M/S. UNITY INFRAPROJECTS LTD., MUMBAI V. DY.CIT., CENT.CIR.-45, MUMBAI

ITA 3469/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8046 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 03-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 02-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH RANJAN PRASAD
• Keywords: Retrospective amendment; Competent authority
• Section: 80IB

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO. 3466 /MUM/2011 (A.Y. 2003-04) ITA NO. 3467 /MUM/2011 (A.Y. 2004-05) ITA NO. 3468 /MUM/2011 (A.Y. 2005-06) ITA NO.3469 /MUM/2011 (A.Y. 2006-07) ITA NO.3470 /MUM/2011 (A.Y. 2007-08) M/S. UNITY INFRAPROJECTS LTD.1252, PUSHPANJALI APARTMENTS, OLD PRABHADEVI ROAD, PRABHADEVI, MUMBAI-400 025. / VS. DCIT CENTRAL CIRCLE-45 AAYAKAR BHAVAN MUMBAI-400 020. ( '# / // / APPELLANT) ( $%'# / RESPONDENT) '# & ' & ' & ' & ' /APPELLANT BY : SHRI VIJAY MEHTA $%'# & ' & ' & ' & ' /RESPONDENT BY : SHRI RAJESH RANJAN PRASAD & () / // / DATE OF HEARING 1 6 .09.2014 *+, & () / DATE OF PRONOUNCEMENT : 10.10.2014 - - - - / / / / O R D E R PER JOGINDER SINGH (JM) : THIS BUNCH OF FIVE APPEALS BY THE ASSESSEE FOR DIFF ERENT ASSESSMENT YEARS HAVING IDENTICAL GROUNDS CHALLENGI NG THE ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 2 IMPUGNED ORDERS ALL DATED 16/2/2011 WHEREIN THE LD . FIRST APPELLATE AUTHORITY CONFIRMED THE DISALLOWANCE OF D EDUCTION U/S.80IA AND SEC.80IB OF THE INCOME TAX ACT, 1961 ( THE ACT). 2. DURING HEARING OF THESE APPEAL THE LD. COUNSEL FOR THE ASSESSEE, SHRI VIJAY MEHTA, DID NOT PRESS THE ADDITI ONAL GROUNDS RAISED IN THE RESPECTIVE APPEALS, THEREFORE , THE ADDITIONAL GROUNDS, SO RAISED, ARE DISMISSED AS NOT PRESSED. BROADLY, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT ONE TENDER WAS ALLOTTED TO THE ASSESSEE FOR DEVELOPING/CONSTRUCTING HOUSES ON TURNKEY BASIS AT BAKARWALA AND NARELA, BY DELHI DEVELOPMENT AUTHORIT Y (DDA), ON THE TERMS AND CONDITIONS CONTAINED IN THE ORDER FOR WHICH OUR ATTENTION WAS INVITED TO PAGES 27 TO 38 O F THE PAPER BOOK. IT WAS SUBMITTED THAT AS PER THE WORK EXECUTI ON IT INCLUDES PLANNING, DESIGNING, SOIL TESTING, EARTH F ILLING, CIVIL WORK INCLUDING ITS ELECTRIFICATION, INFRASTRUCTURE AND SERVICES LIKE SEWERAGE, DRAINAGE, STREET LIGHTING, ROADS, WA TER SUPPLY, HORTICULTURE, LANDSCAPING ETC. THE ASSESSEE WAS ARG UED TO BE RESPONSIBLE FOR COMPLETE DEVELOPMENT, THUS IT WAS N OT SIMPLICITOR EXECUTION OF WORK CONTRACT RATHER COMPL ETE DEVELOPMENT OF THE PROJECT, THEREFORE, THE ASSESSE E IS ENTITLED TO DEDUCTION U/S. 80IB /80IA. IT WAS FURTHER SUBMIT TED THAT THE PROJECT WAS TO BE DEVELOPED TILL THE STAGE OF F IT FOR HABITATION WITHOUT ANY ADDITIONAL COST WITH ALL SER VICES. IT WAS EXPLAINED THAT BEFORE TAKING UP THE WORK THE LAY-OU T PLAN AS WELL AS BUILDING PLAN AND STRUCTURAL DESIGN ETC. WE RE TO BE GOT APPROVED FROM DDA/COMPETENT AUTHORITY. THE LD. COUN SEL FURTHER SUBMITTED THAT EVEN THE WHOLE PLANNING WAS DONE BY THE ASSESSEE AND FURTHER ASSERTED THAT THE ASSESSEE IS A ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 3 CREATOR OF THIS FACILITY, PURCHASED OWN MATERIAL HA VING ENTIRE RISK QUA THE PROJECT, THUS, THE ASSESSEE IS A DEVEL OPER. RELIANCE WAS PLACED UPON THE DECISION IN THE CASE O F VRM (INDIA) LTD. )ITA NO.811/DEL/2008 DATE 23/04/2010 A ND BY FURTHER CONTENDING THAT FOR ASSESSMENT YEAR 2008-0 9 THE LD. CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 30/12/2013. RELIANCE WAS ALSO PLACED ON THE D ECISION FROM HON'BLE BOMBAY HIGH COURT IN CIT VS. ABG HEAVY INDUSTRIES LTD.(322 ITR 323) , ITO VS. SURAKSHA REALTORS (ITA NO.4223/MUM/2010, M/S. PRATIBHA CONSTRUCTIONS & ENGINEERS (I) P. LTD. VS. ACIT (ITA NO.118/PN/2008) AND MAHALAXMI CONSTRUCTIONS VS. ACIT (ITA NO.433/PN/200 7). THE LD. AR FURNISHED THE COPIES OF AFOREMENTIONED/C ITED CASES. 2.1 ON THE OTHER HAND, THE LD. DR DEFENDED THE CONC LUSION DRAWN IN THE IMPUGNED ORDERS BY SUBMITTING THAT THE ASSESSEE IS MERELY A WORK CONTRACTOR FOR DDA AND TH E DEVELOPMENT IS DONE BY THE AUTHORITY BECAUSE THE AS SESSEE MERELY EXECUTED THE WORK GIVEN BY THE DDA. PLEA WAS ALSO RAISED THAT THE BUDGET WAS ALLOCATED BY THE DDA AND EVEN THE RISK FACTOR IS OF DDA AND NOT OF THE ASSESSEE . IT WAS PLEADED THAT THE DDA PROVIDES HOUSES TO THE PUBLIC, LAND IS OWNED BY DDA, FINANCED BY DDA, POLICY AND DECISION MAKING IS WITH DDA. IT WAS ASSERTED THAT IF DUE TO ANY REASONS THE PROJECT FAILS IT IS THE RESPONSIBILITY OF THE DDA AND NOT O F THE ASSESSEE. ANY KIND OF LOSS SUFFERING WAS ALSO ARGUE D TO BE OF DDA. FURTHER PLEA WAS RAISED THAT THERE IS A POSSIB ILITY THAT DDA MIGHT HAVE CLAIMED THE DEDUCTION THEREFORE, IF FURTHER ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 4 DEDUCTION IS ALLOWED TO THE ASSESSEE IT WILL AMOUNT TO DOUBLE DEDUCTION. BROADLY THE CONCLUSION DRAWN IN ASSESSME NT ORDER/IMPUGNED ORDER WAS DEFENDED. IN REPLY THE LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT DDA NEVER CLAIMED T HE BENEFIT UNDER THE IMPUGNED SECTION, THEREFORE, THERE IS NO QUESTION OF DOUBLE DEDUCTION. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. SINCE COMMON ISSU ES ARE INVOLVED IN ALL THESE APPEALS, THEREFORE, FOR THE S AKE OF BREVITY THESE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON AND CONSOLIDATED ORDER. THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY UNDERTOOK THE DEVELOPMENT AND CONSTRUCTION OF RESIDENTIAL BUILDINGS PURSUANT TO CONTRACTS AWARDED BY DELHI DEVELOPMENT AUTHORITY (DDA). THE ASSESSEE CLAIMED DEDUCTION U/S.80IA(4) AND 80IB(10) OF THE INCOME TA X ACT, 1961. THE LD. AO DISALLOWED THE CLAIM OF THE ASSESS EE ON THE GROUND THAT THE ASSESSEE IS NOT A DEVELOPER OF THE PROJECT AND MERELY WORKED AS A CONTRACTOR AND PLACED RELIANCE U PON THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. B.T. P ATIL AND SONS, BELGAUM CONSTRUCTIONS (P) LTD. VS. ACIT (2010 ) 35 SOT 171 WHEREIN IT WAS HELD THAT THE CLAIMED DEDUCTION IS ALLOWABLE ONLY TO THE ENTERPRISE WHICH IS ENGAGED I N DEVELOPING THE INFRASTRUCTURE PROJECTS. ON APPEAL, THE LD. CIT(A) AFFIRMED THE STAND OF THE AO, RESULTANTLY, T HE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL . 3.1 BEFORE COMING TO ANY CONCLUSION WE ARE REPRODUC ING HEREUNDER THE RELEVANT PROVISIONS OF THE ACT FOR RE ADY ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 5 REFERENCE AND ITS ANALYSIS WITH RESPECT TO THE FACT S OF THE PRESENT APPEALS:- 80IA (4A) THIS SEC. APPLIES TO ANY ENTERPRISE CARRYING ON THE BUSINESS OF DEVELOPING, MAINTAINING AND OPERATING ANY INFRASTRUCTURE FACILITY WHICH FUL FILS ALL THE FOLLOWING CONDITIONS NAMELY :- (I) THE ENTERPRISE IS OWNED BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF SUCH COMPANIES; (II) THE ENTERPRISE HAS ENTERED INTO AN AGREEMENT WITH THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR DEVELOPING, MAINTAINING AND OPERATING A NEW INFRASTRUCTURE FACILITY SUBJECT TO THE CONDITION THAT SUCH INFRASTRUCTURE FACILITY SHALL BE TRANSFERRED TO THE CENTRAL GOVERNMENT, STATE GOVERNMENT, LOCAL AUTHORITY OR SUCH OTHER STATUTORY BODY, AS THE CASE MAY BE, WITHIN THE PERIOD STIPULATED IN THE AGREEMENT; (III) THE ENTERPRISE STARTS OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR AFTER THE 1 ST DAY OF APRIL, 1995. 80IB(10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT. OF THE PROFITS DERIVED IN ANY ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 6 PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998, AND COMPLETES THE SAME BEFORE THE 31ST DAY OF MARCH, 2001 ; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE ; AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. 3.2 FOR FAIR ANALYSIS OF THE MATTER WE ARE EXPECTE D TO EXAMINE THE TERMS AND CONDITIONS AGREED BETWEEN THE ASSESSEE AND THE DDA. WE ARE REPRODUCING HEREUNDER THE CONDITIONS OF THE AWARD/ALLOTMENT, AS A SAMPLE, WHI CH ARE IDENTICAL IN ALL THE CASES AS CONTAINED IN NEGOTIAT ED TENDER AND AWARD OF WORK (NO.F.54(163)/SWD-9/DRK/DDA/A/200 1- 2002/1541 160/ DT.28 /2/02) TERMS & CONDITIONS 1) THE FLATS SHALL BE 5 (FIVE) STOREYED FRAMED STRUCTURE (1000 NOS.) WITH PLINTH AREA OF ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 7 42 SQM. EACH, IN CASE THE NUMBER OF UNITS/PLINTH AREA DECREASES DUE TO UNAVOIDABLE REASONS, THE COST SHALL BE PROPORTIONATELY REDUCED TO RS.7,190/- (RS.SEVEN THOUSAND ONE HUNDRED NINETY ONLY) PER SQM. II) THE SCOPE OF WORK AS STATED IN THE N.I.T. TO BE EXECUTED ON TURNKEY BASIS INCLUDES PLANNING, DESIGNING, SOIL-RESTING, EARTH-FILLING, CIVIL WORKS, INCLUDING ITS ELECTRIFICATION, INFRASTRUCTURE SERVICES, LIKE STREET LIGHTING, SEWERAGE, WATER SUPPLY, DRAINAGE, ROADS, HORTICULTURE, LANDSCAPING, PROVISION OF DUAL WATER SUPPLY SYSTEM, RAIN WATER HARVESTING AS ALSO CONSTRUCTION OF COMMUNITY HALL, SHOPPING CENTRE, BOUNDARY WALL, ELECTRIC SUB-STATION, INSTALLATION OF TRANSFORMER & EQUIPMENT IN IT, LAYING OF H.T. CABLES, L. T. NETWORK SERVICE CABLES ETC. AND MAKING THE UNITS COMPLETE AND HABITABLE INCLUDING WATCH & WARD FOR 3 (THREE) YEARS FROM THE DATE OF RECORDED COMPLETION. THIS SCOPE OF WORK GIVEN IN THE NIT IS ONLY INDICATIVE AND NOT EXHAUSTIVE. THE AGENCY SHALL BE RESPONSIBLE FOR EXECUTION OF ALL ITEMS REQUIRED FOR COMPLETING THESE HOUSES IN ALL RESPECTS TO MAKE THESE UNITS HABITABLE AND READY FOR OCCUPATION AS WELL AS FUNCTIONING OF ALL SERVICES, MAKING ENVIRONMENT -FIT FOR HABITATION WITHOUT ANY ADDITIONAL COST, COMPLETE AS PER DIRECTION OF THE ENGINEER-IN-CHARGE ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 8 III) THE FLATS WILL BE MAINTAINED TILL THESE ARE HANDED OVER TO THE ENGINEER-IN- CHARGE IN GOOD CONDITIONS AND FREE FROM ALL DEFECTS. IV) THE SERVICES WILL BE HANDED OVER TO THE VARIOUS LOCAL BODIES AFTER ITS COMPLETION AS PER APPROVED PLANS, ETC. AS STATED IN THE NIT ALSO. V ) BEFORE TAKING UP THE WORK, THE LAYOUT PLANS AS WELL AS BUILDING PLANS, STRUCTURAL DESIGNS ETC. ARE TO BE GOT APPROVED FROM DDA/COMPETENT AUTHORITY AS MENTIONED IN THE NIT BY ADHERING TO THE TIME SCHEDULE LAID DOWN IN THE NIT VI) THE AGENCY WILL ALSO BE RESPONSIBLE FOR GETTING THE FIRE FIGHTING ARRANGEMENTS , APPROVED FROM THE DELHI FIRE SERVICES BEFORE EXECUTION OF THE WATER SUPPLY SCHEME VII) THE REIMBURSEMENT OF INCREASE IN COST OF MATERIAL, LABOUR ETC. WILL BE APPLICABLE FROM THE DATE OF SUBMISSION OF ENVELOPE-C I.E. REVISED FINANCIAL BID INSTEAD OF SUBMISSION OF TENDER INITIALLY AND SUCH REIMBURSEMENT FOR ESCALATION IN COST UNDER CLAUSE-14 WOULD BE PAYABLE DURING THE STIPULATED PERIOD OF COMPLETION ONLY. YOU ARE REQUESTED TO ATTEND THIS OFFICE TO SIGN THE AGREEMENT ON NON-JUDICIAL STAMP PAPER OF RS.50/- (RS.FIFTY ONLY) WITHIN FIFTEEN DAYS FROM THE DATE OF ISSUE OF ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 9 THIS LETTER. PLEASE NOTE THAT IF YOU FAIL TO ATTEND THE OFFICE OF THE UNDERSIGNED WITHIN FIFTEEN DAYS FROM THE DATE OF ISSUE OF THIS LETTER, THE ACCEPTANCE OF THE TENDER IS LIABLE TO BE WITHDRAWN AND THE EARNEST MONEY FORFEITED. YOU ARE ALSO REQUESTED TO CONTACT ASSTT. ENGINEER-II OF THIS DIVISION AND START THE WORK AT ONCE. PLEASE NOTE THAT THE TIME ALLOWED FOR CARRYING OUT THE WORK AS ENTERED IN THE TENDER SHALL BE RECKONED FROM THE 15 TH DAY AFTER THE DATE OF ISSUE OF THIS LETTER TO COMMENCE THE WORK. THE TIME ALLOWED FOR THE EXECUTION OF THE WORK SHALL BE 30 (THIRTY) MONTHS ONLY. YOUR NEGOTIATION LETTER NO.UIL/BAKKARWALA/D02 DT. 18/02/2002 ALONG WITH LETTER NO. F.54(163)/SWD- 9/DWK/DDA/A/2001-02/2804 DT.06/11/01 AND EVEN NO.S2907 DT. 22/11/01, SHALL ALSO FORM PART OF THE AGREEMENT. 3.3 IF THE AFORESAID CONDITIONS ARE ANALYSED CERTA IN UNDISPUTED FACTS ARE OOZING OUT WHICH ARE SUMMARIZE D AS UNDER :- A) THE FLATS WHICH ARE TO BE CONSTRUCTED SHALL BE HAVI NG PLINTH AREA OF 42 SQ.MTR. B) THE WORK IS TO BE EXECUTED ON TURN-KEY BASIS INCLUDING PLANNING, DESIGNING, SOIL TESTING, EARTH- ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 10 FILLING ETC. AND COMPLETE DEVELOPMENT OF THE PROJEC T INCLUDING SERVICES LIKE SEWERAGE, DRAINAGE, WATER SUPPLY, ROADS, ELECTRIFICATION, RAINWATER HARVESTIN G, LAYING OF HT CABLES AND OTHER FACILITIES WHICH ARE REQUIRED AND STIPULATED IN THE AFORESAID TERMS AND CONDITIONS. C) AS PER CONDITION NO.(V) BEFORE STARTING THE WORK THE LAYOUT PLANS, BUILDING PLANS, STRUCTURAL DESIGNS ET C. WERE TO BE GOT APPROVED FROM THE COMPETENT AUTHORITY AS MENTIONED IN THE NIT ADHERING TO THE TIME SCHEDULE SO LAID DOWN ALONGWITH FIRE FIGHTING SYSTEM. D) THE CONDITIONS STATED HEREIN ABOVE CLEARLY LEADS TO THE CONCLUSION THAT THE ASSESSEE HAS MERELY NOT CONSTRUCTED THE FLATS RATHER DEVELOPED THE INFRASTRUCTURE RIGHT FROM FILLING THE EARTH AND SOI L- TESTING ETC., THEREFORE, THE ASSESSEE CANNOT BE SAI D TO BE A CONTRACTOR SIMPLICITOR. E) AS PER THE CONDITIONS AFTER COMPLETE DEVELOPMENT OF THE PROJECT MEANING THEREBY THE UNITS AND OTHER FACILITIES INCLUDES WATCH AND WARD FOR 3 YEARS FROM THE DATE OF COMPLETION OF THE PROJECT, AND THE ASSESSEE SHALL BE RESPONSIBLE FOR EXECUTION OF ALL ITEMS REQUIRED FOR COMPLETING THE PROJECT IN ALL RESPECT ALONG WITH ALL SERVICES WITHOUT ANY ADDITIONAL COST. AND NOT ONLY THIS ALL THE SERVICES WAS TO BE HANDED OVER TO THE LOCAL BODIES AFTER ITS COMPLETION AS PER APPROVED PLANS. ALL THESE TERMS & ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 11 CONDITIONS ARE CLEARLY INDICATIVE OF THE FACT THAT THE ASSESSEE IS NOT A CONTRACTOR RATHER A DEVELOPER BECAUSE IT IS NOT THE CASE THAT PART OF THE WORK WA S COMPLETED BY DIFFERENT PERSONS RATHER, IT WAS COMPLETED/DEVELOPED IN ALL RESPECTS BY THE ASSESSEE ITSELF. 3.4. NOW WE ARE EXPECTED TO ANALYZE THE AFOREMENTI ONED PROVISIONS OF THE ACT. SUB-SECTION (10) TO SEC. 80I B OF THE ACT SPEAKS ABOUT AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE A SPECIFIED DATE B Y THE LOCAL AUTHORITY AND, IF THE CONDITIONS ARE FULFILLED, THE N THE PROFIT DERIVED THEREFROM SHALL BE 100% OF THE PROFITS, DER IVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR. IN THESE APPEALS, WE NOTE THAT THE PROJECT WAS DULY APPROVED BY THE COMPETENT AUTHORITY, THEREFORE, CONDITION NO.(I) IS FULFILLED, LIKEWISE THE CONDITION CONTAINED IN (II) IS ALSO FU LFILLED AND SIMILAR IS THE POSITION WITH RESPECT TO CONDITION A S CONTAINED IN (III). SO FAR AS, CONDITION CONTAINED IN SUB CLA USE (B) IS CONCERNED THE SIZE OF THE PLOT IS ALSO WITHIN THE P RESCRIBED LIMIT OF MORE THAN ONE ACRES AND THE DEVELOPMENT OF THE PROJECT WAS CARRIED OUT IN ACCORDANCE WITH THE SCHE ME FRAMED BY THE GOVERNMENT. SO FAR AS BUILT UP AREA CONDITI ON IS CONCERNED THIS IS ALSO WITHIN THE SPECIFIED LIMIT, MEANING THEREBY ALL THE CONDITIONS AS STIPULATED IN THIS SE CTION ARE COMPLIED WITH BY THE ASSESSEE. THE POSITION HAS BEE N FURTHER EXPLAINED BY THE EXPLANATION INSERTED BY THE FIN.(N O.2)ACT, OF 2009 WITH RETROSPECTIVE EFFECT FROM 01.04.2001 AND FURTHER AMENDMENTS MADE FROM TIME TO TIME. AS PER THE EXPLA NATION NOTHING CONTAINED IN THE SUB-SECTION SHALL APPLY TO ANY ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 12 UNDERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORK CONTRACT AWARDED BY ANY PERSON (INCLUDING CENTRAL O R STATE GOVERNMENT). THE TOTALITY OF FACTS ARE CLEARLY INDI CATIVE TO THE CONCLUSION, AS DISCUSSED EARLIER ALSO, THAT THE ASS ESSEE IS NOT A WORK CONTRACTOR, RATHER, IT DEVELOPED THE PROJECT IN EVERY RESPECT RIGHT FROM SOIL-TESTING, EARTH FILLING, DES IGNING, PLANNING, SEWERAGE, DRAINAGE, AND TILL THE FINAL CO MPLETION OF THE PROJECT. IT IS WORTH QUOTING THAT AS PER CONDIT ION NO. (III) THE FLATS WERE TO BE MAINTAINED TILL THEY ARE HANDE D OVER TO THE ENGINEER IN CHARGE. 3.5 WE ALSO NOTE THAT BROADLY WHILE DISALLOWING T HE CLAIM OF THE ASSESSEE THE LD. AO, AND ALSO THE LD. DR BEFORE US, HEAVILY RELIED UPON THE DECISION OF THE TRIBUNAL IN THE CAS E OF B.T. PATIL & SONS, BELGAUM CONSTRUCTIONS PVT. LIMITED (SUPRA), WHEREBY THE ASSESSEE WAS TREATED AS WORKS CONTRACTO R. HOWEVER, SUBSEQUENTLY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRIES LTD. (189 TAXMANN 54) (BOM.) DECIDED THE SIMILAR CASE IN FAVOUR OF THE ASSESSEE TREATING HIM TO BE A DEVELOPER. THE EXPRESSION DEV ELOPMENT HAS NOT BEEN ARTIFICIALLY DEFINED FOR THE PURPOSES OF SEC.80IA/80IB OF THE ACT, THEREFORE, IT SHOULD RECE IVE ITS ORDINARY AND NATURAL MEANING. THE PARLIAMENT IN ITS WISDOM AMENDED THE PROVISIONS OF SEC.80IA/80IB OF THE ACT SO AS TO CLARIFY THAT IN ORDER TO AVAIL A DEDUCTION THE ASSE SSEE SHOULD (I) DEVELOP OR (II) OPERATE AND MAINTAIN OR (III) D EVELOP, OPERATE AND MAINTAIN THE FACILITY. PARLIAMENT EVENTUALLY ST EPPED INTO TO CLARIFY THAT IT WAS NOT INVARIABLY NECESSARY FOR A DEVELOPER TO OPERATE AND MAINTAIN THE FACILITY. EVEN THE HON'BLE APEX COURT IN BAJAJ TEMPO VS. CIT (196 ITR 188) EMPHASIZED THAT A ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 13 PROVISION IN A TAXING STATUTE GRANTING INCENTIVE FO R PROMOTING GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALL Y. AFTER SEC.80IA WAS AMENDED BY THE FIN. ACT OF 2001 THE SE CTION APPLIES TO AN ENTERPRISE CARRYING ON THE BUSINESS O F (A) DEVELOPING OR (B) OPERATING AND MAINTAINING OR (C) DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILI TY SUBJECT TO FULFILLMENT OF CERTAIN CONDITIONS. THUS, THE PRO VISION HAS TO BE CONSTRUED HARMONIOUSLY. WHILE COMING TO A PARTIC ULAR CONCLUSION THE HON'BLE APEX COURT CONSIDERED THE DECISION IN ALLIED MOTORS PVT. LTD. VS. CIT (224 ITR 677)(SC)(PARA-23), CIT VS. ALOM EXTRUSIONS LTD. (319 ITR 306)(SC)(PARA-23) . IT IS NOTEWORTHY THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. PRATIBHA CONSTRUCTIONS & ENGINEERS (I) P. LTD. (SUPRA), ON IDENTICAL FACT DELIBERATED UPON THE ISSUE AND DECID ED IN FAVOUR OF THE ASSESSEE. IT IS WORTH MENTIONING THAT HON'BL E JURISDICTIONAL HIGH COURT IN THE CASE OF ABG HEAVY ENGINEERING LTD. (SUPRA), DECIDED THE ISSUE. THE RE LEVANT PORTION IS WORTHY OF NOTICE. 22 THE SUBMISSION WHICH WAS URGED ON BEHALF OF THE REVENUE IS THAT UNDER CLAUSE (III) OF SUBSECTION (4) OF SECTION 801A, ONE OF THE CONDITIONS IMPOSED WAS THAT THE ENTERPRISE MUST START OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR AFTER 1 ST APRIL, 1995. THE SAME REQUIREMENT IS EMBODIED IN SUB- CLAUSE (1) OF SUB-CLAUSE (4) OF THE AMENDED PROVISIONS. IT WAS URGED THAT SINCE THE ASSESSEE WAS NOT OPERATING AND MAINTAINING ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 14 THE FACILITY, HE DID NOT FULFILL THE CONDITION. THE SUBMISSION IS FALLACIOUS BOTH IN FACT AND IN LAW THAT THE ASSESSEE WAS MAINTAINING THE FACILITY IS NOT IN DISPUTE. THE FACILITY WAS COMMENCED AFTER 1 ST APRIL, 1995. THEREFORE, THE REQUIREMENT WAS MET IN FACT. MOREOVER, AS A MATTER OF LAW, WHAT THE CONDITION ESSENTIALLY MEANS IS THAT THE INFRASTRUCTURE FACILITY SHOULD HAVE BEEN OPERATIONAL AFTER 1 ST APRIL, 1995. AFTER SECTION 80-IA WAS AMENDED BY THE FINANCE ACT. 200, THE SECTION APPLIES TO AN ENTERPRISE CARRYING ON THE BUSINESS OF (1) DEVELOPING: OR (II) OPERATING AND MAINTAINING; OR (III) DEVELOPING, OPERAT ING AND MAINTAINING ANY INFRASTRUCTURE FACILITY WHICH FULFILLS CERTAIN CONDITIONS. THOSE CONDITIONS ARE (1) OWNERSHIP OF THE ENTERPRISES BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUMS: (II) AN AGREEMENT WITH THE CENTRAL OR STATE GOVERNMENT, LOCAL AUTHORITY OR STATUTORY BODY: AND (III) THE START OF OPERATION AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY SHOULD COMMENCE AFTER 1 ST APRIL, 1995. THE REQUIREMENT THAT OPERATION AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY SHOULD COMMENCE AFTER 1 ST APRIL, 1995 HAS TO BE HARMONIOUSLY CONSTRUED WITH THE MAIN PROVISION UNDER WHICH DEDUCTION IS AVAILABLE TO AN ASSESSEE WHO DEVELOPS OR OPERATES AND MAINTAINS, OR ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 15 DEVELOPS, OPERATES AND MAINTAINS AN INFRASTRUCTURE FACILITY. A HARMONIOUS READING OF THE PROVISIONS IN ITS ENTIRETY WOULD LEAD TO THE CONCLUSION THAT THE DEDUCTION IS AVAILABLE TO AN ENTERPRISE WHICH (I) DEVELOPS: OR OPERATES AND MAINTAINS: OR (III) DEVELOPS, MAINTAINS AND OPERATES THAT INFRASTRUCTURE FACILITY. HOWEVER, THE COMMENCEMENT OF THE OPERATION AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY SHOULD BE AFTER 1 ST APRIL, 1995. IN THE PRESENT CASE THE ASSESSEE CLEARLY FULFILLED THIS CONDITION. BEFORE THE AMENDMENT THAT WAS BROUGHT ABOUT BY PARLIAMENT BY FINANCE ACT, 2001 WE HAVE ALREADY NOTED THAT THE CONSISTENT LINE OF CIRCULAR OF THE BOARD POSTULATED THE SAME POSITION THE AMENDMENT MADE BY PARLIAMENT TO S. 80IA(4) OF THE ACT, SET THE MATTER BEYOND ANY CONTROVERSY BY STIPULATING THAT THE THREE CONDITIONS FOR DEVELOPMENT, OPERATION AND MAINTENANCE WERE NOT INTENDED TO BE CUMULATIVE IN NATURE. (UNDERLINED FOR EMPHASIS BY US). 3.6. SO FAR AS, THE CONTENTION OF THE REVENUE THAT THE ASSESSEE IS NOT THE OWNER OF THE PROJECT. WE NOTE THAT THE SECTION NOWHERE PUT A CONDITION THAT FOR CLAIMING D EDUCTION UNDER THESE SECTIONS NECESSARILY THE ASSESSEE HAS T O BE THE ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 16 OWNER OF THE PROJECT. THIS IS NOT THE INTENTION OF THE LEGISLATURE OTHERWISE NOTHING PREVENTED IT TO INCLU DE SUCH CLAUSE AT THE TIME OF LEGISLATING/INACTING THE PROV ISION. IF THE CONTENTION OF THE LD. DR IS ACCEPTED THEN WHOLE PUR POSE OF INACTING SUCH PROVISION AND CONSEQUENT DEVELOPMENT OF INFRASTRUCTURE WILL BE DEFEATED. 3.7. IDENTICALLY, IN THE CASE OF MAHALAXMI CONSTRUCTIONS (ITA NO.433/PN/2007 ORDER DT 6/2/12 THE DECISION IN THE CASE OF B.T. PATIL AND SONS, BELGAUM CONSTRUCTIONS (P) LTD. (SUPRA) , ALONG WITH AFORESAID DECISION FROM HON'BLE BOMBAY HIGH COURT WAS DISCUSSED AND HELD THAT THE ASSESSEE IS ELIGIBL E FOR CLAIM OF DEDUCTION U/S. 80IA(4) OF THE ACT. IN VIEW OF TH E CLEAR FACTS AVAILABLE ON RECORD AND THE JUDICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE CLEARLY INDICATES THAT THE AS SESSEE IS ENTITLED FOR CLAIMED DEDUCTIONS. THEREFORE, ALL TH E APPEALS ARE DISPOSED OFF AS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSI ON OF THE HEARING ON 10 TH DAY OF OCTOBER, 2014 . - & *+, . / 10.10.2014 + & 5 SD/- (SANJAY ARORA) SD/- (JOGINDER SINGH) /ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; . DATED : 10 TH OCT. 2014. JV, SR.PS/SHEKAR.PS - & $(6 76,( - & $(6 76,( - & $(6 76,( - & $(6 76,(/ COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. ITA NO.3466,67,68,69 & 70/MUM/2011 UNITY INFRAPROJECTS LTD. 17 3. 8 ( ) / THE CIT, MUMBAI. 4. 8 / CIT(A)-13, MUMBAI 5. 6;5 $( , , / DR, ITAT, MUMBAI 6. 5<= > / GUARD FILE. - - - - / BY ORDER, %6( $( //TRUE COPY// ? ?? ?/ // /@ A @ A @ A @ A (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI