) ANY ENTERPRISE CARRYING ON THE BUSINESS OF (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING ANY INF RASTRUCTURE FACILITY WHICH FULFILS ALL THE FOLLOWING CONDITIONS , NAMELY :- (A) IT IS OWNED BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF SUCH COMPANIES OR BY AN AUTHORITY OR A BOARD OR A CORPORATION OR ANY OTHER BODY ESTABLISHED OR CONSTITUTED UNDER ANY CENTRAL OR STATE ACT; (B) IT HAS ENTERED INTO AN AGREEMENT WITH THE CENTR AL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING A NEW I NFRASTRUCTURE FACILITY ; . THUS WITH EFFECT FROM 1.4.2002, AN ENTERPRISE IS EL IGIBLE FOR DEDUCTION U/S 80IA OF THE ACT IF, SUBJECT TO OTHER CONDITIONS, IT CARRIES ON EITH ER OF THE BUSINESS OF DEVELOPING OR OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY. THERE WAS NO NECESSITY THAT THE SAME EN TERPRISE SHOULD CARRY ON ALL THE THREE ACTIVITIES OF DEVELOPING, OPERATING AND MAINTAINING THE NEW INFRASTRUCTURE FACILITY AS WAS REQUIRED PRIOR TO THE AMENDMENT WITH EFFECT FROM 1. 4.2002. FURTHER, WITH EFFECT FROM 1.4.2002, IN SUB-CLAUSE (B) , THE CONDITION OF TRAN SFER OF INFRASTRUCTURE FACILITY TO THE CENTRAL OR STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY, AS THE CASE 59 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. MAY BE, WITHIN THE PERIOD STIPULATED IN THE AGREEM ENT, WAS ALSO DONE AWAY . THIS MEANS PRIOR TO 1.4.2002, THE AGREEMENTS / CONTRACTS AWARD ED TO AN ENTERPRISE FOR DEVELOPMENT OF A NEW INFRASTRUCTURE FACILITY ARE TO BE EXECUTED UNDE R THE BOLT SCHEME I.E BUILD, OWN, LEASE AND TRANSFER, BECAUSE AS PER THE PROVISIONS, ALL THE THREE ACTIVITIES OF DEVELOPMENT, MAINTENANCE AND OPERATION HAD TO BE CARRIED ON BY T HE SAME ENTERPRISE. HOWEVER, FROM ASST YEAR 2002-03 ONWARDS THERE WAS NO SUCH CONDITI ON AND TO MAKE ITSELF BEING ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT, THE ENTERPRISE C OULD CARRY ON ANY ONE OF THE ACTIVITY I.E EITHER TO DEVELOP OR , OPERATE AND MAINTAIN OR, DEV ELOP, OPERATE AND MAINTAIN. THUS IT COULD BE SEEN THAT THE PROVISIONS WERE LIBERALIZED FOR THE PURPOSE OF ELIGIBILITY OF CLAIMING DEDUCTION THEREON TAKING INTO ACCOUNT THE PRACTICAL ASPECTS OF THE HUGE INVESTMENTS INVOLVED , WHEREWITHAL FOR RESOURCES AND EXPERTISE IN ALL FIELDS, RISKS EXISTING FOR A SUBSTANTIAL PERIOD OF TIME ETC. (G) THE LD AO HELD THAT THE ASSESSEE ENTERED INTO A N AGREEMENT FOR EXECUTION OF WORKS RELATING TO CIVIL WORKS, CONSTRUCTION, ERECTION, IN STALLATION, IMPROVEMENT, MODIFICATION, REPAIR OF ANY IMMOVABLE OR MOVABLE PROPERTY FOR CAS H / DEFERRED PAYMENT AND THEREFORE, ALL THE WORKS EXECUTED BY THE ASSESSEE FALLS UNDER WORKS CONTRACT. FURTHER HE OBSERVED THAT THE CONTRACTS / AGREEMENTS, THE ASSESSEE HAS BEEN D ENOTED AS A CONTRACTOR. HOWEVER, ON GOING THROUGH THE NATURE OF BUSINESS ACTIVITES CARR IED ON BY THE ASSESSEE, ON EXAMINATION OF AGREEMENTS / CONTRACTS ENTERED INTO VIS A VIS T HE FINANCIAL STATEMENTS OF THE ASSESSEE, WE ARE OF THE OPINION THAT THE LD AO WAS NOT JUSTIF IED IN DISALLOWING THE DEDUCTION U/S 80IA OF THE ACT BY HOLDING THAT THE ASSESSEE HAS ME RELY ACTED AS A CONTRACTOR AND EXECUTED THE WORKS CONTRACT. IF THE VIEW TAKEN BY THE LD A O IS TO BE ACCEPTED, THEN WE ARE AFRAID THAT , NO ENTERPRISE WHICH ENTERED INTO AN AGREEMEN T WITH THE GOVERNMENT FOR ONLY DEVELOPMENT OF NEW INFRASTRUCTURE FACILITY WOULD BE ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT BECAUSE IN ALL SUCH AGREEMENTS, THE ENTERPRISE IS REFERRED TO AS CONTRACTOR AND IN ALMOST ALL THE INFRASTRUCTURE DEVELOPMENT ACTIVITIE S, THE CIVIL WORK, CONSTRUCTION, FABRICATION, ERECTION, INSTALLATION, REPAIR AND COM MISSIONING ETC ARE INVOLVED. THE ENTERPRISE HAS TO RECEIVE THE PAYMENT FROM THE GOVE RNMENT FOR THE WORK OF DEVELOPMENT BECAUSE WITH SUCH AN ENTERPRISE THERE IS NO OTHER S OURCE TO RECOVER ITS INVESTMENT MADE IN EXECUTING THE WORK OF DEVELOPMENT OF INFRASTRUCTURE PROJECT AWARDED TO IT. WE FIND ON 60 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. GOING THROUGH THE PROVISIONS OF SECTION 80IA(4) OF THE ACT WITH EFFECT FROM 1.4.2002, IT APPEARS THAT THE LEGISLATURE INTENDS TO PROVIDE THE BENEFIT OF THE INCENTIVE TO SUCH ENTERPRISES ALSO WHO ONLY DEVELOP THE NEW INFRASTRU CTURE FACILITY . IF THE VIEW TAKEN BY THE LD AO ON THE BASIS OF MEANING OF WORKS CONTRACT A S PER CENTRAL SALES TAX ACT OR THE WEST BENGAL VALUE ADDED TAX ACT IS ACCEPTED, THEN T HE VERY PURPOSE OF LEGISLATURE TO EXTEND INCENTIVE FOR DEVELOPMENT OF INFRASTRUCTURE WILL BE FRUSTRATED. FROM THE PERUSAL OF THE VARIOUS AGREEMENTS / CONTRACTS ENTERED INTO BY THE ASSESSEE AND FROM THE PERUSAL OF VARIOUS ACTIVITIES CARRIED OUT BY THE ASSESSEE IN E ACH OF THE PROJECTS AS DETAILED ABOVE FOR VARIOUS ASST YEARS, IT COULD BE SAFELY CONCLUDED TH AT - (I) THE ASSESSEE HAD CARRIED OUT SET OF ACTIVITIES TO DEVELOP THE INFRASTRUCTURE PROJECT; (II) THE ASSESSEE HAD USED ITS TECHNICAL EXPERTISE , TECHNICAL AND OTHER SKILLED AND NON- SKILLED MANPOWER AND ITS PLANT AND MACHINERIES TO E XECUTE THE PROJECTS; (III) THE ASSESSEE HAD INVESTED HUGE FUNDS OUT OF I TS OWN AS WELL AS BORROWED MONIES FOR EXECUTION OF THE PROJECTS AS COULD BE EVIDENT FROM THE BALANCE SHEET OF THE ASSESSEE , THEREBY PROVING THE INVESTMENT RISK UNDERTAKEN BY T HE ASSESSEE (H) THE WORD DEVELOPER MEANS A PERSON WHO MAKES T HINGS HAPPEN. IN THE PRESENT CASE, IT IS THE ASSESSEE WHO HAS BY MOBILIZING AND SYNTHE SIZING PEOPLE, PLANS, TECHNICAL EXPERTISE , SUPERVISION, CO-ORDINATION AND CONTROL ETC DEVELO PED AND CREATED THE INFRASTRUCTURE FACILITY. THE TERM CONTRACTOR IS NOT ESSENTIALLY CONTRADICTORY TO THE TERM DEVELOPER. ON THE CONTRARY, THE SECTION 80IA(4) ITSELF PROVIDES T HAT THE ASSESSEE SHOULD DEVELOP THE INFRASTRUCTURE FACILITY AS PER THE AGREEMENT WITH T HE GOVERNMENT. EVERY AGREEMENT ENTERED INTO IS A CONTRACT. THE WORD CONTRACTOR I S USED TO DENOTE THE PERSON WHO ENTERS INTO SUCH CONTRACT. HENCE A PERSON WHO ENTERS INTO A CONTRACT FOR DEVELOPMENT OF INFRASTRUCTURE FACILITY IS A CONTRACTOR. EVERY CO NTRACTOR MAY NOT BE A DEVELOPER BUT EVERY DEVELOPER DEVELOPING INFRASTRUCTURE FACILITY ON BEH ALF OF THE GOVERNMENT IS A CONTRACTOR. WE FIND THAT THE ASSESSEE IN THE INSTANT CASE HAD N OT ACTED AS A SUB-CONTRACTOR. IT HAD ITSELF DEVELOPED THE INFRASTRUCTURE FACILITIES AS PER THE AGREEMENTS WITH THE GOVERNMENT. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD NOT CLAIMED ANY DE DUCTION ON ANY INCOME PERTAINING TO SUB-CONTRACT WORK UNDERTAKEN FROM THE ENTERPRISES R EFERRED TO IN SECTION 80IA(4) OF THE ACT. WE FIND THAT THE CBDT CIRCULAR NO. 3 OF 2008 DATED 12.3.2008 RELIED UPON BY THE LD 61 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. DR CLARIFIES THAT AN ASSESSEE WHO EXECUTES THE DEVE LOPMENT WORK AND CARRIES OUT CIVIL CONSTRUCTION WORK IS A DEVELOPER. THE BOARD IS ALS O OF THE VIEW THAT THOSE PERSONS WORKING FOR OTHERS ARE THE WORKS CONTRACTORS AND NO T THE DEVELOPERS. IN THE CASE ASSESSEEM IT UNDERTOOK THE WORK OF DEVELOPMENT AND THEREFORE IT IS A DEVELOPER AND NOT A WORKS CONTRACTOR EVEN ACCORDING TO THE CIRCULAR ISS UED BY THE BOARD. WITH REGARD TO THE ADOPTION OF MEANING OF WORKS CONTRACT; AS PER THE CENTRAL SALES TAX ACT OR THE WEST BENGAL VALUE ADDED TAX ACT, THE LD CITA HAD STATED THAT IT IS A SETTLED LEGAL POSITION THAT THAT ORDINARILY THE MEANING OR DEFINITION OF A WORD USED IN ONE STATUTE CANNOT PER SE BE IMPORTED INTO ANOTHER AS HAS BEEN HELD BY THE HONB LE SUPREME COURT IN THE CASE OF UNION OF INDIA VS R.C.JAIN REPORTED IN (1981) 2 SCC 308 . THEREFORE, THE MEANING OF THE WORD WORKS CONTRACT; IMPORTED BY THE LD AO FROM OTHER L EGISLATION BE THE STATE ENACTMENT, CANNOT BE AUTOMATICALLY APPLIED IN THE PRESENT CONT EXT. IT IS IN EVERYBODYS KNOWLEDGE THAT A CONTRACTOR MERELY CARRIES ON WORK WITH THE M ATERIAL SUPPLIED BY THE CONTRACTEE AND THE KNOWLEDGE SUPPLIED BY THE CONTRACTEE. FURTHER, IN A WORKS CONTRACT, THE RISK IS UNDERTAKEN BY THE CONTRACTEE AND IN THE CASE OF A D EVELOPMENT CONTRACT, THE CONTRACTOR UNDERTAKES THE RISKS INVOLVED. FACTUALLY, IN THE CASE OF THE ASSESSEE COMPANY, ON PERUSAL OF AGREEMENTS / CONTRACTS, IT IS OBSERVED THAT IT W AS ALLOTTED A PREMISES AND THE POSSESSION OF THE PREMISES WAS HANDED OVER TO THE ASSESSEE. I T WAS ASKED BY THE GOVERNMENT TO DEVELOP THE SAID AREA INTO AN INFRASTRUCTURE FACILI TY. ALL THE ACTIVITIES NECESSARY IN THE PROCESS OF DEVELOPMENT AND THE LOSSES SUFFERED IN T HE PROCESS, THE MATERIAL TO BE USED INCLUDING THE EXPERTISE SHALL BE OF THE ASSESSEE. THE MAINTENANCE OF THE FACILITY DURING THE PERIOD OF DEVELOPMENT AND FOR CERTAIN DURATION AFTE R THE DEVELOPMENT ALSO SHALL BE OF THE ASSESSEE. THEREFORE, THE ASSESSEE IS A DEVELOPER O F INFRASTRUCTURE FACILITY OF THE NATURE PROVIDED IN EXPLANATION TO SECTION 80IA(4) OF THE A CT AND NOT A MERE WORKS CONTRACTOR. (I) WE FIND SUPPORT FROM THE CBDT CIRCULAR NO. 4 OF 2010 DATED 18.5.2010 WHICH WAS ISSUED AFTER THE INTRODUCTION OF THE EXPLANATION BY THE FINANCE ACT 2009 . IT SAYS :- 'REFERENCES HAVE BEEN RECEIVED BY THE BOARD AS TO W HETHER WIDENING OF EXISTING ROADS CONSTITUTES CREATION OF NEW INFRASTRUCTURE FACILITY FOR THE PURPOSE OF SECTION 80IA(4)(I) OF THE INCOME TAX ACT, 1961. SECTION 80IA(4)(I) PROVIDES FOR A DEDUCTION TO AN U NDERTAKING ENGAGED IN DEVELOPING, OR OPERATING AND MAINTAINING, OR DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY SUBJECT TO SATISFACTION OF THE CONDITIONS LAID DOWN IN THE SECTION. THE EXPLANATION TO 62 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. SUB-SECTION 80IA(4)(I) STATES THAT FOR THE PURPOSE OF THIS CLAUSE, INFRASTRUCTURE FACILITY MEANS INTERAIIA:- (A) A ROAD INCLUDING TOLL ROAD, A BRIDGE OR A RAIL SYSTEM; (B)A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER ACT IVITIES BEING AN INTEGRAL PART OF THE HIGHWAY PROJECT, THE ISSUE HAS BEEN EXAMINED BY THE BOARD, IT HAS BE EN DECIDED THAT WIDENING OF AN EXISTING ROAD BY CONSTRUCTING ADDITIONAL LANES AS A PART OF A HIGHWAY PROJECT BY AN UNDERTAKING WOULD BE REGARDED AS A NEW INFRASTRUCTURE FACILITY FOR THE PURPOSE OF SECTION 80IA(4)(I). HOWEVER, SIMPLY RELAYING AN EXISTING ROAD WOULD NOT BE CLASSIFIABLE AS A NEW INFRASTRUCTURE FACILITY FOR THIS PURPOSE.' THUS IT COULD BE SEEN FROM THE CIRCULAR OF THE BOAR D ISSUED AFTER THE SUBSTITUTION OF EXPLANATION BY THE FINANCE ACT 2009, THAT IF AN ENT ERPRISE ENTERED INTO A CONTRACT WITH THE GOVERNMENT FOR THE WIDENING OF AN EXISTING ROAD BY CONSTRUCTING THE ADDITIONAL LANES, IT WOULD BE REGARDED AS DEVELOPMENT OF NEW INFRASTRUCT URE FACILITY WITHIN THE MEANING OF PROVISIONS OF SECTION 80IA(4)(I) OF THE ACT, AND SU CH AN ENTERPRISE WOULD BE ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. IT MEANS SUCH A CO NTRACT IS TO BE TREATED AS A DEVELOPMENT CONTRACT AND NOT THE WORKS CONTRACT. THE BOARD HAS ALSO CLARIFIED THAT SIMPLY RELAYING AN EXISTING ROAD WOULD NOT BE CLASSIFIABLE AS A NEW IN FRASTRUCTURE FACILITY FOR THIS PURPOSE. RIGHTLY, BECAUSE SIMPLY A CONTRACT FOR RELAYING OF AN EXISTING ROAD IS WORKS CONTRACT, AS NO NEW INFRASTRUCTURE FACILITY IS DEVELOPED IN THAT CA SE AND IN SUCH A SITUATION, THE ENTERPRISE WOULD NOT BE ENTITLED FOR DEDUCTION U/S 80IA OF THE ACT. IN THE CASE OF THE ASSESSEE COMPANY,IN ALL THE PROJECTS , NEW INFRASTRUCTURE FA CILITY CAME INTO EXISTENCE, WHICH FACT HAS NOT BEEN DISPUTED BY THE REVENUE BEFORE US. (J) WE FIND THAT OUR AFORESAID FINDINGS ARE DULY EN DORSED BY THE FOLLOWING DECISIONS :- THE HYDERABAD BENCH OF TRIBUNAL IN CASE OF M/S. GV PR ENGINEERS LTD. VS. ACIT (2012) 32 CCH 0296 HYDTRIB (2012) 51 SOT 0207 (HYD) (URO). TH E RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDER : THE NEXT QUESTION TO BE ANSWERED IS WHETHER THE AS SESSEE IS A DEVELOPER OR MERE WORKS CONTRACTOR. 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 GOVER NMENT OR THE GOVERNMENT BODY MAY BE A MERE WORKS CONTRACT OR FOR DEVELOPMENT OF INFRAST RUCTURE. IT IS TO BE SEEN FROM THE AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH THE GO VERNMENT. THE GOVERNMENT HANDED OVER THE POSSESSION OF THE PREMISES OF PROJECTS TO THE A SSESSEE FOR THE DEVELOPMENT OF INFRASTRUCTURE FACILITY. IT IS THE ASSESSEE'S RESPO NSIBILITY TO DO ALL ACTS TILL THE POSSESSION OF PROPERTY IS HANDED OVER TO THE GOVERNMENT. THE FIRS T PHASE IS TO TAKE OVER THE EXISTING 63 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. 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. AN Y LOSS TO THE PUBLIC CAUSED IN THE PROCESS WOULD BE THE RESPONSIBILITY OF THE ASSESSEE. THE AS SESSEE HAS TO DEVELOP THE INFRASTRUCTURE FACILITY. IN THE PROCESS, ALL THE WORKS ARE TO BE E XECUTED BY THE ASSESSEE. IT MAY BE LAYING OF A DRAINAGE SYSTEM; MAY BE CONSTRUCTION OF A PROJECT ; PROVISION OF WAY FOR THE CATTLE AND BULLOCK CARTS IN THE VILLAGE; PROVISION FOR TRAFFIC WITHOUT ANY HINDRANCE, THE ASSESSEE'S DUTY IS TO DEVELOP INFRASTRUCTURE WHETHER IT INVOLVES CO NSTRUCTION OF A PARTICULAR ITEM AS AGREED TO IN THE AGREEMENT OR NOT. THE AGREEMENT IS NOT FO R 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 IN BY THE ASSESSEE BY STICKING TO THE QUALITY AND QUANTITY IRRESPECTIVE OF THE COST OF SUCH MATER IAL. 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 EMP LOYEES AND TAKES THE RESPONSIBILITY OF DEVELOPING THE INFRASTRUCTURE FACILITY. THE LOSSES SUFFERED EITHER BY THE GOVT. OR THE PEOPLE IN THE PROCESS OF SUCH DEVELOPMENT WOULD BE THAT OF TH E ASSESSEE. THE ASSESSEE HANDS OVER THE DEVELOPED INFRASTRUCTURE FACILITY TO THE GOVERNMENT ON COMPLETION OF THE DEVELOPMENT. THEREAFTER, THE ASSESSEE HAS TO UNDERTAKE MAINTENAN CE OF THE SAID INFRASTRUCTURE FOR A PERIOD OF 12 TO 24 MONTHS. DURING THIS PERIOD, IF ANY DAMA GES ARE OCCURRED IT SHALL BE THE RESPONSIBILITY OF THE ASSESSEE. FURTHER, DURING THI S PERIOD, THE ENTIRE INFRASTRUCTURE SHALL HAVE TO BE MAINTAINED BY THE ASSESSEE ALONE WITHOUT HINDRANCE TO THE REGULAR TRAFFIC. THEREFORE, IT IS CLEAR THAT FROM AN UNDEVELOPED ARE A, 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 SECTI ON 80IA (4) OF THE ACT. 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 DEPARTMENT IS NOT CORR ECT IN HOLDING THAT THE ASSESSEE IS A MERE CONTRACTOR OF THE WORK AND NOT A DEVELOPER. 8.3 IT WAS ALSO OBSERVED THAT 'THE EXPLANATORY MEM ORANDUM TO FINANCE ACT 2007 STATES THAT THE PURPOSE OF THE TAX BENEFIT HAS ALL ALONG BEEN TO EN COURAGE INVESTMENT IN DEVELOPMENT OF INFRASTRUCTURE SECTOR AND NOT FOR THE PERSONS WHO M ERELY 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 BUSINESS RISK. SIMILARLY THE CHENNAI BENCH OF TRIBUNAL IN CASE OF R.R. CONSTRUCTIONS, CHENNAI VS DEPARTMENT OF INCOME TAX 2013) 35 CCH 0547 CHEN TRIB (2015) 152 I TD 0625 (CHENNAI) HELD THAT 'WHEN THE ASSESSEE MAKES INVESTMENT AND HIMSELF EXECUTES DEVE LOPMENT WORK AND CARRIES OUT CIVIL WORKS HE IS ELIGIBLE FOR TAX BENEFIT U/S 80IA OF THE ACT. ACCOR DINGLY, WITH THE FOREGOING DISCUSSION, WE HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IA(4) O F THE ACT, AND THEREFORE, WE ORDER TO DELETE THE ADDITION MADE IN THIS RESPECT' THUS, THE MEMORANDUM EXPLAINING THE PROVISIONS IN T HE FINANCE BILL, 2007, FURTHER STRENGTHENS THE CONTENTION OF THE ASSESSEE THAT A WORKS CONTRACT IS A CONTRACT WHICH INVOLVES MERE LABOUR OF THE CONTRACTOR. HOWEVER, IF UNDER A CONTRACT, THE CONTR ACTOR EMPLOYS HIS CAPITAL AND ENTERPRISE IN ADDITION TO LABOUR, THEN THE SAID CONTRACT DOES NOT CONSTITUTE A WORKS CONTRACT UNDER THE EXPLANATION TO SECTION 80-IA(L3) AND THE CONTRACTOR SHALL BE EL IGIBLE FOR DEDUCTION U/S 80-IA. NOW COMING TO THE FACTS OF THE CASE, IT IS SUBMITTED THAT THE ASSESSE E WAS NOT MERE WORKS CONTRACTOR, WHO HAD MERELY EMPLOYED ITS LABOUR UNDER THE PROJECTS FROM THE VAR IOUS GOVERNMENT AUTHORITIES. THE ASSESSEE WAS A DEVELOPER. IN ADDITION TO EMPLOYING LABOUR IT MADE INVESTMENTS, IT DEVELOPED AN ENTERPRISE/INFRASTRUCTURE TO SUPPORT THE WORK UNDER THE VARIOUS PROJECTS. IN ADDITION TO LABOUR, IT DEPLOYED ITS MACHINERY, MATERIALS AND DID ALL THE T HINGS NECESSARY (I.E. PROVIDED AN ENTERPRISE) TO SUPPORT THE CONSTRUCTION WORK UNDERTAKEN UNDER THE VARIOUS PROJECTS. THE ASSESSEE WAS PROVIDED 64 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. WITH THE SITE ALONE AND BY PUTTING ITS OWN INPUTS ( NOT LABOUR ALONE) HE CONVERTED THE SITE INTO AN INFRASTRUCTURAL FACILITY. 8.4 FURTHER, ITAT (HYDERABAD) IN CASE OF SIVA SWAT HI CONSTRUCTIONS PVT. LTD. VS DCIT, CIRCLE-3(2) IN ITA NO.1008-09/HYD/2013 FOR AYS 2009-10 & 2010-1 1 DATED 25.10.2013 HELD THAT 'THE NEXT REASON GIVEN BY THE CIT(A) IS WITH REGARD TO NONFIN ANCIAL PARTICIPATION BY THE ASSESSEE, AS THE ASSESSEE HAS GOT MOBILIZATION ADVANCE. THE MOBILIZA TION ADVANCE HAS NOT BEEN GIVEN FREELY. IT HAS BEEN GIVEN ONLY AFTER THE ASSESSEE FURNISHED A BANK GUARANTEE, AND THE BANK GUARANTEE HAS BEEN GIVEN BY THE BANK ONLY AFTER GETTING ENOUGH SECURIT Y FROM THE ASSESSEE, TO PROTECT ITSELF FROM ANY RIS K ON ACCOUNT OF ANY DEFAULT ON THE PART OF THE ASSESS EE. THE ASSESSEE HAS TAKEN FINANCIAL ASSISTANCE FROM BANK AND PAID HUGE INTEREST OF RS. 2,87,10,943 .00 FOR ASSESSMENT YEAR 2009-10 AND OF RS. 9,35,78,373.00 FOR ASSESSMENT YEAR 2010-11, AS SEEN FROM THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE FOR THE RELEVANT YEARS ENDING ON 31.3.2009 AND 31.3.2010 RESPECTIVELY, COPIES OF WHICH ARE FURNISHED BY THE ASSESSEE AT PAGES 20 AND 65 OF THE PAPER-BOOK. SIMILARLY, ASSESSEE HAS INVESTED ITS OWN FUND OF RS.5,55,00,000.00 FOR ASSESSMENT YEAR 2 009-10 AND OF RS. 7,86,75,710.00 FOR THE ASSESSMENT YEAR 2010-11, AS SEEN FROM THE BALANCE S HEET OF THE ASSESSEE AS ON 31.3.2009 AND 31.3.2010 RESPECTIVELY, COPIES OF WHICH ARE FURNISH ED BY THE ASSESSEE AT PAGES 21 AND 66 OF THE PAPER-BOOK. IN THIS VIEW OF THE MATTER, THE REASON GIVEN BY THE CIT(A) ON THIS ASPECT FOR DENYING DEDUCTION TO THE ASSESSEE UNDER S.80-IA IS ALSO NOT VALID. THUS IN LIGHT OF THE AFORESAID DECISION OF THE TRI BUNAL HYDERABAD BENCH, THE CONTENTION OF THE AO IS NOT VALID. FURTHER, MERELY BECAUSE THE ASSESSEE WAS RECEIVING PAYMENTS FROM THE GOVERNMENT IN PROGRESS OF WORK IT CANNOT BE SAID THAT THE PROJECT S WERE FINANCED BY GOVERNMENT. IN THIS REGARD IT IS POINTED OUT THAT UNDER SUB-SECTION 4 OF SECTION 80- IA, DEDUCTION IS AVAILABLE TO A DEVELOPER, I.E. IF, AN ASSESSEE, MERELY DEVELOPS THE INFRASTRUCTURE FACILI TY WITHOUT OPERATING AND MAINTAINING THE SAME, IT IS ENTITLED TO DEDUCTION. THE BOMBAY HIGH COURT IN CASE OF COMMISSIONER OF INCOME-TAX V. ABG HEAVY INDUSTRIES LIMITED [322 ITR 323] OBSERVED THA T 'PARLIAMENT AMENDED THE PROVISIONS OF SECTION 80-LA OF THE ACT SO AS TO CLARIFY THAT IN O RDER TO AVAIL OF A DEDUCTION, THE ASSESSEE COULD (I ) DEVELOP ; OR (II) OPERATE AND MAINTAIN ; OR (III) D EVELOP, OPERATE AND MAINTAIN THE FACILITY. THE CONDITION AS REGARDS DEVELOPMENT, OPERATION AND MAI NTENANCE OF AN INFRASTRUCTURE FACILITY WAS CONTEMPORANEOUSLY CONSTRUED BY THE AUTHORITIES AT A LL MATERIAL TIMES, TO COVER WITHIN ITS PURVIEW THE DEVELOPMENT OF AN INFRASTRUCTURE FACILITY UNDER A S CHEME BY WHICH AN ENTERPRISE WOULD BUILD, OWN, LEASE AND EVENTUALLY TRANSFER THE FACILITY. ' 'THIS WAS PERHAPS A PRACTICAL REALISATION OF THE FA CT A DEVELOPER MAY NOT POSSESS THE WHEREWITHAL, EXPERTISE OR RESOURCES TO OPERATE A FA CILITY, ONCE CONSTRUCTED PARLIAMENT EVENTUALLY STEPPED IN TO CLARIFY THAT IT WAS NOT IN VARIABLY NECESSARY FOR A DEVELOPER TO OPERATE AND MAINTAIN THE FACILITY. PARLIAMENT WHEN IT AMENDED THE LAW WAS OBVIOUSLY AWARE OF THE ADMINISTRATIVE PRACTICE RESULTING IN THE CIR CULARS OF THE CENTRAL BOARD OF DIRECT TAXES. THE FACT THAT IN SUCH A SCHEME. AN ENTERPRISE WOULD NOT OPERATE THE FACILITY ITSELF WAS NOT REGARDED AS BEING A STATUTORY BAR TO THE ENTITLEMEN T TO A DEDUCTION UNDER SECTION 80-IA OF THE ACT. ' 8.5 FROM THE ABOVE IT IS CLEAR THAT EVEN IF AN ASS ESSEE IS MERELY DEVELOPING THE INFRASTRUCTURAL FACILITY (WITHOUT OPERATING AND MAINTAINING THE SAM E), IT IS ENTITLED TO DEDUCTION U/S 80-1A. FURTHER, CONDITION (B) LAID OUT IN SUB-SECTION 4 OF SECTION 80-IA MANDATES THE EXISTENCE OF AN AGREEMENT WITH THE GOVERNMENT. MOREOVER, IF SECTION 80-IA GRANTS D EDUCTION ON PROFITS FROM THE ACTIVITY OF DEVELOPMENT CARRIED OUT IN PURSUANCE OF AN AGREEMEN T WITH THE GOVERNMENT IT PRESUPPOSES THAT ASSESSEE WILL EARN SOME PROFITS FROM MERE DEVELOPME NT (WITHOUT OPERATING AND MAINTAINING) OF THE INFRASTRUCTURE FACILITY. NOW THE RELEVANT QUESTION THAT ARISES HERE IS THAT HOW WOULD AN ASSESSEE ENGAGED IN MERE DEVELOPMENTAL ACTIVITY (AND NO OPER ATION) PURSUANT TO AN AGREEMENT WITH THE GOVERNMENT EARN PROFITS? THE OBVIOUS ANSWER IS THAT THE ASSESSEE WILL RECOVER ITS COST OF DEVELOPMENT FROM THE GOVERNMENT OTHERWISE THE ENTIR E COST OF DEVELOPMENT WILL BE A LOSS IN ITS HANDS. THUS, IF DEDUCTION U/S 80-IA IS DENIED ON TH E GROUND THAT THE ASSESSEE HAD RECEIVED PAYMENTS 65 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. FROM GOVERNMENT, THEN AN ASSESSEE WHO IS ONLY A 'DE VELOPER' (AND NOT AN OPERATOR) WILL NEVER BE ENTITLED TO DEDUCTION U/S 80-IA, WHICH IS CLEARLY N OT THE INTENTION OF LEGISLATURE AS DISCUSSED BY THE BOMBAY HIGH COURT IN CASE OF ABG HEAVY INDUSTRIES L TD. THUS, MERELY BECAUSE THE ASSESSEE WAS PAID BY THE GOVERNMENT FOR DEVELOPMENT WORK IT CANN OT BE DENIED DEDUCTION UNDER SECTION 80-IA(4). THE CONTENTION OF THE ASSESSEE FINDS STRENGTH FROM THE FOLLOWING JUDGMENTS: THE ITAT (MUMBAI) IN CASE OF ACIT V. BHARAT UDYOG LTD. (2009) 123 TTJ 0689 : (2009) 23 DTR 0433 : (2009) 118 ITD 0336 : (2008) 24 SOT 0412 AFTER THE AMENDMENT EFFECTED BY FINANCE ACT, 1999 W.E.F. 1ST APRIL, 2000, THE DEDUCTION UNDER S. 80-IA(4) HAS BECOME AVAILABLE TO ANY ENTER PRISE CARRYING ON THE BUSINESS OF (I) DEVELOPING, OR (II) MAINTAINING AND OPERATING, OR ( III) DEVELOPING, MAINTAINING AND OPERATING ANY INFRASTRUCTURE FACILITY. SUB-CL. (C) OF CL. (I) OF S. 80-IA(4) IS OBVIOUSLY APPLICABLE TO AN ENTERPRISE WHICH IS ENGAGED IN OPERATING AND MAINT AINING THE INFRASTRUCTURE FACILITY ON OR AFTER 1ST APRIL, 1995. IT IS NOT APPLICABLE TO THE CASE OF AN ENTERPRISE WHICH IS ENGAGED IN MERE DEVELOPMENT OF INFRASTRUCTURE FACILITY AND N OT ITS OPERATION AND MAINTENANCE. THEREFORE, THE QUESTION OF OPERATING AND MAINTAINI NG OF INFRASTRUCTURE FACILITY BY SUCH ENTERPRISE BEFORE OR AFTER ANY CUT OFF DATE CANNOT ARISE. HOWEVER, IF THE CONTENTION OF THE DEPARTMENTAL REPRESENTATIVE IS ACCEPTED, IT WOULD O BVIOUSLY/UNDERSTANDABLY LEAD TO MANIFESTLY ABSURD RESULTS. WHEN THE ACT PROVIDES FO R DEDUCTION UNDISPUTEDLY FOR AN ENTERPRISE WHO IS ONLY DEVELOPING THE INFRASTRUCT URE FACILITY, UNACCOMPANIED BY OPERATING AND MAINTAINING THEREOF BY SUCH PERSON, THERE CANN OT BE ANY QUESTION OF PROVIDING A CONDITION FOR SUCH AN ENTERPRISE TO START OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR AFTER 1ST APRIL, 1995. SINCE THE ASSESSEE IS ONLY A DEVELOPER OF THE INFRASTRUCTURE PROJECT AND IT IS NOT MAINTAINING AND OPERATING THE INFRASTRUCTURE FACILITY, SUB-CL. (C) OF CL. (I) OF SUB-S. (4) OF S. 80-IA IS NOT APPLICABLE. THE IN TERPRETATION OF REVENUE IS ABSURD ALSO IN VIEW OF THE RATIONALE OF THE PROVISIONS OF S. 80-IA (4)(I). FROM THE ASST. YR. 2000-01, DEDUCTION IS AVAILABLE IF THE ASSESSEE CARRIES ON T HE BUSINESS OF ANY ONE OF THE THREE TYPES OF ACTIVITIES. WHEN AN ASSESSEE IS ONLY DEVELOPING AN INFRASTRUCTURE FACILITY PROJECT AND IS NOT MAINTAINING NOR OPERATING IT, OBVIOUSLY SUCH AN ASS ESSEE WILL BE PAID FOR THE COST INCURRED BY IT; OTHERWISE, HOW WILL THE PERSON WHO DEVELOPS THE INFRASTRUCTURE FACILITY PROJECT, REALISE ITS COST ? IF THE INFRASTRUCTURE FACILITY, JUST AFT ER ITS DEVELOPMENT, IS TRANSFERRED TO THE GOVERNMENT, NATURALLY THE COST WOULD BE PAID BY THE GOVERNMENT. THEREFORE, MERELY BECAUSE THE TRANSFEREE HAS PAID FOR THE DEVELOPMENT OF INFRASTRUCTURE FACILITY CARRIED OUT BY THE ASSESSEE, IT CANNOT BE SAID THAT THE ASSESSEE D ID NOT DEVELOP THE INFRASTRUCTURE FACILITY. IF THE INTERPRETATION CANVASSED BY THE REVENUE AUTHORI TIES IS ACCEPTED, NO ENTERPRISE, CARRYING ON THE BUSINESS OF ONLY DEVELOPING THE INFRASTRUCTU RE FACILITY, WOULD BE ENTITLED TO DEDUCTION UNDER S. 80-IA(4), WHICH IS NOT THE INTENTION OF TH E LAW. IF A PERSON WHO ONLY DEVELOPS THE INFRASTRUCTURE FACILITY IS NOT PAID BY THE GOVERNME NT, THE ENTIRE COST OF DEVELOPMENT WOULD BE A LOSS IN THE HANDS OF THE DEVELOPER AS HE IS NOT O PERATING THE INFRASTRUCTURE FACILITY. WHEN THE LEGISLATURE HAS PROVIDED THAT THE INCOME OF THE DEVELOPER OF THE INFRASTRUCTURE PROJECT WOULD BE ELIGIBLE FOR DEDUCTION, IT PRESUPPOSES THA T THERE CAN BE INCOME TO DEVELOPER, I.E., TO THE PERSON WHO IS CARRYING ON THE ACTIVITY OF ONLY DEVELOPING INFRASTRUCTURE FACILITY. OBVIOUS AS IT IS, A DEVELOPER WOULD HAVE INCOME ONLY IF HE IS PAID FOR DEVELOPMENT OF INFRASTRUCTURE FACILITY, FOR THE SIMPLE REASON THAT HE IS NOT HAVI NG THE RIGHT/AUTHORISATION TO OPERATE THE INFRASTRUCTURE FACILITY AND TO COLLECT TOLL THEREFR OM, AND HAS NO OTHER SOURCE OF RECOUPMENT OF HIS COST OF DEVELOPMENT. CONSIDERED AS SUCH, THE BU SINESS ACTIVITY OF THE NATURE OF BUILD AND TRANSFER ALSO FALLS WITHIN ELIGIBLE CONSTRUCTION AC TIVITY, THAT IS, ACTIVITY ELIGIBLE FOR DEDUCTION UNDER S. 80-IA INASMUCH AS MERE DEVELOPMENT AS SU CH AND UNASSOCIATED/ UNACCOMPANIED WITH OPERATE AND MAINTENANCE ALSO FALLS WITHIN SUCH BUSINESS ACTIVITY AS IS ELIGIBLE FOR DEDUCTION UNDER S. 80-IA. THEREFORE, MERELY BECAUSE THE PRESENT ASSESSEE WAS PAID BY THE GOVERNMENT FOR DEVELOPMENT WORK, IT CANNOT BE DENIE D DEDUCTION UNDER S. 80-IA(4). A PERSON WHO ENTERS INTO A CONTRACT WITH ANOTHER PERS ON WILL BE A CONTRACTOR NO DOUBT; AND THE ASSESSEE HAVING ENTERED INTO AN AGREEMENT WITH THE GOVERNMENT AGENCIES FOR DEVELOPMENT OF 66 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. THE INFRASTRUCTURE PROJECTS, IS OBVIOUSLY A CONTRAC TOR BUT THAT DOES NOT DEROGATE THE ASSESSEE FROM BEING A DEVELOPER AS WELL. THE TERM 'CONTRACTO R' IS NOT ESSENTIALLY CONTRADICTORY TO THE TERM 'DEVELOPER'. ON THE OTHER HAND, RATHER S. 80-I A(4) ITSELF PROVIDES THAT ASSESSEE SHOULD DEVELOP THE INFRASTRUCTURE FACILITY AS PER AGREEMEN T WITH THE CENTRAL GOVERNMENT, STATE GOVERNMENT OR A LOCAL AUTHORITY. SO, ENTERING INTO A LAWFUL AGREEMENT AND THEREBY BECOMING A CONTRACTOR SHOULD, IN NO WAY, BE A BAR TO THE ONE BEING A DEVELOPER. THEREFORE, MERELY BECAUSE IN THE AGREEMENT FOR DEVELOPMENT OF INFRAST RUCTURE FACILITY, ASSESSEE IS REFERRED TO AS CONTRACTOR OR BECAUSE SOME BASIC SPECIFICATIONS ARE LAID DOWN, IT DOES NOT DETRACT THE ASSESSEE FROM THE POSITION OF BEING A DEVELOPER; NO R WILL IT DEBAR THE ASSESSEE FROM CLAIMING DEDUCTION UNDER S. 80-IA(4). THEREFORE, AN ASSESSEE WHO IS ONLY ENGAGED IN THE DEVELOPING THE INFRASTRUCTURAL FACILITY I.E., ROAD AND NOT ENG AGED IN THE OPERATING AND MAINTAINING THE SAID FACILITY IS ENTITLED TO THE BENEFITS OF THE DE DUCTION UNDER S. 80-IA(4).PATEL ENGINEERING LTD. VS. DY. CIT (2004) 84 TTJ (MUMBAI) 646 FOLLOWE D. PROVISIONS OF SUB-CL. (C) OF CL. (I) OF S. 80-IA(4) ARE INAPPLICABLE TO THE ASSESSEE WHICH IS ENGAGED IN MERE DEVELOPING OF THE INFRASTRUCTURE FACILITY AND, THEREFORE, AN ASSESSEE WHO IS ONLY ENGAGED IN DEVELOPING THE INFRASTRUCTURE FACILITY AND NOT IN OPERATING AND M AINTAINING THE SAID FACILITY IS ENTITLED TO THE BENEFIT OF DEDUCTION UNDER S. 80-IA(4); MERELY BECAUSE ASSESSEE IS REFERRED TO AS CONTRACTOR IN THE AGREEMENT FOR DEVELOPMENT OF IN FRASTRUCTURE FACILITY OR SOME BASIC SPECIFICATIONS ARE LAID DOWN, WOULD NOT DEBAR THE A SSESSEE FROM CLAIMING DEDUCTION UNDER S. 80-IA(4). IF A PERSON WHO ONLY DEVELOPS THE INFRASTRUCTURE F ACILITY WAS NOT PAID BY THE GOVERNMENT, THE ENTIRE COST OF DEVELOPMENT WOULD BE A LOSS IN THE HANDS OF THE DEVELOPER AS HE WAS NOT OPERATING THE INFRASTRUCTURE FACILITY. MERELY BECAUSE THE ASSESSE E WAS PAID BY THE GOVERNMENT FOR DEVELOPMENT WORK IT COULD NOT BE DENIED DEDUCTION UNDER SECTION 80-IA(4). THE CHENNAI BENCH OF TRIBUNAL IN CASE OF R.R. CONSTRUCTIONS, CHENNAI VS. DEPARTMENT OF INCOME TAX HELD THAT 'WHEN AN ASSESSEE IS ONLY DEVELOPING AN INFRASTRUCTURE FACILITY PROJECT AND IS NOT MAINTAINING NOR OPERATING IT, OBVIOUSLY SUCH AN ASSESSEE WILL BE PAID FOR THE COST INCURRED BY IT; OTHERWISE, HOW WILL THE PERSON, WHO DEVELOPS THE INFRASTRUCTURE FACILITY PROJECT, REALI ZE ITS COST? IF THE INFRASTRUCTURE FACILITY, JUST A FTER ITS DEVELOPMENT, IS TRANSFERRED TO THE GOVERNMENT, NATU RALLY THE COST WOULD BE PAID BY THE GOVERNMENT. THEREFORE, MERELY BECAUSE THE TRANSFEREE HAD PAID F OR THE DEVELOPMENT OF INFRASTRUCTURE FACILITY CARRIED OUT BY THE ASSESSEE, IT CANNOT BE SAID THAT THE ASSESSEE DID NOT DEVELOP THE INFRASTRUCTURE FACILITY. IF THE INTERPRETATION DONE BY THE ASSESSI NG OFFICER IS ACCEPTED, NO ENTERPRISE CARRYING ON T HE BUSINESS OF ONLY DEVELOPING HE INFRASTRUCTURE FACIL ITY WOULD BE ENTITLED TO DEDUCTION UNDER SECTION 80IA(4), WHICH IS NOT THE INTENTION OF THE LAW. AN ENTERPRISE, WHICH DEVELOPS THE INFRASTRUCTURE FACILITY IS NOT PAID BY THE GOVERNMENT, THE ENTIRE COST OF DEVELOPMENT WOULD BE A LOSS IN THE HANDS OF THE DEVELOPER AS HE IS NOT OPERATING THE INFRASTRUC TURE FACILITY. THE LEGISLATURE HAS PROVIDED THAT TH E INCOME OF THE DEVELOPER OF THE INFRASTRUCTURE PROJE CT WOULD BE ELIGIBLE FOR DEDUCTION. IT PRESUPPOSES THAT THERE CAN BE INCOME TO DEVELOPER I.E. TO THE P ERSON WHO IS CARRYING ON THE ACTIVITY OF ONLY DEVELOPMENT INFRASTRUCTURE FACILITY. OSTENSIBLY, A DEVELOPER WOULD HAVE INCOME ONLY IF HE IS PAID FOR THE DEVELOPMENT OF INFRASTRUCTURE FACILITY, FOR THE SIMPLE REASON THAT HE IS NOT HAVING THE RIGHT/AUTHORIZATION TO OPERATE THE INFRASTRUCTURE F ACILITY AND TO COLLECT TOLL THERE FROM, HAS NO OTHE R SOURCE OF RECOUPMENT OF HIS COST OF DEVELOPMENT. THE INDORE BENCH OF THE TRIBUNAL IN CASE OF SANEE I NFRASTRUCTURE PVT. LTD. VS. ACIT [138 ITD 433] HELD THAT 'AS PER OUR CONSIDERED VIEW, AFTER AMENDM ENT BY THE FINANCE ACT, 2002 FOR CLAIM OF DEDUCTION U/S 80IA(4) INFRASTRUCTURE FACILITY IS ON LY REQUIRED TO BE DEVELOPED AND THERE IS NO CONDITION THAT ASSESSEE SHOULD ALSO OPERATE THE SAM E. THUS, AFTER AMENDMENT, WHEN THE ASSESSEE IS NOT REQUIRED TO OPERATE THE FACILITY, THE PAYMENT F OR DEVELOPMENT OF SUCH INFRASTRUCTURE IS REQUIRED T O BE MADE BY THE GOVERNMENT ONLY. 'AFTER AMENDMENT, WHEN ASSESSEE UNDERTAKES TO DEVEL OP THE INFRASTRUCTURE FACILITY ONLY, IT IS THE GOVERNMENT WHO WILL MAKE PAYMENT TO ASSESSEE IN RESPECT OF INFRASTRUCTURE FACILITY 67 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. DEVELOPED BY IT IN TERMS OF AGREEMENT SO ENTERED WI TH GOVERNMENT. THUS, WE DO NOT FIND ANY INFRINGEMENT OF CONDITIONS {OR CLAIM OF DEDUCTION' 8.6 THUS FROM THE ABOVE, IT IS CLEAR THAT THE FACT THAT THE ASSESSEE HAD RECEIVED PAYMENTS FROM THE GOVERNMENT IN PROGRESS OF ITS WORK HAS NO BEARING O N ELIGIBILITY OF DEDUCTION U/S 80- IA. FURTHER, THE REVENUE IN ALL THE GROUNDS HAS CONTENDED THAT THE C ONTRACTS ENTERED INTO BY THE ASSESSEE WERE MERELY 'CONSTRUCTION CONTRACTS' SINCE THE ASSESSEE IS NOT EXPOSED TO ANY ENTREPRENEURIAL AND INVESTMENT RISK. IN THIS REGARD, THE AO HAS OBSERVED THAT THE ASSESS EE IS EXECUTING THE CONTRACT AGAINST PREDETERMINED REVENUE W.R.T THE ABOVE, IT IS SUBMITTED THAT UNDER THE IMPUGNED CONTRACTS, THE ASSESSEE WAS MERELY CARRYING OUT THE CIVIL CONSTRUCTION WORK. IT WAS RE SPONSIBLE FOR OVERALL DEVELOPMENT OF THE INFRASTRUCTURE FACILITY. IT WAS MERELY PROVIDED WIT H THE SITE WHICH IT HAD TO DEVELOP INTO AN INFRASTRUCTURAL FACILITY BY DEPLOYING HIS RESOURCES I.E. MATERIAL, PLANT & MACHINERY, LABOUR, SUPERVISORS ETC. IT WAS RESPONSIBLE FOR ANY DAMAGE/ LOSS CAUSED TO ANY PROPERTY OR LIFE IN COURSE OF EXECUTION OF THE WORKS. IT WAS EVEN RESPONSIBLE FOR REMEDYING OF THE DEFECTS IN THE WORKS AT ITS COST. IT WAS ALSO REQUIRED TO OPERATE AND MAINTAIN THE INFRA STRUCTURE FACILITY. HENCE, IT CANNOT BE SAID THAT THE CONTRACT WITH THE GOVERNMENT WAS TO CARRY OUT M ERE CIVIL CONSTRUCTION. ATTENTION IN THIS REGARD IS INVITED TO THE FOLLOWING: (I) THE ITAT (AHMEDABAD) IN CASE OF SUGAM CONSTRUCTION (P) LTD. VS. ITO [56 SOT 45] HELD THAT 'IT IS ALSO GATHERED (A) THAT A DEVEL OPER IS A PERSON WHO UNDERTAKES THE RESPONSIBILITY TO DEVELOP A PROJECT. (B) THAT A DEVELOPER IS THEREFORE NOT A CIVIL CONTRACTOR SIMPLICITOR. (C) THAT IF WE APPLY THE CO MMERCIAL ITA NO.1291- 1292/KOL/2013 A.YS 06-07 & 09-10 DCIT CC-XXVIII, KO L. V. M/S SPML INFRA LTD PAGE 29 ASPECT, THEN A DEVELOPER HAS TO EXECUTE BOT H MANAGERIAL AS WELL AS FINANCIAL RESPONSIBILITY. (D) THAT THE ROLE OF A DE VELOPER, ACCORDING TO US, IS LARGER THAN THAT OF A CONTRACTOR. (E) THAT WHEN A PERSON I S ACTING AS A DEVELOPER, THEN HE IS UNDER OBLIGATION TO DESIGN THE PROJECT, IT IS ANOTH ER ASPECT THAT SUCH DESIGN HAS TO BE APPROVED BY THE OWNER OF THE PROJECT, I. E. THE GOVERNMENT IN THE PRESENT CASE. (F) THAT HE HAS NOT ONLY TO EXECUTE THE CONSTRUCTION WO RK IN THE CAPACITY OF A CONTRACTOR BUT ALSO HE IS ASSIGNED WITH THE DUTY TO DEVELOP, M AINTAIN AND OPERATE SUCH PROJECT. (G) THAT TO ASCERTAIN WHETHER A CIVIL CONSTRUCTION WORK IS ASSIGNED ON DEVELOPMENT BASIS OR CONTRACT BASIS CAN ONLY BE DECIDED ON THE BASIS OF THE TERMS AND CONDITIONS OF THE AGREEMENT. ONLY ON THE BASIS OF THE TERMS AN D CONDITIONS IT CAN BE ASCERTAINED ABOUT THE NATURE OF THE CONTRACT ASSIGN ED THAT WHETHER IT IS A 'WORK CONTRACT' OR A 'DEVELOPMENT CONTRACT'. (H) THAT IN A DEVELOPMENT CONTRACT' RESPONSIBILITY IS FULLY ASSIGNED TO THE DEVELOPER F OR EXECUTION AND COMPLETION OF WORK. (I) THAT ALTHOUGH THE OWNERSHIP OF THE SITE O R THE OWNERSHIP OVER THE LAND REMAINS WITH THE OWNER BUT DURING THE PERIOD OF DEV ELOPMENT AGREEMENT THE DEVELOPER EXERCISE COMPLETE DOMAIN OVER THE LAND OR THE PROJECT. THAT A DEVELOPER IS NOT EXPECTED TO RAISE BILLS AT EVERY STEP OF CON STRUCTION BUT HE IS EXPECTED TO CHARGE THE COST OF CONSTRUCTION PLUS MARK-UP OF HIS PROFIT FROM THE ASSIGNEE OF THE CONTRACT. (K) THAT A DEVELOPER IS THEREFORE EXPECTE D TO ARRANGE FINANCES AND ALSO TO UNDERTAKE RISK. (I) THAT IN CONTRAST TO THE RIGHTS OF A 'CONTRACTOR' A 'DEVELOPER' IS AUTHORIZED TO RAISE FUNDS EITHER BY PRIVATE PLACEME NT OR BY FINANCIAL INSTITUTIONS ON THE BASIS OF THE PROJECT. THESE ARE FEW BROAD QUALI TIES OF A DEVELOPER THROUGH WHICH THE CHARACTER OF A DEVELOPER CAN BE DEFINED. ' (II) ITAT(HYDERABAD) IN CASE OF KOYA AND CO. CONSTRUCTIO N (P) LTD. VS ACIT [51 SOT 203] HELD THAT 'THE EXPLANATORY MEMORANDUM TO FINAN CE ACT 2007 STATES THAT THE PURPOSE OF THE TAX BENEFIT HAS ALL LONG BEEN TO ENC OURAGE INVESTMENT IN DEVELOPMENT OF INFRASTRUCTURE SECTOR AND NOT FOR THE PERSONS WH O MERELY EXECUTE THE CIVIL CONSTRUCTION WORK. IT CATEGORICALLY STATES THAT THE DEDUCTION UNDER SECTION 80IA OF THE ACT IS AVAILABLE TO DEVELOPERS WHO UNDERTAKES E NTREPRENEURIAL AND INVESTMENT RISK AND NOT FOR THE CONTRACTORS, WHO ITA NO.1291-1 292/KOL/2013 A.YS 06-07 & 09- 10 DCIT CC-XXVIII, KOL. V. M/S SPML INFRA LTD PAGE 30 UNDERTAKES ONLY BUSINESS 68 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. RISK. WITHOUT ANY DOUBT, THE LEARNED COUNSEL FOR TH E ASSESSEE CLEARLY DEMONSTRATED BEFORE THE COURT THAT THE ASSESSEE AT PRESENT HAS U NDERTAKEN HUGE RISKS IN TERMS OF DEPLOYMENT OF TECHNICAL PERSONNEL, PLANT AND MACHIN ERY, TECHNICAL KNOWHOW, EXPERTISE AND FINANCIAL RESOURCES. ' THUS THE FACT THAT THE ASSESSEE DEPLOYS ITS RESOURC ES (MATERIAL, MACHINERY, LABOUR ETC.) IN THE CONSTRUCTION WORK CLEARLY EXHIBITS THE RISKS UNDERT AKEN BY THE ASSESSEE. FURTHER, THE ASSESSEE VIDE THE AGREEMENTS HAS CLEARLY DEMONSTRAT ED THE VARIOUS RISKS UNDERTAKEN BY IT. THE ASSESSEE WAS TO FURNISH A SECURITY DEPOSIT TO T HE 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 ARISI NG IN THE WORKS AT IT COST. THUS, IT CANNOT BE SAID THAT THE ASSESSEE HAD NOT UNDERTAKEN ANY RI SK. THE ITAT (HYDERABAD] IN CASE OF SIVA SWATHI CONSTR UCTION (P) LTD. (SUPRA) HELD THAT 'FURTHER REASON GIVEN BY THE LD. CIT(A) FOR DENYING DEDUCTION UNDER S.80IA TO THE ASSESSEE IS THAT THE ASSESSEE HAS NOT UNDERTAKEN ANY RISKS. THE OBSERVATIONS OF THE LD. CIT(A) IN THIS BEHALF ARE ALSO NOT VALID AND CORRECT. IT WAS CLEAR LY MENTIONED IN THE AGREEMENT THAT THE ASSESSEE SHALL EXECUTE AND FURNISH INDEMNITY BOND F OR A PERIOD OF FOUR YEARS, INDEMNIFYING THE GOVERNMENT AGAINST ANY LOSS OR EXPENDITURE INCU RRED, TO REPAIR ANY DEFECT NOTICED DUE TO FAULTY WORKING DONE BY THE CONTRACTOR OR SUBSTAN DARD MATERIAL USED BY THE CONTRACTOR. FURTHER, IT IS ALSO MENTIONED IN THE CONTRACT AGREE MENT THAT THE ASSESSEE SHALL NOT CLAIM FOR ANY LOSS DUE TO FORESEEN CIRCUMSTANCES, INCLUDING S USPENSION OF WORK DUE TO CAUSE. IT IS ALSO PROVIDED THAT IN THE EVENT OF ACCIDENT TO PEOPLE EM PLOYED BY THE ASSESSEE RESULTING IN COMPENSATION TO BE PAID AS PER THE WORKMEN'S COMPEN SATION ACT THE SAME SHALL BE PAID BY THE CONTRACTOR, VIZ. THE ASSESSEE ONLY. IN VIEW OF THE VARIOUS SPECIFIC CLAUSES IN THE AGREEMENT FASTENING THE RISKS TO BE UNDERTAKEN BY T HE ASSESSEE, DISCUSSED ABOVE, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT UNDERTAKEN ANY RI SK. 8.7 FROM THE ABOVE, IT IS CLEAR THAT THE CONTENTIO N OF THE AO THAT THE ASSESSEE HAD NOT UNDERTAKEN ANY ENTREPRENEURIAL AND INVESTMENT RISK IS AN INCORRECT INTERPRETATION OF ITA NO.1291-1292/KOL/2013 A.YS 06-07 & 09-10 DCIT CC-XX VIII, KOL. V. M/S SPML INFRA LTD PAGE 31 THE FACTS. LASTLY, WITH REGARD TO THE PROJE CT O&M, BANGALORE (ON WHICH A DEDUCTION OF RS. 35,16,9411- WAS CLAIMED), IT IS SUBMITTED TH AT IT IS AN OPERATION AND MAINTENANCE PROJECT, TO WHICH EXPLANATION TO SECTION 80-IA(13) DOES NOT APPLY. EXPLANATION TO SECTION 80-IA(13) MERELY DISTINGUISHES BETWEEN A DEVELOPER AND WORKS CONTRACTOR. IT CLARIFIES THAT A WORKS CONTRACTOR SHALL NOT BE INCLUDED IN THE CATEG ORY OF 'DEVELOPER' U/S 80-1A. THUS, THE EXPLANATION CLEARLY DOES NOT APPLY TO O&M PROJECTS. HENCE, DEDUCTION OF RS. 35,16,9411- CLAIMED FOR THE AFORESAID PROJECT U/S 80-IA CANNOT BE DENIED BY INVOKING THE EXPLANATION TO SECTION 80-1A. 9. 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. FURTHER, IN ADDITION TO DEVELOPING THE INFRASTRUCTURE FACILITY, THE ASSESSE E WAS EVEN OPERATING AND MAINTAINING THE SAME. THUS, CLEARLY THE ASSESSEE IS ELIGIBLE FOR DE DUCTION U/S 80-1A. IN OUR CONSIDERED VIEW DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A). HENCE THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. (K) WE ALSO FIND THAT THE ISSUE UNDER DISPUTE IS AL SO COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE F OR THE ASST YEARS 2006-07 AND 2009-10 VIDE ORDER DATED 24.8.2016 EXCEPT WITH VARIANCE IN FIGURES AND VARIANCE IN PROJECTS 69 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. UNDERTAKEN BY THE ASSESSEE. FOR THE SAKE OF BREVI TY, THE OPERATIVE PORTION THEREON IS NOT REPRODUCED HEREIN. (L) IN VIEW OF OUR AFORESAID FINDINGS AND RESPECTFU LLY FOLLOWING THE JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE HOLD THAT THE ASSESSEE IS ENGAGED IN DEVELOPMENT OF INFRASTRUCTURE PROJECTS AND HAD ACTED AS A DEVELOPE R OF THE INFRASTRUCTURE FACILITIES AND HAS NOT ACTED MERELY AS A WORKS CONTRACTOR AND THEREFOR E, IT IS ELIGIBLE FOR DEDUCTION U /S 80IA OF THE ACT. HENCE WE DO NOT DEEM IT FIT AND APPRO PRIATE TO INTERFERE WITH THE ORDER OF THE LD CITA IN THIS REGARD. HENCE THE GROUNDS RAISED B Y THE REVENUE IN THIS REGARD FOR VARIOUS ASSESSMENT YEARS SUPRA ARE DISMISSED. 7. DISALLOWANCE U/S 14A OF THE ACT GROUNDS COVERED GROUND NOS. B) TO C) FOR ASST YEAR 2008-09 IN REVEN UES APPEAL GROUND NOS. B) TO C) FOR ASST YEAR 2010-11 IN REVEN UES APPEAL GROUND NO 2 FOR ASST YEAR 2008-09 IN ASSESSEES APP EAL GROUND NO 2 FOR ASST YEAR 2010-11 IN ASSESSEES APP EAL THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE RECEIVED DIVIDEND INCOME OF RS. 13,97,824/- FOR ASST YEAR 2008-09 AND RS. 5,73,757/ - FOR ASST YEAR 2010-11. THE LD AO OBSERVED THAT NO EXPENDITURE HAS BEEN DISALLOWED BY THE ASSESSEE U/S 14A OF THE ACT FOR THE PURPOSE OF EARNING THIS EXEMPT INCOME. ACCORD INGLY, HE SOUGHT TO INVOKE THE PROVISIONS OF RULE 8D FOR THE PURPOSE OF MAKING DIS ALLOWANCE U/S 14A OF THE ACT. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE REP LIED THAT THE INVESTMENTS WERE MADE OUT OF OWN FUNDS OF THE ASSESSEE AND THAT NO BORROWED F UNDS WERE UTILIZED FOR THE PURPOSE OF MAKING INVESTMENTS. MOREOVER, IT WAS FURTHER SUBMI TTED THAT NO EXPENDITURE WAS INCURRED FOR THE PURPOSE OF EARNING ANY EXEMPT INCOME IN THE FORM OF DIVIDEND AND ACCORDINGLY NO DISALLOWANCE U/S 14A OF THE ACT WAS WARRANTED IN TH E FACTS AND CIRCUMSTANCES OF THE CASE. THIS REPLY WAS FOUND TO BE NOT SATISFACTORY BY THE LD AO AND ACCORDINGLY HE PROCEEDED TO MAKE DISALLOWANCE U/S 14A OF THE ACT READ WITH RULE 8D(2) OF THE RULES BY INVOKING 2 ND AND 3 RD LIMB THEREON AND MADE DISALLOWANCE OF RS. 1,70,57, 361/- AND RS. 6,31,09,117/- FOR THE ASST YEARS 2008-09 AND 2010-11 RESPECTIVELY. ON APPEAL, THE LD CITA ACCEPTED THE 70 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. CONTENTIONS OF THE ASSESSEE THAT IT HAD SUFFICIENT OWN FUNDS AT ITS KITTY TO MAKE THE INVESTMENTS IN THE RELEVANT YEARS AND ACCORDINGLY N O DISALLOWANCE UNDER RULE 8D(2)(II) OF THE RULES IS WARRANTED. HOWEVER, HE SUSTAINED THE DISALLOWANCE MADE IN THE SUMS OF RS. 29,13,033/- AND RS. 31,33,520/- FOR THE ASST YEARS 2008-09 AND 2010-11 RESPECTIVELY UNDER RULE 8D(2)(III) OF THE RULES. AGGRIEVED, BO TH THE ASSESSEE AS WELL AS THE REVENUE IS IN APPEALS BEFORE US. 7.1. THE LD AR ARGUED THAT ONLY DIVIDEND BEARING IN VESTMENTS SHOULD BE CONSIDERED BY THE LD AO WHILE MAKING DISALLOWANCE UNDER RULE 8D(2)(II I) OF THE RULES . IN SUPPORT OF THIS PROPOSITION, HE PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF REI AGRO LTD VS DCIT IN ITA NO. 1331/K OL/2011 AND ITA NO. 1423/KOL/2011 DATED 19.6.2013 FOR ASST YEAR 2008-09 . WITH REGARD TO THE REVENUE APPEALS ON THE DELETION OF DISALLOWANCE UNDER RULE 8D(2)(II) OF THE RULES, HE STATED THAT THE LD CITA HAD CATEGORICALLY STATED THAT THE ASSES SEE IS FLUSHED WITH OWN FUNDS AND ONLY THE OWN FUNDS HAVE BEEN UTILSIED FOR MAKING INVESTM ENTS AND ACCORDINGLY NO DISALLOWANCE OF PROPORTIONATE INTEREST ON BORROWED FUNDS WOULD A RISE THEREON. IN RESPONSE TO THIS, THE LD DR VEHEMENTLY RELIED ON THE ORDER OF THE LD AO. 7.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE LD CITA HAD GIVEN A CATEGORICAL FINDING AS TO THE AVAILABILITY OF OWN F UNDS WITH THE ASSESSEE WHICH HAS BEEN USED FOR MAKING INVESTMENTS IN SHARES OF VARIOUS CO MPANIES AND THAT NO BORROWED FUNDS WERE UTILIZED FOR THE SAME. HENCE THERE IS NO QUES TION OF DISALLOWANCE OF PROPORTIONATE INTEREST BY INVOKING RULE 8D(2)(II) OF THE RULES. RELIANCE IN THIS REGARD IS PLACED ON THE FOLLOWING DECISIONS :- (A) CIT VS RELIANCE UTILITIES AND POWER LTD REPORTE D IN (2009) 313 ITR 340 (BOM) (B) CIT VS HDFC BANK LTD REPORTED IN (2014) 366 ITR 305 (BOM) (C ) CIT VS TORRENT POWER LTD REPORTED IN (2014) 36 3 ITR 474 (GUJ) (D) KOLKATA TRIBUNAL IN THE CASE OF HINDUSTAN MOTOR S LTD VS DCIT IN ITA NO. 171/KOL/2012 71 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. WITH REGARD TO THE OTHER ASPECT OF INVOKING DISALLO WANCE CONTEMPLATED UNDER RULE 8D(2)(III) OF THE RULES, WE FIND LOT OF FORCE IN TH E ARGUMENTS OF THE LD AR THAT ONLY INVESTMENTS THAT HAD YIELDED EXEMPT INCOME SHOULD B E RECKONED FOR THE PURPOSE OF WORKING OUT THE DISALLOWANCE THEREON. WE FIND THAT THE ASSESSEE HAD RECEIVED DIVIDENDS FROM THE FOLLOWING SHARES :- AY 08-09 AY 10-11 SUBHASH PIPES LTD 12,43,618 DIVIDEND FROM UNITS OF PNB MUTUAL FUND 1,52,331 DIVIDEND FROM MISCELLANEOUS QUOTED INVESTMENT (THE INVESTMENTS WERE SOLD BY THE ASSESSEE BUT NOT TRANSFERRED BY THE TRANSFEREES IN THEIR NAMES FROM THE ASSESSEE) 1,875 DELHI WASTE MANAGEMENTD LTD 5,73,757 ------------------ ------------------- 13,97,824 5,73,757 ------------------ ------------------ WE HOLD THAT ONLY THE AFORESAID INVESTMENTS SHOULD BE CONSIDERED FOR EACH OF THE YEARS FOR THE PURPOSE OF MAKING DISALLOWANCE UNDER RULE 8D(2) (III) OF THE RULES. WE DRAW SUPPORT FROM THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF REI AGRO LTD VS DCIT IN ITA NO. 1331/KOL/2011 AND ITA NO. 1423/KOL/ 2011 DATED 19.6.2013 FOR ASST YEAR 2008-09 IN THIS REGARD, WHEREIN IT WAS HELD T HAT :- 8.1. THUS , NOT ALL INVESTMENTS BECOME THE SUBJECT- MATTER OF CONSIDERATION WHEN COMPUTING DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D. THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D IS TO BE IN RELATION TO THE INCOME WHICH DO ES NOT FORM PART OF THE TOTAL INCOME AND THIS CAN BE DONE ONLY BY TAKING INTO CONSIDERATION THE INVES TMENT WHICH HAS GIVEN RISE TO THIS INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. UNDER THE CIRCUMSTANCES, THE COMPUTATION OF THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D(2) (III), WHICH IS ISSUE IN THE ASSESSEES APPEAL, IS RESTORED TO THE FILE OF THE AO FOR RECOMPUTATION IN LINE WITH THE DIRECTION GIVEN ABOVE. NO DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D(2) (I) AND (II) CAN BE MADE IN THIS CASE. RESPECTFULLY FOLLOWING THE AFORESAID DECISION, WE R ESTORE THIS ISSUE TO THE FILE OF THE LD AO TO RECOMPUTED DISALLOWANCE UNDER SECTION 14A READ W ITH RULE 8D(2)(III) OF THE RULES BY TAKING INTO ACCOUNT ONLY THOSE INVESTMENTS WHICH YI ELDED DIVIDEND INCOME . ACCORDINGLY, 72 ITA NOS.2286-2289/K/2013 & 2035-2036/K/2013 M/S. SPML INFRA LTD. THE GROUNDS RAISED IN THIS REGARD BY THE ASSESSEE A RE ALLOWED FOR STATISTICAL PURPOSES AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, TO SUM UP ITA NO. 2286/KOL/2013 ASST YEAR 2005-06 REVENUE APPEAL IS DISMISSED ITA NO. 2287/KOL/2013 ASST YEAR 2007-08 REVENUE APPEAL IS DISMISSED ITA NO. 2288/KOL/2013 ASST YEAR 2008-09 REVENUE APPEAL IS DISMISSED ITA NO. 2289/KOL/2013 ASST YEAR 2010-11 REVENUE APPEAL IS DISMISSED ITA NOS. 2035 & 2036/KOL/2013 ASST YEARS 2008-09 & 2010-11 ASSESSEE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES ORDER IS PRONOUNCED IN THE OPEN COURT ON 08.03.201 7 SD/- SD/- (PARTHA SARATHI CHAUDHURY) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 8 TH MARCH, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT DCIT, CC-XXVIII/ITO, WD-8(4), KOLKATA 2 RESPONDENT M/S. M/S. SPML INFRA LTD., 22, CAMAC ST REET, KOLKATA-700 016 3. THE CIT(A), KOLKATA 4. 5. CIT, KOLKATA. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .