M/s Biora Infrastructure Pvt. Ltd., Indore V. The ACIT, Indore

ITA 373/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2776 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-07-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: C P RAWKA
• Keywords: Depreciation; Retrospective amendment
• Section: 6; 63; 10

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER ITA NO.373/IND/2009 A.Y. 2006-07 BIORA INFRASTRUCTURE PVT. LTD., 206, MORYA CENTRE, 16, RACE COURSE ROAD, INDORE PAN AABCB 7682 F APPELLANT VS ACIT- 5(1), INDORE RESPONDENT APPELLANT BY : SHRI C.P. RAWKA, FCA RESPONDENT BY : SHRI P.K. MITRA, SR. DR O R D E R PER JOGINDER SINGH THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-II, INDORE, DATED 19.5.2009 ON THE FOLLOWING GROUND: 1 . THAT THE LD. CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMED THE DISALLOWANCE MADE BY ASSESSING OFFICER ON ACCOUNT OF DEDUCTION CLAIMED U /S 80IA OF RS.10,29,342/- WITHOUT CONSIDERING THE FULL FACTS AND REASONING. THE DISALLOWANCE MADE AND CONFIRMED BY LD. CIT(A) THEREFORE IS TOTALLY WRONG AND ILLEGAL ON THE FACTS OF THE CASE. 2 2. DURING THE HEARING OF THIS APPEAL, THE LD. SR. D R SHRI P.K. MITRA POINTED OUT THAT THE IMPUGNED ISSUE IS COVERED AGAI NST THE ASSESSEE BY THE ORDER OF THIS VERY BENCH DATED 7 TH MAY, 2010 IN THE CASE OF SCC PROJECTS PRIVATE LTD (ITA NO.127/IND/2009). THIS FA CTUAL MATRIX WAS NOT CONTROVERTED BY THE LD. COUNSEL FOR THE ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. IN VIEW OF THE AFORESAID FACTS AND ASSERTION OF THE LD. RESPECTIVE COUNSEL, THE RELEVANT PORTION OF THE AFORESAID ORDER IS REPRODUCED HEREUN DER: - THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, INDORE, DATED 12.1.2009 ON THE GROUND THAT LD. FIRST APPELLATE AUTHORITY ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE MADE U/S 80IA AT RS.60,60,548/- WITHOUT CONSIDERING THE FULL FACTS AND THE LEGAL POSITION. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHRI C.P.RAWKA, LD. COUNSEL FOR THE ASSESSEE AND SHRI K.K. SINGH, LEARNED CIT DR. AT THE OUTSET, THE LEARNED CIT DR CONTENDED THAT IN VIEW OF THE AMENDMENT MADE IN THE STATUTE, THE ISSUE IS TO BE DECIDED AGAINST THE ASSESSEE, THEREFORE, THERE IS NO INFIRMITY IN THE STAND OF THE LEARNED CIT(A). ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE DID NOT CONTROVERT THE ASSERTION OF THE LEARNED CIT DR. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE ACTIVITY OF CONSTRUCTION AT VARIOUS SITES IN MADHYA PRADESH, DECLARED NIL INCOME IN ITS RETURN FILED ON 13.10.2005 WHICH WAS PROCESSED U/S 143(1) ON 15.6.2006 AND A 3 REFUND OF RS.21,12,117/- WAS ISSUED ON 28.8.2006. THE CASE WAS SELECTED FOR SCRUTINY, THEREFORE, STATUTORY NOTICE U/S 143(2) WAS SERVED UPON THE ASSESSEE TO WHICH THE ASSESSEE MADE COMPLIANCE AND ALSO FILED WRITTEN SUBMISSIONS. THE ASSESSEE CLAIMED RELIEF OF RS. 65,24,994/- U/S 80IA OF THE ACT. THE ASSESSMENT WAS COMPLETED ON A TOTAL INCOME OF RS.87,74,994/-. THE ASSESSMENT ORDER WAS CARRIED IN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHO ALLOWED THE RELIEF ON DISALLOWANCE OF EXPENSES BUT REJECTED THE CLAIM OF THE ASSESSEE ON THE ISSUE OF CLAIMED RELIEF U/S 80IA. THE RELEVANT FINDING AS DETAILED IN PARA 2.1.2 OF THE IMPUGNED ORDER ARE REPRODUCED HEREUNDER :- 2.1.2 I HAVE EXAMINED THE ENTIRE ISSUE. THE DEDUCTION U/S 80IA IS NO LONGER MEANT FOR CONTRACTORS BE IT THE WORK FOR UPGRADATION OR NEW CONSTRUCTION WORK. THE PROVISION IS TO PROVIDE INCENTIVES WHO ARE DEVELOPING, MAINTAINING AND OPERATING NEW INFRASTRUCTURAL FACILITIES (INCLUDING ROADS) SUCH AS THE WORK TAKEN BY ANY ENTERPRISE UNDER BOT (BUILT, OPERATE & TRANSFER) SCHEME. IN THAT CASE, THE FUND IS NOT PROVIDED BY THE GOVERNMENT OR ITS AGENCIES. RATHER, THE REQUIRED FUNDS ARE MET BY THE ENTERPRISE ITSELF AND IN THAT SITUATION THE ENTERPRISE IS AUTHORISED TO CHARGE TOLL TAX WHILE MAINTAINING AND OPERATING SUCH ROADS UPTO CERTAIN PERIOD (AS PER THE AGREEMENT WITH THE GOVERNMENT) TO RECOVER ITS COST. THE INCOME EARNED THEREAT IS SUBJECT TO DEDUCTION U/S 80IA FOR SPECIFIED NUMBER OF YEARS. THE OWNERSHIP OVER SUCH PROJECTS ARE THEREAFTER TRANSFERRED TO THE GOVERNMENT AFTER THE SAID PERIOD. IN ORDER TO MAKE THIS POINT CLEAR, IT IS ESSENTIAL TO REPRODUCE THE PROVISIONS OF SECTION 80- IA. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER SECTION 80-IA(4) OF THE ACT :- 4 80-IA. 33 [(1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRISE FROM ANY BUSINESS REFERRED TO IN SUB-SECTION (4) (SUCH BUSINESS BEING HEREINAFTER 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 CONSECUTIVE ASSESSMENT YEARS.] XXX XXX XXX (4)] WHICH FULFILS ALL THE FOLLOWING CONDITIONS, NAMELY : (I) IT IS NOT FORMED BY SPLITTING UP, OR THE RECONSTRUCTION, OF A BUSINESS ALREADY IN EXISTENCE : PROVIDED THAT THIS CONDITION SHALL NOT APPLY IN RESPECT OF AN 44 [UNDERTAKING] WHICH IS FORMED AS A RESULT OF THE RE-ESTABLISHMENT, RECONSTRUCTION OR REVIVAL BY THE ASSESSEE OF THE BUSINESS OF ANY SUCH 44 [UNDERTAKING] AS IS REFERRED TO IN SECTION 33B , IN THE CIRCUMSTANCES AND WITHIN THE PERIOD SPECIFIED IN THAT SECTION; (II) IT IS NOT FORMED BY THE TRANSFER TO A NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE: 45 [ PROVIDED THAT NOTHING CONTAINED IN THIS SUB- SECTION SHALL APPLY IN THE CASE OF TRANSFER, EITHER IN WHOLE OR IN PART, OF MACHINERY OR PLANT PREVIOUSLY USED BY A STATE ELECTRICITY BOARD REFERRED TO IN CLAUSE (7) OF SECTION 2 OF THE ELECTRICITY ACT, 2003 (36 OF 2003), WHETHER OR NOT SUCH TRANSFER IS IN PURSUANCE OF THE SPLITTING UP OR RECONSTRUCTION OR REORGANISATION OF THE BOARD UNDER PART XIII OF THAT ACT.] EXPLANATION 1.FOR THE PURPOSES OF CLAUSE (II), ANY MACHINERY OR PLANT WHICH WAS USED OUTSIDE INDIA BY ANY PERSON OTHER THAN THE ASSESSEE SHALL NOT BE REGARDED AS MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE, IF THE FOLLOWING CONDITIONS ARE FULFILLED, NAMELY : 5 (A) SUCH MACHINERY OR PLANT WAS NOT, AT ANY TIME PREVIOUS TO THE DATE OF THE INSTALLATION BY TH E ASSESSEE, USED IN INDIA; (B) SUCH MACHINERY OR PLANT IS IMPORTED INTO INDIA FROM ANY COUNTRY OUTSIDE INDIA; AND (C) NO DEDUCTION ON ACCOUNT OF DEPRECIATION IN RESPECT OF SUCH MACHINERY OR PLANT HAS BEEN ALLOWED OR IS ALLOWABLE UNDER THE PROVISIONS OF THI S ACT IN COMPUTING THE TOTAL INCOME OF ANY PERSON FOR ANY PERIOD PRIOR TO THE DATE OF THE INSTALLATION OF MACHINERY OR PLANT BY THE ASSESSEE. EXPLANATION 2.WHERE IN THE CASE OF AN 46 [UNDERTAKING], ANY MACHINERY OR PLANT OR ANY PART THEREOF PREVIOUSLY USED FOR ANY PURPOSE IS TRANSFERRED TO A NEW BUSINESS AND THE TOTAL VALUE O F THE MACHINERY OR PLANT OR PART SO TRANSFERRED DOES NOT EXCEED TWENTY PER CENT OF THE TOTAL VALUE OF TH E MACHINERY OR PLANT USED IN THE BUSINESS, THEN, FOR THE PURPOSES OF CLAUSE (II) OF THIS SUB-SECTION, TH E CONDITION SPECIFIED THEREIN SHALL BE DEEMED TO HAVE BEEN COMPLIED WITH. (4) THIS SECTION APPLIES TO (I) ANY ENTERPRISE CARRYING ON THE BUSINESS 47 [OF (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING] ANY INFRASTRUCTURE FACILITY WHICH FULF ILS ALL THE FOLLOWING CONDITIONS, NAMELY : (A) IT IS OWNED BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF SUCH COMPANIES 48 [OR BY AN AUTHORITY OR A BOARD OR A CORPORA-TION OR ANY OTHER BODY ESTABLISHED OR CONSTITUTED UNDER ANY CENTRAL OR STATE ACT;] 49 [(B) IT HAS ENTERED INTO AN AGREEMENT WITH THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (II I) DEVELOPING, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY;] (C) IT HAS STARTED OR STARTS OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR AFTER THE 1ST DAY OF APRIL, 1995: PROVIDED THAT WHERE AN INFRASTRUCTURE FACILITY IS TRANSFERRED ON OR AFTER THE 1ST DAY OF APRIL, 1999 BY AN ENTERPRISE WHICH DEVELOPED SUCH INFRASTRUCTURE FACILITY (HEREAFTER REFERRED TO IN THIS SECTION AS THE 6 TRANSFEROR ENTERPRISE) TO ANOTHER ENTERPRISE (HEREAFTER IN THIS SECTION REFERRED TO AS THE TRANSFEREE ENTERPRISE) FOR THE PURPOSE OF OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON ITS BEHALF IN ACCORDANCE WITH THE AGREEMENT WITH THE CENTRAL GOVERNMENT, STATE GOVERNMENT, LOCAL AUTHORITY OR STATUTORY 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 GAINS WOULD BE AVAILABLE TO SUCH TRANSFEREE ENTERPRISE FOR THE UNEXPIRED PERIOD DURING WHICH THE TRANSFEROR ENTERPRISE WOULD HAVE BEEN ENTITLED TO THE DEDUCTION, IF THE TRANSFER HAD NOT TAKEN PLACE. 50 [EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, INFRASTRUCTURE FACILITY MEANS (A) A ROAD INCLUDING TOLL ROAD, A BRIDGE OR A RAIL SYSTEM; (B) A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER ACTIVITIES BEING AN INTEGRAL PART OF THE HIGHWAY PROJECT; (C) A WATER SUPPLY PROJECT, WATER TREATMENT SYSTEM, IRRIGATION PROJECT, SANITATION AND SEWERAGE SYSTEM OR SOLID WASTE MANAGEMENT SYSTEM; (D) A PORT 51 , AIRPORT, INLAND WATERWAY 52 [, INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA];] 53 [(II) ANY UNDERTAKING WHICH HAS STARTED OR STARTS PROVIDING TELECOMMUNICATION SERVICES, WHETHER BASIC OR CELLULAR, INCLUDING RADIO PAGING, DOMESTIC SATELLITE SERVICE, NETWORK OF TRUNKING, BROADBAND NETWORK AND INTERNET SERVICES ON OR AFTER THE 1ST DAY OF APRIL, 1995, BUT ON OR BEFORE THE 31 ST DAY OF MARCH, 54 [2005].] EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, DOMESTIC SATELLITE MEANS A SATELLITE OWNE D AND OPERATED BY AN INDIAN COMPANY FOR PROVIDING TELECOMMUNICATION SERVICE; (III) ANY UNDERTAKING WHICH DEVELOPS, DEVELOPS AND OPERATES OR MAINTAINS AND OPERATES AN INDUSTRIAL PARK 55 [OR SPECIAL ECONOMIC ZONE] NOTIFIED 56 BY THE CENTRAL GOVERNMENT IN ACCORDANCE WITH THE SCHEME FRAMED 56 AND NOTIFIED 57 BY THAT GOVERNMENT FOR THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1997 AND ENDING ON THE 31ST DAY OF MARCH, 58 [2006] : 7 59 [ PROVIDED THAT IN A CASE WHERE AN UNDERTAKING DEVELOPS AN INDUSTRIAL PARK ON OR AFTER THE 1ST DAY OF APRIL, 1999 OR A SPECIAL ECONOMIC ZONE ON OR AFTER THE 1ST DAY OF APRIL, 2001 AND TRANSFERS THE OPERATION AND MAINTENANCE OF SUCH INDUSTRIAL PARK OR SUCH SPECIAL ECONOMIC ZONE, AS THE CASE MAY BE, TO ANOTHER UNDERTAKING (HEREAFTER IN THIS SECTION REFERRED TO AS THE TRANSFEREE UNDERTAKING), THE DEDUCTION UNDER SUB-SECTION (1) SHALL BE ALLOWED TO SUCH TRANSFEREE UNDERTAKING FOR THE REMAINING PERIOD IN THE TEN CONSECUTIVE ASSESSMENT YEARS AS IF THE OPERATION AND MAINTENANCE WERE NOT SO TRANSFERRED TO THE TRANSFEREE UNDERTAKING : 60 [ PROVIDED FURTHER THAT IN THE CASE OF ANY UNDERTAKING WHICH DEVE-LOPS, DEVELOPS AND OPERATES OR MAINTAINS AND OPERATES AN INDUSTRIAL PARK, THE PROVISIONS OF THIS CLAUSE SHALL HAVE EFFECT AS IF F OR THE FIGURES, LETTERS AND WORDS 31ST DAY OF MARCH, 2006, THE FIGURES, LETTERS AND WORDS 31ST DAY OF MARCH, 60A [ 2011 ] HAD BEEN SUBSTITUTED;] (IV) AN 61 [UNDERTAKING] WHICH, (A) IS SET UP IN ANY PART OF INDIA FOR THE GENERATION OR GENERATION AND DISTRIBUTION OF POWER IF IT BEGINS TO GENERATE POWER AT ANY TIME DURING T HE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1993 AND ENDING ON THE 31ST DAY OF MARCH, 62 [ 2011 ] ; (B) STARTS TRANSMISSION OR DISTRIBUTION BY LAYING A NETWORK OF NEW TRANSMISSION OR DISTRIBUTION LINES AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1999 AND ENDING ON THE 31ST DAY OF MARCH, 62 [ 2011 ] : PROVIDED THAT THE DEDUCTION UNDER THIS SECTION TO AN 63 [UNDERTAKING] UNDER SUB-CLAUSE (B) SHALL BE ALLOWED ONLY IN RELATION TO THE PROFITS DERIVED FROM LAYING OF SUCH NETWORK OF NEW LINES FO R TRANSMISSION OR DISTRIBUTION; 64 [(C) UNDERTAKES SUBSTANTIAL RENOVATION AND MODERNISATION OF THE EXISTING NETWORK OF TRANSMISSION OR DISTRIBUTION LINES AT ANY TIME DURI NG THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 2004 AND ENDING ON THE 31ST DAY OF MARCH, 65 [ 2011 ] . EXPLANATION.FOR THE PURPOSES OF THIS SUB-CLAUSE, SUBSTANTIAL RENOVATION AND MODERNISATION MEANS AN INCREASE IN THE PLANT AND MACHINERY IN THE NETWORK OF TRANSMISSION OR DISTRIBUTION LINES BY AT LEAST FIFTY PER CENT OF TH E 8 BOOK VALUE OF SUCH PLANT AND MACHINERY AS ON THE 1ST DAY OF APRIL, 2004;] 66 [(V) AN UNDERTAKING OWNED BY AN INDIAN COMPANY AND SET UP FOR RECONSTRUCTION OR REVIVAL OF A POWER GENERATING PLANT, IF (A) SUCH INDIAN COMPANY IS FORMED BEFORE THE 30TH DAY OF NOVEMBER, 2005 WITH MAJORITY EQUITY PARTICIPATION BY PUBLIC SECTOR COMPANIES FOR THE PURPOSES OF ENFORCING THE SECURITY INTEREST OF THE LENDERS TO THE COMPANY OWNING THE POWER GENERATING PLANT AND SUCH INDIAN COMPANY IS NOTIFIED 67 BEFORE THE 31ST DAY OF DECEMBER, 2005 BY THE CENTRAL GOVERNMENT FOR THE PURPOSES OF THIS CLAUSE; (B) SUCH UNDERTAKING BEGINS TO GENERATE OR TRANSMIT OR DISTRIBUTE POWER BEFORE THE 31ST DAY OF MARCH, 68 [ 2011 ] ;] 69 [ 69A [ (VI) ANY UNDERTAKING CARRYING ON THE BUSINESS OF LAYING AND OPERATING A CROSS-COUNTRY NATURAL GAS DISTRIBUTION NETWORK, INCLUDING PIPELINES AND STORAGE FACILITIES BEING AN INTEGRAL PART OF SUCH NETWORK, WHICH FULFILS 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 ESTABLISHED OR CONSTITUTED UNDER ANY CENTRAL OR STATE ACT; (B) IT HAS BEEN APPROVED BY THE PETROLEUM AND NATURAL GAS REGULATORY BOARD ESTABLISHED UNDER SUB-SECTION (1) OF SECTION 3 OF THE PETROLEUM AND NATURAL GAS REGULATORY BOARD ACT, 2006 (19 OF 2006) AND NOTIFIED BY THE CENTRAL GOVERNMENT IN THE OFFICIAL GAZETTE; (C) ONE-THIRD OF ITS TOTAL PIPELINE CAPACITY IS AVAILABLE FOR USE ON COMMON CARRIER BASIS BY ANY PERSON OTHER THAN THE ASSESSEE OR AN ASSOCIATED PERSON; (D) IT HAS STARTED OR STARTS OPERATING ON OR AFTER THE 1ST DAY OF APRIL, 2007; AND (E) ANY OTHER CONDITION WHICH MAY BE PRESCRIBED. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, AN ASSOCIATED PERSON IN RELATION TO THE ASSESSEE MEANS A PERSON 9 (I) WHO PARTICIPATES DIRECTLY OR INDIRECTLY OR THROUGH ONE OR MORE INTERMEDIARIES IN THE MANAGEMENT OR CONTROL OR CAPITAL OF THE ASSESSEE; (II) WHO HOLDS, DIRECTLY OR INDIRECTLY, SHARES CARRYING NOT LESS THAN TWENTY-SIX PER CENT OF THE VOTING POWER IN THE ASSESSEE; (III) WHO APPOINTS MORE THAN HALF OF THE BOARD OF DIRECTORS OR MEMBERS OF THE GOVERNING BOARD, OR ONE OR MORE EXECUTIVE DIRECTORS OR EXECUTIVE MEMBERS OF THE GOVERNING BOARD OF THE ASSESSEE; OR (IV) WHO GUARANTEES NOT LESS THAN TEN PER CENT OF THE TOTAL BORROWINGS OF THE ASSESSEE. ] ] EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION TO A BUSINESS REFERRED TO IN SUB-SECTION (4) WHICH IS IN THE NATURE OF A WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT) AND EXECUTED BY THE UNDERTAKING OR ENTERPRISE REFERRED TO IN SUB-SECTION (1).] IF THE AFORESAID PROVISION OF LAW IS ANALYSED, IT CAN BE SAID THAT THE AFORESAID EXPLANATION (BOLD PORTION) WAS SUBSTITUTED BY THE FINANCE ACT (NO. 2) ACT, 2009 WITH RETROSPECTIVE EFFECT FROM 1.4.2000 AND PRIOR TO ITS SUBSTITUTION, EXPLANATION AS INSERTED BY THE FINANCE ACT, 2007 WITH RETROSPECTIVE EFFECT FROM 1.4.2000 WAS AS UNDER :- EXPLANATION FOR THE REMOVAL OF DOUBTS IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY TO A PERSON WHO EXECUTES A WORKS CONTRACT ENTERED INTO WITH THE UNDERTAKING OR ENTERPRISE AS THE CASE MAY BE IN THE LIGHT OF THE AFORESAID EXPLANATION SUBSTITUTED BY FINANCE ACT 2009 WITH RETROSPECTIVE EFFECT FROM 1.4.2000, AND THE ASSESSMENT YEAR BEFORE US BEING 2005-06, SUB- 10 SECTION (4) HAS BEEN SPECIFICALLY EXPLAINED THAT IT SHALL NOT APPLY IN RELATION TO A BUSINESS REFERRED IN THAT SUB-SECTION WHICH IS IN THE NATURE OF WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT) AND EXECUTED BY THE UNDERTAKING OR ENTERPRISE REFERRED TO IN SUB-SECTION (1). IN SUB-SECTION (1) TO SECTION 80IA THE WORD ANY BUSINESS HAS BEEN MENTIONED BUT IN VIEW OF INSERTION OF EXPLANATION IN RESPECT TO SUB- SECTION (4), THERE IS NO INFIRMITY IN THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THEREFORE, THE IMPUGNED AMOUNT WAS RIGHTLY DISALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 7 TH MAY, 2010. 4. IN THE AFORESAID ORDER, THE TRIBUNAL, ON IDENTIC AL FACTS, HAS DELIBERATED UPON THE ISSUE U/S 80IA(4) OF THE ACT. IF THE EXPLANATION INSERTED BY THE FINANCE (2) ACT, 2009 WITH RETROSPE CTIVE EFFECT FROM 1.4.2000 IS ANALYSED, IT SPECIFICALLY SAYS THAT IT SHALL NOT APPLY IN RELATION TO A BUSINESS REFERRED IN SUB-SECTION WHICH IS IN T HE NATURE OF WORK CONTRACTS AWARDED BY ANY PERSON INCLUDING CENTER OR STATE GOVT. IN VIEW OF THIS FACT, WE FIND NO INFIRMITY IN THE STAND OF THE LD. CIT(A). EVEN OTHERWISE, IN VIEW OF THE AFORESAID DECISION, SINCE THE ASSESSEE CARRIED OUT THE WORK CONTRACTS ALLOTTED BY GOVT. AUTHORITY M.P. RURAL ROAD 11 DEVELOPMENT AUTHORITY FOR CONSTRUCTION OF ROAD, THE REFORE, IT WILL NOT BE ELIGIBLE FOR THE TAX BENEFIT U/S 80IA OF THE ACT. I N VIEW OF THESE FACTS, THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE, TH EREFORE, DISMISSED. FINALLY, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES OF BOTH SIDES AT THE CONCLUSION OF HEARING ON 2.7.2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2.7.2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE !VYAS!