M/s Yojaka Marine Pvt. Ltd., Mangalore V. ACIT, Mangalore

ITA 30/BANG/2010

• Counselvise Citation: 3021114 RSA 2010
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-06-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 13-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSAN THOMAS JOSE
• Keywords: Retrospective amendment
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER I.T.A. NOS.30 & 31/BANG/2010 (ASSESSMENT YEARS : 2005-06 & 2006-07) M/S. YOJAKA MARINE PVT. LTD., 3-28/43, II FLOOR, ABCO TRADE CENTRE, NH 17, KOTTARA CHOWKI, MANGALURU-575 006 . APPELLANT. PAN AAACY 1852D VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), MANGALORE. .. RESPONDENT. APPELLANT BY : SMT. SHEETAL BORKAR. RESPONDENT BY : SMT. SUSAN THOMAS JOSE. DATE OF HEARING : 14.06.2012. DATE OF PRONOUNCEMENT : 25.07.2012. O R D E R PER SHRI JASON P. BOAZ : THESE TWO APPEALS ARE DIRECTED BY THE ASSESSE E AGAINST THE CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), MANGALO RE DT.10.11.2009 FOR ASSESSMENT YEARS 2005-06 AND 2006-07. AS COMMON ISSUES ARE IN VOLVED, THESE APPEALS ARE BEING DISPOSED OFF BY WAY OF A COMMON ORDER. 2. THE FACTS OF THE CASE, IN BRIEF, ARE AS UNDE R : 2.1 THE ASSESSEE COMPANY IS A MARINE WORKS CONT RACTOR AND SUPPLIER OF MACHINERY AND EQUIPMENT ON HIRE. IN BOTH THE ASSESSMENT YEA RS UNDER CONSIDERATION, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IA OF TH E INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS 'THE ACT') ON THE GROUND THAT IT HAD UNDERTAKEN THE CONSTRUCTION OPERATION AND MAINTENANCE OF AN INFRASTRUCTURE FACI LITY IN PURSUANCE OF AN AGREEMENT WITH THE INLAND WATERWAYS AUTHORITY OF INDIA (INAI) WHICH CONSISTED OF BANK PROTECTION 2 ITA NO. 30 & 31/BANG/2010 WORK IN THE CHAMPAKARA AND UDYOGAMANDAL CANALS IN K ERALA AND PROTECTION OF TAPI RIVER BANK UNDER THE AUTHORITY OF SURAT MUNICIPAL C ORPORATION, GUJARAT. THE ASSESSING OFFICER AFTER EXAMINING THE AGREEMENTS FOR THESE W ORKS, UNDERTAKEN BY THE ASSESSEE CAME TO THE CONCLUSION THAT THE AGREEMENT REPRESENT ED ONLY A WORKS CONTRACT GRANTED TO THE ASSESSEE FOR REFRURBISHMENT OF A PORTION OF THE PROTECTION WALL OF THE CANALS AND THE RIVER BANK RESPECTIVELY AND THAT THE WORK ORDERS IS SUED BY IWAI AND SURAT MUNICIPAL CORPORATION CARRIED OUT BY THE ASSESSEE DID NOT HAV E ANY ELEMENT OF DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURAL FACIL ITY AS CLAIMED BY THE ASSESSEE AND THEREFORE DISALLOWED THE ASSESSEES CLAIM FOR DEDUC TION UNDER SECTION 80IA OF THE ACT IN THE ORDERS OF ASSESSMENT. 2.2 THE ASSESSEE CARRIED THE MATTER IN APPEAL B EFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE ARGUMENTS PUT FORWARD BY THE ASSESS EE, THE DETAILS OF THE CONTRACT WORKS ON RECORD, THE JUDICIAL DECISIONS CITED AND R ELIED ON BY THE ASSESSEE, ETC AND AFTER DETAILED DISCUSSION THEREON HELD THAT THE ASSESSEE COMPANY IS A MERE CONTRACTOR EXECUTING CIVIL WORKS FOR AN INFRASTRUCTURE ENTERPR ISE, VIZ. IWAI AND SURAT MUNICIPAL CORPORATION AND IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT AS IT IS HIT BY THE EXPLANATION THERETO. 3. AGGRIEVED BY THE ORDERS OF THE LEARNED CIT(A ), THE ASSESSEE IS NOW IN APPEAL BEFORE US. IN SIMILAR GROUNDS OF APPEAL FOR BOTH T HE ASSESSMENT YEARS, THE ASSESSEE HAS SUBMITTED AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE APPRECIATED THAT THE A PPELLANT HAD SATISFIED THE REQUIREMENTS OF SECTION 80IA PRESCRIBED UNDER THE S TATUTE AS APPLICABLE TO THE YEARS UNDER CHALLENGE AND THEREFORE OUGHT TO H AVE ALLOWED THE DEDUCTION AS CLAIMED FOR. 2. THE COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT WAS OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILI TY AND THEREFORE THE 3 ITA NO. 30 & 31/BANG/2010 DISALLOWANCE AS MADE BY THE ASSESSING AUTHORITY OUG HT NOT TO HAVE BEEN UPHELD BY HIM. 3. THE COMMISSIONER (A) OUGHT TO HAVE APPRECIATED T HAT THERE BEING NO WORKS CONTRACT INVOLVED THE DISALLOWANCE OF DEDUCTI N UNDER SECTION 80IA BY THE ASSESSING OFFICER WAS NOT JUSTIFIED. 4. WITHOUT PREJUDICE, THE COMMISSIONER (A) OUGHT T O HAVE APPRECIATED THAT THE DECISION OF THE SPECIAL BENCH OF THE HON'BLE IT AT OF MUMBAI IN THE CASE OF M/S. B.T. PATIL & SONS BELGAUM CONSTRUCTION PVT LTD VS.ACIT (ITA NOS.1408 & 1409/PN/2003 DT.26.10.2009) WAS DISTINGU ISHABLE ON FACTS AND NOT APPLICABLE TO THE FACTS OF THE CASE ON HAND. 5. WITHOUT PREJUDICE, THE COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE EXPLANATION TO SECTION 80IA WAS INSERTED ONLY I N 2007 THOUGH WAS MADE EFFECTIVE RETROSPECTIVELY FROM 1.4.2000 WHICH THE A PPELLANT COULD NOT HAVE FORESEEN AND OUGHT TO HAVE ALLOWED THE DEDUCTION AS CLAIMED FOR. 6. THE COMMISSIONER (A) ERRED IN CONFIRMING THE INT EREST LEVIED UNDER SECTION 234B & 234D OF THE ACT. 7. FOR THOSE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 4.1 THE GROUNDS OF APPEAL AT S.NOS.1 TO 5 , ALL PERTAIN TO THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. THE LEARN ED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE IN THE RELEVANT PERIODS HAD CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT ON THE GROUND THAT IT HAD U NDERTAKEN THE CONSTRUCTION AND MAINTENANCE OF THE FOLLOWING INFRASTRUCTURAL FACIL ITIES : I) REFURBISHMENT AND MAINTENANCE OF THE PERMANENT B ANKS OF THE CHANAPAKARA AND UDYOGAMANDAL CANALS IN NATIONAL WATERWAY NO.3 IN KE RALA IN PURSUANCE OF AN AGREEMENT WITH THE IWAI, A DIVISION OF THE MINISTRY OF SHIPPING AND TRANSPORT, GOVT. OF INDIA. II) PROTECTION WORK OF THE TAPI RIVERBANKS UNDER TH E AUTHORITY OF THE SURAT MUNICIPAL CORPORATION, GUJARAT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD SATISFIED ALL THE REQUIREMENTS FOR BEING GRANTED DEDUCTION UNDER SECT ION 80IA OF THE ACT AND THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED THE DEDUCTION CLAIMED. IT WAS SUBMITTED THAT THE ASSESSEE WAS OPERATING AND MAINTAINING THE SAID INF RASTRUCTURAL FACILITIES AT (I) AND (II) 4 ITA NO. 30 & 31/BANG/2010 (SUPRA) DURING THE RELEVANT PERIOD AND CONTENDED TH AT THE LEARNED CIT(A)S VIEW THAT THE WORK CARRIED OUT BY THE ASSESSEE WAS MERELY A WORKS CONTRACT WAS ERRONEOUS. IT WAS CONTENDED BY THE LEARNED CIT(A) THAT THE ASSESSEES WORK WAS THAT OF A WATER SUPPLY PROJECT WHICH FALLS IN THE CATEGORY OF INFRASTRUCTU RAL FACILITY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 80IA(4)(I) AND EXPLANATION (C ) THERETO. IT WAS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT IT WAS NOT NE CESSARY FOR THE ENTIRE INFRASTRUCTURE TO BE DEVELOPED BY THE ASSESSEE AND THE FACT THAT T HE ASSESSEE WAS INVOLVED IN THE DEVELOPMENT OF A PART OF AN INFRASTRUCTURE FACILITY WAS SUFFICIENT FOR IT TO CLAIM AND BE ALLOWED THE DEDUCTION UNDER SECTION 80IA. IT WAS F URTHER ARGUED THAT THE OBSERVATION THAT THE WORK CARRIED OUT WAS A WORKS CONTRACT DOE S NOT AFFECT THE FACT THAT IT WAS PART OF DEVELOPMENT ACTIVITY, WITHOUT WHICH THE CANAL WOULD NOT BE COMPLETE. 4.2 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS IN SUPPORT OF I TS CLAIM FOR ALLOWING DEDUCTION UNDER SECTION 80IA OF THE ACT. I) CIT VS. ABG HEAVY INDUSTRIES LTD REPORTED IN 322 ITR 323 (BOM) II) CO-ORDINATE BENCH DECISION OF THE BANGALORE TRI BUNAL IN THE CASE OF ACIT VS. JSR CONSTRUCTION P. LTD IN ITA NO.898/BANG/2009 DT.29.3 .2011. 4.3 THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. IT WAS SUBMITTED THAT THE PROVISIONS OF THE EXPLANATION TO SECTION 80IA(3) CLARIFIES THE POSITION IN AS MUC H AS, VIS--VIS THE FACTS OF THE PRESENT CASE, IT CLEARLY ESTABLISHES THAT THE ASSESSEE HAS ONLY CARRIED OUT A WORKS CONTRACT AND WAS IN NO WAY INVOLVED IN THE DEVELOPMENT OF ANY IN FRASTRUCTURE FACILITY. THE LEARNED DEPARTMENTAL REPRESENTATIVE DREW OUR ATTENTION TO P AGES 1,2,5 AND 6 OF THE PAPER BOOK FILED BY THE ASSESSEE ON 8.6.2010 WHEREIN THE DEVEL OPER OF THE CHAMPAKARA AND 5 ITA NO. 30 & 31/BANG/2010 UDYOGMANDAL CANALS IN KERALA, VIZ. THE INLAND WATER WAYS AUTHORITY OF INDIA (IWAI) HAD AWARDED WORKS CONTRACT TO THE ASSESSEE FOR RIP-RAP MASONERY FOR PROTECTION OF THE WALLS OF THESE CANALS. THE LEARNED DEPARTMENTAL REPRESE NTATIVE SUBMITTED THAT IT IS COMMON KNOWLEDGE THAT THESE CANALS HAVE BEEN DEVELOPED AND CONSTRUCTED DECADES AGO AND THE ASSESSEE WAS IN NO WAY INVOLVED IN THAT PROCESS OF DEVELOPMENT OR CONSTRUCTION OR CREATING THE INFRASTRUCTURE THEREOF. WHAT THE ASSE SSEE HAS BEEN ENGAGED TO DO, IT IS SUBMITTED, IS ONLY THE REPAIR WORK AND MAINTENANCE THEREOF IN THE RELEVANT PERIOD WHICH IS A MERE WORKS CONTRACT IN THE FORM OF REPAIRS TO THE ALREADY EXISTING CANALS, RATHER THAN THE CREATION OF ANY INFRASTRUCTURE. THE LEARNED DE PARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT IT WAS IN THIS VIEW OF THE MATTER TH AT THE LEARNED CIT(A) HAD, AS PER HIS DETAILED ORDER, HELD THAT WHAT THE ASSESSEE HAD EXE CUTED IN THE RELEVANT PERIOD IN RESPECT OF THE EMBANKMENTS OF THE CHAMPAKARA AND UD YOG MANDAL CANALS AND THE TAPI RIVERBANKS WAS MERELY A WORKS CONTRACT AND NOT THE CREATION OR DEVELOPMENT OF ANY NEW INFRASTRUCTURE AS CLAIMED AND HAD THEREFORE RIGHTLY DISALLOWED THE ASSESSEES CLAIM FOR DEDUCTION. 80IA OF THE ACT FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE BOMBAY TRIBUNAL IN THE CASE OF B.T.PATIL & SONS, BE LGAUM CONSTRUCTION PVT. LTD. VS. ACIT IN ITA NOS.1408 & 1409/PN/2003 DT.26.10.2009. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ISSUE WAS ALSO S QUARELY COVERED IN FAVOUR OF REVENUE BY THE DECISION OF THE ITAT, CHENNAI IN THE CASE OF ACIT VS. INDWEL LEASINGS P. LTD. (2009) 313 ITR (AT) 118. THE LEARNED DEPAR TMENTAL REPRESENTATIVE SUBMITTED THAT THE FACTS OF THIS CITED CASE WAS IDENTICAL TO THAT OF THE ASSESSEE AND WHEREIN THE TRIBUNAL HAD WHILE DISMISSING THE CLAIM FOR DEDUCTI ON UNDER SECTION 80IA HELD THAT IT WAS A CONDITION PRECEDENT THAT THE BENEFIT OF THE DEDUC TION WAS AVAILABLE ONLY TO THE DEVELOPER OF THE INFRASTRUCTURE FACILITY AND IT COU LD NOT BE EXTENDED TO A PERSON WHO 6 ITA NO. 30 & 31/BANG/2010 ENTERS INTO A CONTRACT FOR EXECUTING WORKS CONTRACT S. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED IN VIEW OF THE FACTS CITED AND THE JUDICIAL DECISIONS RELIED ON (SUPRA) THE ORDER OF THE LEARNED CIT(A) ON THIS ISS UE OUGHT TO BE UPHELD AND THE ASSESSEES APPEAL WAS LIABLE TO BE DISMISSED. 5.0 WE HAVE HEARD BOTH PARTIES, CAREFULLY PERUSED AND CONSIDERED THE MATERIAL ON RECORD VIZ. THE ORDERS OF THE AUTHORITIES BELOW, TH E WRITTEN SUBMISSIONS MADE AND THE JUDICIAL DECISIONS CITED AND PLACED RELIANCE ON. I T IS A MATTER OF RECORD THAT THE ASSESSEE IN THE RELEVANT PERIOD HAD EXECUTED THE FOLLOWING W ORKS I) REFURBISHMENT/REPAIRS I.E. RIP-RAP MASONARY ON THE PERMANENT BANKS OF THE CHAMPAKARA AND UDYOG MANDAL CANALS IN KERALA IN PUR USUANCE OF A WORKS CONTRACT WITH THE DEVELOPER VIZ. IWAI UNDER THE MIN ISTRY OF SHIPPING & TRANSPORT, GOVT. OF INDIA. II) PROTECTION WORK FOR THE TAPI RIVERBANK UNDER TH E AUTHORITY OF THE SURAT MUNICIPAL CORPORATION, GUJARAT. THE ASSESSEE CLAIMED A DEDUCTION UNDER SECTION 80IA OF THE ACT THEREON, ON THE GROUND THAT IT HAD UNDERTAKEN THE CONSTRUCTION AND MAINTEN ANCE OF AN INFRASTRUCTURE FACILITY. 5.1 SECTION 80IA(I) READS AS UNDER : WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUDE S ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRISE FR OM ANY BUSINESS REFERRED TO IN SUB-SECTION (4) (SUCH BUSINESS BEING HEREINAF TER REFERRED TO AS THE ELIGIBLE BUSINESS), THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTIN G THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION OF AN AMOUNT EQUAL TO HUNDRED PER CENT OF THE PROFITS AND GAINS DERIVED FROM SUCH BUSINESS FOR TEN CONSEC UTIVE ASSESSMENT YEARS. IT IS THE CLAIM OF THE ASSESSEE THAT IT IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA ON THE GROUND THAT ITS BUSINESS ACTIVITY AS PER SUB-SECTIO N (4) THEREOF IS THE DEVELOPING, OPERATING AND MAINTAINING OF INFRASTRUCTURE FACILIT Y NAMELY, THE REPAIR AND MAINTENANCE 7 ITA NO. 30 & 31/BANG/2010 OF PROTECTION WALLS FOR THE TWO CANALS IN KERALA AN D THE RIVERBANK IN GUJARAT. WE HAVE PERUSED PAGES 1 TO 6 OF THE PAPER BOOK FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON 8.6.2012 AND FIND THAT THE DESCRIPTION OF THE WORK EXECUTED BY THE ASSESSEE IN THE RELEVANT PERIOD IS CERTAINLY NOT THE DEVELOPMENT OF ANY INFRASTRUCTURE AS THE CHAMPAKARA AND UDYOGMANDAL CANALS IN KERALA WERE CO NSTRUCTED/DEVELOPED DECADES AGO. WHAT WORK THE ASSESSEE EXECUTED IN RESPECT OF THESE TWO CANALS AND THE TAPI RIVERBANK VIZ. RIP-RAP MASONARY FOR PROTECTION OF T HE CANAL BANK AND RIVER BANK CAN AT BEST BE WORK WHICH IS A SUB-ACTIVITY IN THE CATEGOR Y OF REPAIRS AND MAINTENANCE THEREOF RATHER THAN DEVELOPMENT OF AN INFRASTRUCTURE FACILI TY NAMELY, INLAND WATERWAYS WHICH HAS BEEN DONE BY IWAI. WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE EXECUTED WORKS CONTRACTS ON BEHALF OF THE CONCERNED GOVERNMENT BOD IES AND THERE IS CERTAINLY NO ELEMENT OF DEVELOPING OR OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAINING OF ANY INFRASTRUCTURE FACILITY AS ENVIS AGED IN CLAUSE ( C ) TO THE EXPLANATION TO SUB-SECTION(4) OF SECTION 80IA OF THE ACT. 5.2 THE EXPLANATION TO SECTION 80IA INSERTED BY FINANCE ACT, 2007, WITH RETROSPECTIVE EFFECT FROM 1.4.2000 READS AS UNDER : FOR REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY TO A PERSON WHO EXECUTES A WORK CONTRACT ENTERED INTO WITH THE UNDERTAKING OR ENTERPRISE AS THE CASE MAY BE. THE EXPLANATION (SUPRA) INSERTED IN THE ACT IS CLAR IFICATORY IN NATURE AND CLEARLY SPELLS OUT THE LEGISLATIVE INTENT THAT THE BENEFIT OF DEDU CTION UNDER SECTION 80IA OF THE ACT WAS NOT TO BE GRANTED OR EXTENDED TO WORK CONTRACTORS A S IN THE INSTANT CASE OF THE ASSESSEE. 8 ITA NO. 30 & 31/BANG/2010 5.3 THE ASSESSEE HAS PLACED RELIANCE ON THE FOL LOWING JUDICIAL DECISIONS IN SUPPORT OF THE PROPOSITION THAT IT IS ENTITLED TO CLAIM THE BE NEFIT OF DEDUCTION UNDER SECTION 80IA OF THE ACT. I) CIT VS. ABG HEAVY INDUSTRIES LTD (322 ITR 323) ( BOM) II) ACIT VS. JSR CONSTRUCTION P. LTD & OTHERS OF TH E CO-ORDINATE BENCH OF THIS TRIBUNAL IN ITA NO.898/BANG/2009 DT.29.3.2011. WE HAVE PERUSED BOTH THESE CITED DECISIONS (SUPRA) AND, WITH DUE RESPECT, WE FIND THAT THE FACTS OF THESE CASES ARE DISTINCT AND DIFFERENT FROM THOSE OF THE INSTANT CASE AND THEREFORE WOULD NOT COME TO ITS RESCUE. 5.3.1 IN THE CASE OF ABJ HEAVY INDUSTRIES LTD & OTHERS (SUPRA), THE ASSESSEE ENTERED INTO A CONTRACT FOR THE INSTALLATION, TESTING, COMM ISSIONING AND MAINTENANCE OF CONTAINER HANDLING CRANES AT THE CONTAINER TERMINAL OF JAWAHA RLAL NEHRU PORT TRUST (JNPT) IN OPENABLE CONDITION ON BOLT BASIS. THIS WORK WAS CERTIFIED BY JNPT TO BE AN INTEGRAL PART OF SETTING UP OF THE PORT WHICH BY DEFINITION WAS INCLUDED IN THE PURVIEW OF THE EXPRESSION INFRASTRUCTURE FACILITY. THE MUMBAI TRI BUNAL AND THE HON'BLE HIGH COURT OF BOMBAY HELD THAT THE ASSESSEES HAD DEVELOPED THE I NFRASTRUCTURE FACILITY ON BOLT BASIS AND WAS THEREFORE ENTITLED TO DEDUCTION UNDER SECTION 80IA. IN THE INSTANT CASE OF THE ASSESSEE, THE FACTS ARE CLEARLY DIFFERENT. NO INFRASTRUCTURE WAS DEVELOPED BY THE ASSESSEE. RATHER, IT ONLY CARRIED OUT THE WORKS CO NTRACT OF REFURBISHING/REPAIRS AND PROTECTION OF THE PERMANENT WALLS OF THE EXISTING C ANALS AND RIVERBANKS UNDER WORKS CONTRACT FROM THE IWAI AND GOVT. OF GUJARAT. THERE FORE, WE ARE OF THE VIEW THAT THE FACTS OF THE CITED CASE ARE DIFFERENT AND THE FINDI NG THEREON WOULD NOT COME TO THE ASSESSEES RESCUE. 9 ITA NO. 30 & 31/BANG/2010 5.3.2 IN THE CASE OF JSR CONSTRUCTIONS P. LTD. (SUPRA), THE FACTS WERE THAT THE ASSESSEE WAS A MEMBER OF A TWO ENTITY CONSORTIUM W HICH WAS AWARDED A CONTRACT BY NHAI. THE ENTIRE WORK WAS EXECUTED BY THE ASSESSEE ON A BACK TO BACK BASIS WITH ALL THE TERMS AND CONDITIONS THERETO. THE ENTIRE CONTR ACT AMOUNT OF OVER RS.100 CRORES. THE TRIBUNAL FOUND THAT THE ASSESSEE HAD TAKEN THE ENTIRE RISK FOR THE SETTING UP OF THE INFRASTRUCTURE PROJECT BY INVESTING THE ENTIRE CAPI TAL AND SO WAS ENTITLED TO RECEIVE THE ENTIRE CONTRACT RECEIPTS. IT, THEREFORE, HELD THAT THE ASSESSEE WAS ENTITLED FOR DEDUCTION OF 80IA OF THE ACT AS IT WAS INVOLVED IN SETTING UP INFRASTRUCTURE IN THE COUNTRY. IN THE INSTANT CASE OF THE ASSESSEE, THE FACTS ARE STARKLY DIFFERENT. THE ASSESSEE, IN THE INSTANT CASE WAS ONLY INVOLVED IN WORKS CONTRACTS G IVEN TO IT BY THE DEVELOPERS FOR REFURBISHING/REPAIRING THE PROTECTION WALLS OF THE CANALS AND RIVERBANKS AND NOT IN THE DEVELOPMENT OF ANY INFRASTRUCTURE FACILITY AS CLAIM ED. THUS, WE FIND THAT THE FACTS OF THE CITED CASE BEING DIFFERENT AND DISTINGUISHABLE FROM THAT OF THE INSTANT CASE, THE SAME WOULD NOT COME TO THE AID OF THE ASSESSEE. 5.4 THE LEARNED CIT(A) IN HIS ORDER AFTER DETAI LED EXAMINATION OF THE ASSESSEES CLAIM AT PARAS 3 TO 20 THEREOF HELD THAT THE ASSESSEE WAS NOT ENTITLED TO BE ALLOWED DEDUCTION UNDER SECTION 80IA OF THE ACT IN THE FACTS AND CIRC UMSTANCES OF THE CASE AS ALSO DISCUSSED IN PARAS 4.1 TO 5.3 ABOVE. IN DOING SO, HE HAS FOLLOWED AND APPLIED THE DECISION OF THE SPECIAL BENCH OF THE HONBLE ITAT, MUMBAI IN THE CASE OF M/S. B.T. PATIL & SONS, BELGAUM CONSTRUCTION PVT LTD. VS. ACI T IN ITA NOS.1408 & 1409/PN/2003 DT.26.10.2009. IN THIS CASE, THE SPECIAL BENCH OF THE TRIBUNAL HELD THAT THE INSERTION AND SUBSTITUTION OF THE EXPLANATION TO SECTION 80IA OF THE ACT WITH RETROSPECTIVE EFFECT FROM 1.4.2000 WAS ONLY IN ORDER TO CLARIFY THAT THE DEDUCTION. 80IA OF THE ACT WOULD NOT BE ALLOWED IN RELATION TO A BUSINESS IN THE NATURE OF WORKS CONTRACTS. THE SPECIAL BENCH 10 ITA NO. 30 & 31/BANG/2010 OBSERVED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTI ON. 80IA FAILED BECAUSE IT WAS NEITHER A DEVELOPER OF INFRASTRUCTURE, NOR DID IT D EVELOP, MAINTAIN AND OPERATE INFRASTRUCTURE FACILITY. IT WAS ALSO CLARIFIED THA T THE DEDUCTION UNDER SECTION 80IA OF THE ACT WOULD NOT BE ALLOWABLE TO A PERSON WHO EXECUTES A WORKS CONTRACT ENTERED INTO WITH THE UNDERTAKING OR ENTERPRISE WHO DEVELOPED THE INF RASTRUCTURE FACILITY. ON CAREFUL CONSIDERATION, WE ARE OF THE CONSIDERED VIEW THAT T HE FACTS AND CIRCUMSTANCES OF THE ABOVE CITED CASE ARE IDENTICAL TO THOSE OF THE ASSE SSEE IN THE PRESENT CASE ON HAND AND THEREFORE IT IS CLEAR THAT THE ASSESSEE IS NOT ELIG IBLE TO BE ALLOWED DEDUCTION UNDER SECTION 80IA OF THE ACT. IN THE COURSE OF ARGUMENT S, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAD CITED AND PLACED RELIANCE ON THE DECISION OF THE CHENNAI TRIBUNAL IN THE CASE OF ACIT VS. INDWEL LININGS P. LTD. (2009) 313 ITR (AT) 118. WE HAVE PERUSED THE CITED DECISION AND FIND THAT THE ASSESSEE IN TH AT CASE WE ENGAGED IN UNDERTAKING WORKS FOR IN SITU LINING FOR WATER SUPPLY PROJECT A ND ANTI-CORROSIVE LINING AND HAD CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT. THE TRIBU NAL AFTER EXAMINING THE FACTS OF THE CASE HELD THAT THE BENEFIT OF DEDUCTION UNDER SECTI ON 80IA WAS AVAILABLE ONLY TO A DEVELOPER AS IT WAS A CONDITION PRECEDENT FOR GRANT OF THE BENEFIT OF THIS SECTION THAT THE UNDERTAKING OR ENTERPRISE MUST DRIVE INCOME FROM CA RRYING ON THE BUSINESS OF DEVELOPING AN INFRASTRUCTURE FACILITY. THE TRIBUNA L HELD THAT THE ASSESSEE HAD ENTERED INTO A CONTRACT FOR EXECUTING WORKS CONTRACT AND TH EREFORE THE BENEFIT OF DEDUCTION UNDER SECTION 80IA WOULD NOT BE AVAILABLE TO IT. WE FIND THAT THE FACTS OF THE CITED CASE ARE IDENTICAL TO THAT OF THE PRESENT CASE AND ARE THERE FORE OF THE VIEW THAT THE ASSESSEE IS NOT ELIGIBLE FOR BEING ALLOWED DEDUCTION UNDER SECT ION 80IA OF THE ACT. 11 ITA NO. 30 & 31/BANG/2010 5.5 FROM THE DISCUSSION IN PARAS 5 TO 5.4 OF TH IS ORDER (SUPRA), IT IS CLEAR THAT THE JUDICIAL DECISIONS CITED BY THE ASSESSEE FOR CLAIMI NG DEDUCTION UNDER SECTION 80IA ARE CLEARLY DISTINGUISHABLE AND WOULD NOT BUTTRESS ITS CLAIM FOR THE SAID DEDUCTION. RATHER, WE ARE OF THE CONSIDERED VIEW THAT THE JUDICIAL DEC ISIONS AND RELIED ON BY THE LEARNED DR AND THE LEARNED CIT(A) VIZ. (I) INDWEL LININGS P . LTD. (SUPRA) AND (II) B.T. PATIL & SONS, BELGAUM (SUPRA) ARE FACTUALLY IDENTICAL TO TH AT OF THE PRESENT CASE. WE, THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN THESE TWO DECISIONS HOLD THAT THE ASSESSEE IS A MERE CONTRACTOR EXECUTING CIVIL WORKS CONTRACTS F OR AN INFRASTRUCTURE UNDERTAKING/ENTERPRISE AND IS THEREFORE NOT ELIGIBL E TO BE ALLOWED DEDUCTION UNDER SECTION 80IA OF THE ACT. THE LEARNED CIT(A)S ORDE R ON THIS ISSUE IS UPHELD AND CONSEQUENTLY THE GROUNDS OF APPEAL RAISED BY THE AS SESSEE ARE DISMISSED. 6. CONTRACT RECEIPTS (FOR ASSESSMENT YEAR 2006- 07) 6.1 IN THE GROUNDS RAISED AT S.NO.6 FOR ASSESSM ENT YEAR 2006-07, THE ASSESSEE HAS CHALLENGED THE LEARNED CIT(A)S ACTION IN CONFIRMI NG THE ASSESSING OFFICERS ADDITION OF A SUM OF RS.40,582 BEING THE AMOUNT OF SHORTFALL IN THE CONTRACT RECEIPTS DECLARED BY THE ASSESSEE IN ITS FINAL ACCOUNTS VIS--VIS THE C ORRESPONDING AMOUNTS OF CONTRACT RECEIPTS FROM INDIAN OIL CORPORATION, MANGALORE CHE MICALS & FERTILISERS AND THE INDIAN NAVY ON THE GROUND THAT THE SAME WAS EXPLAINED AND ADEQUATE OPPORTUNITY WAS NOT AFFORDED TO IT TO RECONCILE THE SAID DIFFERENCES. 6.2 THE LEARNED COUNSEL FOR THE ASSESSEE REITER ATED THE CLAIMS RAISED IN THE GROUNDS OF APPEAL. PER CONTRA, THE LEARNED DEPARTMENTAL RE PRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. IT WAS SUBMITTED THAT TH E ISSUE HAS BEEN DEALT WITH IN DETAIL IN THE ORDERS OF BOTH THE ASSESSING OFFICER & LEARNED CIT(A) AND THAT THE ASSESSEE COULD NOT RECONCILE THE DIFFERENCE BETWEEN THE CONTRACT R ECEIPTS DECLARED AND THE 12 ITA NO. 30 & 31/BANG/2010 CORRESPONDING CONTRACT RECEIPTS REFLECTED IN THE TD S CERTIFICATES OF CERTAIN PARTIES AND CONSEQUENTLY THE LEARNED COUNSEL FOR THE ASSESSEE H AD ADMITTED THE DIFFERENCE OF RS. 40,582 BEFORE THE ASSESSING OFFICER AND OFFERED THE SAME FOR TAX. THE LEARNED D.R., THEREFORE, PRAYED THAT THE ORDERS OF THE AUTHORITIE S BELOW BE UPHELD. 6.3 WE HAVE HEARD BOTH PARTIES AND CAREFULLY PE RUSED AND CONSIDERED THE SUBMISSIONS MADE AND THE MATERIAL ON RECORD. WE FI ND THAT BEFORE US EXCEPT FOR REITERATING THE GROUND RAISED, THE LEARNED COUNSEL FOR THE ASSESSEE WAS NOT ABLE TO CONTROVERT THE FINDINGS OF THE ASSESSING OFFICER AN D LEARNED CIT(A) THAT THE ASSESSEE WAS UNABLE TO EXPLAIN OR RECONCILE THE DIFFERENCE O F RS.40,582 IN THE CONTRACT RECEIPTS DECLARED BY THE ASSESSEE AND THE CONTRACT RECEIPTS REFLECTED IN THE TDS CERTIFICATES OF INDIAN OIL CORPORATION, MANGALORE CHEMICALS & FERTI LISERS AND THE INDIAN NAVY. THIS FACT WAS ACKNOWLEDGED BY THE LEARNED COUNSEL FOR TH E ASSESSEE BEFORE THE ASSESSING OFFICER WHEN CONFRONTED WITH THE SAME BY THE ASSESS ING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS. THESE FACTS ARE ALSO RECOR DED AT PAGE 4 OF THE ORDER OF ASSESSMENT AND IN PARAS 21 AND 22 OF THE ORDER OF T HE LEARNED CIT(A). IN THIS VIEW OF THE MATTER, WE HAVE NO HESITATION IN CONFIRMING THE ADDITION OF RS.40,582 MADE BY THE ASSESSING OFFICER IN RESPECT OF UNDECLARED CONTRACT RECEIPTS. THIS GROUND OF APPEAL IS THEREFORE DISMISSED. 7. THE ASSESSEE HAS CHALLENGED THE CHARGING OF INTEREST UNDER SECTIONS 234B AND 234D OF THE ACT IN THE ORDER OF ASSESSMENT. THE CHARGING OF INTER EST IS MANDATORY AND CONSEQUENTIAL IN NATURE AND THE ASSESSING OFFICER H AS NO DISCRETION IN THE MATTER AND THEREFORE HIS ACTION IN CHARGING THE SAME IS UPHEL D. 8. THE GROUND OF APPEAL AT S.NO.7 (ASSESSMENT YEAR 2005-06) IS GENERAL IN NATURE AND NO ADJUDICATION IS CALLED FOR THEREON. 13 ITA NO. 30 & 31/BANG/2010 9. IN THE RESULT, THE ASSESSEES APPEALS FOR ASSE SSMENT YEARS 2005-06 AND 2006-07 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JULY, 2012. SD/- SD/- (N.V. VASUDEVAN) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMB ER BANGALORE, DATED: 25.07.2012. *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, - B BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDE R SR. PRIVATE SECRETARY, ITAT, BANGALORE