Sushee Hi-Tech Constructions P. Ltd., (Now known as Sushee Infra P. Ltd.), Hyderabad V. ITO, Ward-3(2), Hyderabad

ITA 414/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2854 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 15-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LAXMAN
• Assessee Lawyers: S RAMA RAO
• Keywords: Retrospective amendment
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.414/HYD/2012 (ASSESSMENT YEAR 2008-09) M/S. SUSHEE HITECH CONSTRUCTIONS P. LTD. (NOW KNOWN AS SUSHEE INFRA P. LTD.), HYDERABAD (PAN AACCS 8560 Q) V/S INCOME-TAX OFFICER, WARD 3(2), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.RAMA RAO RESPONDENT BY : SHRI LAXMAN DR DATE OF HEARING 01.05.2013 DATE OF PRONOUNCEMENT 17.6.2013 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS IS AN APPEAL BY THE ASSESSEE, DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IV, HYD ERABAD DATED 29.2.2012 FOR THE ASSESSMENT YEAR 2008-09. 2. EFFECTIVE GROUNDS OF THE ASSESSEE IN THIS APPEA L READ AS FOLLOWS- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX(APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN HOLDING THAT THE APPELLANT IS NOT ENTITLED FOR DEDUCTION U/ S.80IA OF THE INCOME-TAX ACT AND FURTHER ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING SUCH DEDUCTION AMO UNTING TO RS.2,72,40,816. 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST OF RS.19,48 ,604 MADE BY THE ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 2 ASSESSING OFFICER. THE LEARNED CIT(A) OUGHT TO HAV E SEEN THAT THE INVESTMENTS WERE MADE FROM OUT OF ITS OWN FUNDS AND NOT FROM OUT OF THE LOAN FUNDS AND SOME OF THE INVESTMENTS WERE MAD E DURING THE COURSE OF ITS BUSINESS ACTIVITY. 4. THE LEARNED CIT(A) FAILED TO OBSERVE THE FACT THAT THE INVESTMENT WAS MADE IN THE INTEREST OF ITS BUSINESS ACTIVITY. 5. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN CONFIRMING THE CHARGING OF INTEREST U/S. 234B OF RS .23,68,854 AND U/S. 234C OF RS.10,34,386. 3. AS FAR AS THE FIRST EFFECTIVE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL CONCERNING DISALLOWANCE OF DEDUCTION UNDER S .80IA IS CONCERNED, CONTAINED IN GROUND NO.2 ABOVE, WE FIND THAT SIMILA R ISSUE WAS CONSIDERED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASS ESSMENT YEAR 2005- 06 TO 2007-08 IN ITA NOS.269/HYD/2009, ITA NO.1165/ HYD/2009 AND ITA NO.1171/HYD/2010 RESPECTIVELY VIDE ORDER DATED 16.3 .2012. THE TRIBUNAL BY THE SAID ORDER HAS DECIDED THE ISSUE IN THE FOLL OWING MANNER- 31. FINDINGS: WE HAVE CONSIDERED THE ELABORATE SUB MISSIONS MADE BY BOTH THE PARTIES AND ALSO PERUSED THE MATERIALS AVA ILABLE ON RECORD. WE HAVE ALSO GONE THROUGH ALL THE CASE LAWS CITED BY B OTH THE PARTIES. WE FIND THAT THE PROVISIONS OF SECTION 80IA (4) OF THE ACT WHEN INTRODUCED AFRESH BY THE FINANCE ACT, 1999, THE PROVISIONS UND ER SECTION 80IA (4A) OF THE ACT WERE DELETED FROM THE ACT. THE DEDUCTION AVAILABLE FOR ANY ENTERPRISE EARLIER UNDER SECTION 80IA (4A) ARE ALSO MADE AVAILABLE UNDER SECTION 80IA (4) ITSELF. FURTHER, THE VERY FACT THA T THE LEGISLATURE MENTIONED THE WORDS (I) 'DEVELOPING' OR (II) 'OPERA TING AND MAINTAINING' OR (III) 'DEVELOPING, OPERATING AND MA INTAINING' CLEARLY INDICATES THAT ANY ENTERPRISE WHICH CARRIED ON ANY OF THESE THREE ACTIVITIES WOULD BECOME ELIGIBLE FOR DEDUCTION. THE REFORE, THERE IS NO AMBIGUITY IN THE INCOME-TAX ACT. WE FIND THAT WHERE AN ASSESSEE INCURRED EXPENDITURE FOR PURCHASE OF MATERIALS HIMS ELF AND EXECUTES THE DEVELOPMENT WORK I.E., CARRIES OUT THE CIVIL CONSTR UCTION WORK, HE WILL BE ELIGIBLE FOR TAX BENEFIT UNDER SECTION 80 IA OF THE ACT. IN CONTRAST TO THIS, A ASSESSEE, WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON INCLUDING GOVERNMENT OR AN UNDERTAKING OR ENTERPRISE REFERRED TO IN SECTION 80 IA OF THE ACT, FOR EXECUTING WORKS CONTRACT, WILL NOT BE ELIGIBLE FOR THE TAX BENEFIT UNDER SECTION 80 IA OF THE ACT. WE FIND THA T THE WORD 'OWNED' IN SUB- CLAUSE (A) OF CLAUSE (1) OF SUB SECTION (4) OF SECTION 80IA OF THE ACT REFER TO THE ENTERPRISE. BY READING OF THE SECTION, IT IS CLEARS THAT THE ENTERPRISES CARRYING ON DEVELOPMENT OF INFRASTRUCTU RE DEVELOPMENT SHOULD BE OWNED BY THE COMPANY AND NOT THAT THE INF RASTRUCTURE FACILITY SHOULD BE OWNED BY A COMPANY. THE PROVISIONS ARE MA DE APPLICABLE TO THE PERSON TO WHOM SUCH ENTERPRISE BELONGS TO IS EX PLAINED IN SUB- ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 3 CLAUSE (A). THEREFORE, THE WORD 'OWNERSHIP' IS ATTR IBUTABLE ONLY TO THE ENTERPRISE CARRYING ON THE BUSINESS WHICH WOULD MEA N THAT ONLY COMPANIES ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (4) AND NOT ANY OTHER PERSON LIKE INDIVIDUAL, HUF, FIRM ETC. 32. WE ALSO FIND THAT ACCORDING TO SUB-CLAUSE (A), CLAUSE (I) OF SUB SECTION (4) OF SECTION 80-IA THE WORD 'IT' DENOTES THE ENTERPRISE CARRYING ON THE BUSINESS. THE WORD 'IT' CANNOT BE R ELATED TO THE INFRASTRUCTURE FACILITY, PARTICULARLY IN VIEW OF TH E FACT THAT INFRASTRUCTURE FACILITY INCLUDES RAIL SYSTEM, HIGHWAY PROJECT, WAT ER TREATMENT SYSTEM, IRRIGATION PROJECT, A PORT, AN AIRPORT OR AN INLAND PORT WHICH CANNOT BE OWNED BY ANY ONE. EVEN OTHERWISE, THE WORD 'IT' IS USED TO DENOTE AN ENTERPRISE. THEREFORE, THERE IS NO REQUIREMENT THAT THE ASSESSEE SHOULD HAVE BEEN THE OWNER OF THE INFRASTRUCTURE FACILITY. 33. THE NEXT QUESTION IS TO BE ANSWERED IS WHETHER THE ASSESSEE IS A DEVELOPER OR MERE WORKS CONTRACTOR. THE REVENUE REL IED ON THE AMENDMENTS BROUGHT IN BY THE FINANCE ACT 2007 AND 2 009 TO MENTION THAT THE ACTIVITY UNDERTAKEN BY THE ASSESSEE IS AKI N TO WORKS CONTRACT AND HE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (4) OF THE ACT. WHETHER THE ASSESSEE IS A DEVELOPER OR WORKS CONTRA CTOR IS PURELY DEPENDS ON THE NATURE OF THE WORK UNDERTAKEN BY THE ASSESSEE. EACH OF THE WORK UNDERTAKEN HAS TO BE ANALYZED AND A CONCLU SION HAS TO BE DRAWN ABOUT THE NATURE OF THE WORK UNDERTAKEN BY TH E ASSESSEE. THE AGREEMENT ENTERED INTO WITH THE GOVERNMENT OR THE G OVERNMENT BODY MAY BE A MERE WORKS CONTRACT OR FOR DEVELOPMENT OF INFRASTRUCTURE. IT IS TO BE SEEN FROM THE AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH THE GOVERNMENT. WE FIND THAT THE GOVERNMENT HANDED OVER THE POSSESSION OF THE PREMISES OF PROJECTS TO THE ASSESSEE FOR THE DEVELOPMENT OF INFRASTRUCTURE FACILITY. IT IS THE ASSESSEE'S RESPO NSIBILITY TO DO ALL ACTS TILL THE POSSESSION OF PROPERTY IS HANDED OVER TO THE GO VERNMENT. THE FIRST PHASE IS TO TAKE OVER THE EXISTING PREMISES OF THE PROJECTS AND THEREAFTER DEVELOPING THE SAME INTO INFRASTRUCTURE FACILITY. S ECONDLY, THE ASSESSEE SHALL FACILITATE THE PEOPLE TO USE THE AVAILABLE EX ISTING FACILITY EVEN WHILE THE PROCESS OF DEVELOPMENT IS IN PROGRESS. ANY LOSS TO THE PUBLIC CAUSED IN THE PROCESS WOULD BE THE RESPONSIBILITY OF THE A SSESSEE. THE ASSESSEE HAS TO DEVELOP THE INFRASTRUCTURE FACILITY. IN THE PROCESS, ALL THE WORKS ARE TO BE EXECUTED BY THE ASSESSEE. IT MAY BE LAYIN G OF A DRAINAGE SYSTEM; MAY BE CONSTRUCTION OF A PROJECT; PROVISION OF WAY FOR THE CATTLE AND BULLOCK CARTS IN THE VILLAGE; PROVISION FOR TRA FFIC WITHOUT ANY HINDRANCE, THE ASSESSEE'S DUTY IS TO DEVELOP INFRAS TRUCTURE WHETHER IT INVOLVES CONSTRUCTION OF A PARTICULAR ITEM AS AGREE D TO IN THE AGREEMENT OR NOT. THE AGREEMENT IS NOT FOR A SPECIFIC WORK, I T 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 I S TO BE BROUGHT IN BY THE ASSESSEE BY STICKING TO THE QUALITY AND QUANTIT Y IRRESPECTIVE OF THE COST OF SUCH MATERIAL. THE GOVERNMENT DOES NOT PROV IDE ANY MATERIAL TO THE ASSESSEE. IT PROVIDES THE WORKS IN PACKAGES AND NOT AS A WORKS CONTRACT. THE ASSESSEE UTILIZES ITS FUNDS, ITS EXPE RTISE, ITS EMPLOYEES AND TAKES THE RESPONSIBILITY OF DEVELOPING THE INFRASTR UCTURE FACILITY. THE LOSSES SUFFERED EITHER BY THE GOVT. OR THE PEOPLE I N THE PROCESS OF SUCH DEVELOPMENT WOULD BE THAT OF THE ASSESSEE. THE ASSE SSEE HANDS OVER THE DEVELOPED INFRASTRUCTURE FACILITY TO THE GOVERNMENT ON COMPLETION OF THE DEVELOPMENT. THEREAFTER, THE ASSESSEE HAS TO UNDERT AKE MAINTENANCE OF THE SAID INFRASTRUCTURE FOR A PERIOD OF 12 TO 24 MO NTHS. DURING THIS ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 4 PERIOD, IF ANY DAMAGES ARE OCCURRED IT SHALL BE THE RESPONSIBILITY OF THE ASSESSEE. FURTHER, DURING THIS PERIOD, THE ENTIRE I NFRASTRUCTURE SHALL HAVE TO BE MAINTAINED BY THE ASSESSEE ALONE WITHOUT HIND RANCE TO THE REGULAR TRAFFIC. THEREFORE, IT IS CLEAR THAT FROM AN UN-DEV ELOPED AREA, INFRASTRUCTURE IS DEVELOPED AND HANDED OVER TO THE GOVERNMENT AND AS EXPLAINED BY THE CBDT VIDE ITS CIRCULAR DATED 18-05 -2010, SUCH ACTIVITY IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (4) OF TH E 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 CIRCULAR ISSUED BY THE BOARD, RELIED ON BY LEARNED COUNSEL FOR THE ASSESSEE, CLEARLY INDICATE THAT THE ASSESSEE IS ELI GIBLE FOR DEDUCTION UNDER SECTION 80IA (4) OF THE ACT. THE DEPARTMENT I S NOT CORRECT IN HOLDING THAT THE ASSESSEE IS A MERE CONTRACTOR OF T HE WORK AND NOT A DEVELOPER. 34. WE ALSO FIND THAT AS PER THE PROVISIONS OF THE SECTION 80IA OF THE ACT, A PERSON BEING A COMPANY HAS TO ENTER INTO AN AGREE MENT WITH THE GOVERNMENT OR GOVERNMENT UNDERTAKINGS. SUCH AN AGRE EMENT IS A CONTRACT AND FOR THE PURPOSE OF THE AGREEMENT A PER SON MAY BE CALLED AS A CONTRACTOR AS HE ENTERED INTO A CONTRACT. BUT THE WORD 'CONTRACTOR' IS USED TO DENOTE A PERSON ENTERING INTO AN AGREEMENT FOR UNDERTAKING THE DEVELOPMENT OF INFRASTRUCTURE FACILITY. EVERY AGREE MENT ENTERED INTO IS A CONTRACT. THE WORD 'CONTRACTOR' IS USED TO DENOTE T HE PERSON WHO ENTERS INTO SUCH CONTRACT. EVEN A PERSON WHO ENTERS INTO A CONTRACT FOR DEVELOPMENT OF INFRASTRUCTURE FACILITY IS A CONTRAC TOR. THEREFORE, THE CONTRACTOR AND THE DEVELOPER CANNOT BE VIEWED DIFFE RENTLY. EVERY CONTRACTOR MAY NOT BE A DEVELOPER BUT EVERY DEVELOP ER DEVELOPING INFRASTRUCTURE FACILITY ON BEHALF OF THE GOVERNMENT IS A CONTRACTOR. 35. WE FIND THAT THE DECISION RELIED ON BY THE LEAR NED COUNSEL FOR THE ASSESSEE IN THE CASE OF CIT VS. LAXMI CIVIL ENGINEE RING WORKS [SUPRA] SQUARELY APPLICABLE TO THE ISSUE UNDER DISPUTE WHIC H IS IN FAVOUR OF THE ASSESSEE WHEREIN IT WAS HELD THAT MERE DEVELOPMENT OF A INFRASTRUCTURE FACILITY IS AN ELIGIBLE ACTIVITY FOR CLAIMING DEDUC TION UNDER SECTION 80IA OF THE ACT AFTER CONSIDERING THE JUDGEMENT OF THE MUMB AI HIGH COURT IN THE CASE OF ABG HEAVY ENGINEERING [SUPRA]. THE CASE OF ABG IS NOT THE PURE DEVELOPER WHEREAS, IN THE PRESENT CASE, THE ASSESSE E IS THE PURE DEVELOPER. WE ALSO FIND THAT SECTION 80IA OF THE AC T, INTENDED TO COVER THE ENTITIES CARRYING OUT DEVELOPING, OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY KEEPING IN MIND THE PRESENT BUSINESS MODELS AND INTEND TO GRANT THE INCENTIVES TO SUCH ENTITIES. TH E CBDT, ON SEVERAL OCCASIONS, CLARIFIED THAT PURE DEVELOPER SHOULD ALS O BE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IA OF THE ACT, WHICH ULTI MATELY CULMINATED INTO AMENDMENT UNDER SECTION 80IA OF THE ACT, IN TH E FINANCE ACT 2001, TO GIVE EFFECT TO THE AFORESAID CIRCULARS ISSUED BY THE CBDT. WE ALSO FIND THAT, TO AVOID MISUSE OF THE AFORESAID AMENDMENT, A N EXPLANATION WAS INSERTED IN SECTION 80IA OF THE ACT, IN THE FINANCE ACT-2007 AND 2009, TO CLARIFY THAT MERE WORKS CONTRACT WOULD NOT BE ELIGI BLE FOR DEDUCTIONS UNDER SECTION 80IA OF THE ACT. BUT, CERTAINLY, THE EXPLANATION CANNOT BE READ TO DO AWAY WITH THE ELIGIBILITY OF THE DEVELOP ER; OTHERWISE, THE PARLIAMENT WOULD HAVE SIMPLY REVERSED THE AMENDMENT MADE IN THE FINANCE ACT, 2001. THUS, THE AFORESAID EXPLANATION WAS INSERTED, CERTAINLY, TO DENY THE TAX HOLIDAY TO THE ENTITIES WHO DOES ONLY MERE WORKS CONTACT OR SUB-CONTRACT AS DISTINCT FROM THE DEVELOPER. THIS IS ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 5 CLEAR FROM THE EXPRESS INTENSION OF THE PARLIAMENT WHILE INTRODUCING THE EXPLANATION. THE EXPLANATORY MEMORANDUM TO FINANCE ACT 2007 STATES THAT THE PURPOSE OF THE TAX BENEFIT HAS ALL ALONG B EEN TO ENCOURAGE INVESTMENT IN DEVELOPMENT OF INFRASTRUCTURE SECTOR AND NOT FOR THE PERSONS WHO MERELY EXECUTE THE CIVIL CONSTRUCTION W ORK. IT CATEGORICALLY STATES THAT THE DEDUCTION UNDER SECTION 80IA OF THE ACT IS AVAILABLE TO DEVELOPERS WHO UNDERTAKES ENTREPRENEURIAL AND INVES TMENT RISK AND NOT FOR THE CONTRACTORS, WHO UNDERTAKES ONLY BUSINESS R ISK. WITHOUT ANY DOUBT, THE LEARNED COUNSEL FOR THE ASSESSEE CLEARLY DEMONSTRATED BEFORE US THAT THE ASSESSEE AT PRESENT HAS UNDERTAKEN HUGE RISKS IN TERMS OF DEPLOYMENT OF TECHNICAL PERSONNEL, PLANT AND MACHIN ERY, TECHNICAL KNOW- HOW, EXPERTISE AND FINANCIAL RESOURCES. FURTHER, TH E ORDER OF TRIBUNAL IN THE CASE OF B.T.PATIL CITED SUPRA IS PRIOR TO AMEND MENT TO SEC 80IA(4), AFTER THE AMENDMENT THE SECTION 80IA(4) READ AS (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPER ATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY, PRIOR TO AMENDMENT THE 'OR' BETWEEN THREE ACTIVITIES WAS NOT THERE, AFTER THE AMENDMENT 'OR' HAS BEEN INSERTED W.E.F. 1-4-2002 BY FINANCE ACT 2001. THEREFORE, IN OUR CONSIDERED VIEW, THE ASSESSEE SHOULD NOT BE DENIED THE DEDUCTION UND ER SECTION 80IA OF THE ACT AS THE CONTRACTS INVOLVES, DEVELOPMENT, OPE RATING, MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LI ABILITY PERIOD, THEN SUCH CONTRACTS CANNOT BE CALLED AS SIMPLE WORKS CON TRACT. IN OUR OPINION THE CONTRACTS WHICH CONTAIN ABOVE FEATURES TO BE SE GREGATED AND ON THIS DEDUCTION U/S. 80-IA HAS TO BE GRANTED AND THE OTHE R AGREEMENTS WHICH ARE PURE WORKS CONTRACTS HIT BY THE EXPLANATION SEC TION 80IA(13), THOSE WORK ARE NOT ENTITLE FOR DEDUCTION U/S 80IA OF THE ACT. THE PROFIT FROM SUCH CONTRACTS WHICH INVOLVES DEVELOPMENT, OPERATIN G, MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LI ABILITY PERIOD IS TO BE COMPUTED BY ASSESSING OFFICER ON PRO-RATA BASIS OF TURNOVER. THE ASSESSING OFFICER IS DIRECTED TO EXAMINE AND GRANT DEDUCTION ON ELIGIBLE TURNOVER AS DIRECTED ABOVE. IT IS NEEDLESS TO SAY T HAT IN SIMILAR CIRCUMSTANCES, SIMILAR VIEW HAS BEEN TAKEN BY THE C HENNAI BENCH OF THE TRIBUNAL AND DEDUCTION U/S. 80IA WAS GRANTED IN THE CASE OF M/S. CHETTINAD LIGNITE TRANSPORT SERVICES (P) LTD., IN I TA NO. 2287/MDS/06 ORDER DATED 27TH JULY, 2007 FOR THE ASSESSMENT YEAR 2004-05. LATER IN ITA NO. 1179/MDS/08 VIDE ORDER DATED 26TH FEBRUARY, 2010 THE TRIBUNAL HAS TAKEN THE SAME VIEW BY INTER-ALIA HOLDING AS FO LLOWS: '7. MOREOVER, THE REASONS FOR INTRODUCING THE EXPLA NATION WERE CLARIFIED AS PROVIDING A TAX BENEFIT BECAUSE MODERN ISATION REQUIRES A MASSIVE EXPANSION AND QUALITATIVE IMPROVEMENT IN INFRASTRUCTURES LIKE EXPRESSWAYS, HIGHWAYS, AIRPORT S, PORTS AND RAPID URBAN RAIL TRANSPORT SYSTEMS. FOR THAT PURPOS E, PRIVATE SECTOR PARTICIPATION BY WAY OF INVESTMENT IN DEVELO PMENT OF THE INFRASTRUCTURE SECTOR AND NOT FOR THE PERSONS WHO M ERELY EXECUTE THE CIVIL CONSTRUCTION WORK OR ANY OTHER WORK CONTR ACT HAS BEEN ENCOURAGED BY GIVING TAX BENEFITS. THUS THE PROVISI ONS OF SECTION 80IA SHALL NOT APPLY TO A PERSON WHO EXECUTES A WOR KS CONTRACT ENTERED INTO WITH THE UNDERTAKING OR ENTERPRISE REF ERRED TO IN THE SECTION BUT WHERE A PERSON MAKES THE INVESTMENT AND HIMSELF EXECUTES THE DEVELOPMENT WORK, HE CARRIES OUT THE C IVIL CONSTRUCTION WORK, HE WILL BE ELIGIBLE FOR THE TAX BENEFIT UNDER SECTION 80IA.' ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 6 36. THE ABOVE ORDER WAS FOLLOWED IN SUBSEQUENT ASSE SSMENT YEARS 2007- 2008 & 2008-09 IN ITA NOS. 1312 & 1313/MDS/2011 VID E ORDER DATED 18.11.2011 IN THE CASE OF THE SAME ASSESSEE. FURTHE R, IN SIMILAR CIRCUMSTANCES, THIS TRIBUNAL IN THE CASE OF M/S. GV PR ENGINEERS LTD. HYDERABAD IN ITA NO. 347/H/08 & OTHERS VIDE ORDER D ATED 29TH FEBRUARY 2012 HAS TAKEN SIMILAR VIEW AND GRANTED DEDUCTION U NDER SECTION 80IA OF THE ACT. 37. FURTHER, WE MAKE IT CLEAR THAT WHERE THE ASSESS EE HAS CARRIED OUT THE DEVELOPMENT OF INFRASTRUCTURE WORK IN CONSORTIUM AN D NOT AS A SUB- CONTRACTOR, THEN ALSO THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IA OF THE ACT. THE SAME IS APPLICABLE IN CASE OF WORK ALL OTTED BY GOVERNMENT CORPORATION/GOVERNMENT BODIES. 38. FURTHER IN THE CASE OF R.R. CONSTRUCTIONS, THE CHENNAI BENCH OF THE TRIBUNAL IN ITS ORDER DATED 3.10.2011 IN I.T.A. NO. 2061/MDS/2010 FOR ASSESSMENT YEAR 2007-08 HELD AS FOLLOWS: '3. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFU LLY PERUSED THE ENTIRE RECORD. THE FIRST ISSUE OF THE APPEAL IS REGARDING CLAIM OF DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. THE CAS E OF THE REVENUE IS THAT THE ASSESSEE IS A 'WORKS CONTRACTOR ' AND NOT A 'DEVELOPER' AS STIPULATED UNDER SECTION 80IA(4) OF THE ACT. THE SECTION 80IA(4) APPLIES TO ANY ENTERPRISE, WHICH CA RRIES ON THE BUSINESS OF (I) DEVELOPING OR (II) OPERATING AND MA INTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRU CTURE FACILITIES, WHICH FULFIL ALL THE ABOVE CONDITIONS. THERE CANNOT BE ANY QUESTION OF PROVIDING A CONDITION FOR SUCH AN ENTERPRISE TO START OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR A FTER 01.04.1995. FROM THE ASSESSMENT YEAR 2000-01, DEDUCTION IS AVAI LABLE IF THE ASSESSEE IS CARRYING OUT THE BUSINESS OF ANY ONE OF THE ABOVE MENTIONED THREE TYPES OF ACTIVITIES. WHEN AN ASSESS EE IS ONLY DEVELOPING AN INFRASTRUCTURE FACILITY PROJECT AND I S NOT MAINTAINING NOR OPERATING IT, OBVIOUSLY SUCH AN ASSESSEE WILL B E PAID FOR THE COST INCURRED BY IT; OTHERWISE, HOW WILL THE PERSON , WHO DEVELOPS THE INFRASTRUCTURE FACILITY PROJECT, REALIZE ITS CO ST? IF THE INFRASTRUCTURE FACILITY, JUST AFTER ITS DEVELOPMENT , IS TRANSFERRED TO THE GOVERNMENT, NATURALLY THE COST WOULD BE PAID BY THE GOVERNMENT. THEREFORE, MERELY BECAUSE THE TRANSFERE E HAD PAID FOR THE DEVELOPMENT OF INFRASTRUCTURE FACILITY CARR IED OUT BY THE ASSESSEE, IT CANNOT BE SAID THAT THE ASSESSEE DID N OT DEVELOP THE INFRASTRUCTURE FACILITY. IF THE INTERPRETATION DONE BY THE ASSESSING OFFICER IS ACCEPTED, NO ENTERPRISE CARRYING ON THE BUSINESS OF ONLY DEVELOPING HE INFRASTRUCTURE FACILITY WOULD BE ENTI TLED TO DEDUCTION UNDER SECTION 80IA(4), WHICH IS NOT THE INTENTION O F THE LAW. AN ENTERPRISE, WHO DEVELOP THE INFRASTRUCTURE FACILITY IS NOT PAID BY THE GOVERNMENT, THE ENTIRE COST OF DEVELOPMENT WOUL D BE A LOSS IN THE HANDS OF THE DEVELOPER AS HE IS NOT OPERATING T HE INFRASTRUCTURE FACILITY. THE LEGISLATURE HAS PROVID ED THAT THE INCOME OF THE DEVELOPER OF THE INFRASTRUCTURE PROJE CT WOULD BE ELIGIBLE FOR DEDUCTION, IT PRESUPPOSES THAT THERE C AN BE INCOME TO DEVELOPER I.E. TO THE PERSON 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 ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 7 INFRASTRUCTURE FACILITY, FOR THE SIMPLE REASON THAT HE IS NOT HAVING THE RIGHT/AUTHORIZATION TO OPERATE THE INFRASTRUCTU RE FACILITY AND TO COLLECT TOLL THERE FROM, HAS NO OTHER SOURCE OF REC OUPMENT OF HIS COST OF DEVELOPMENT. WHILE FILING THE RETURN, THE A SSESSEE HAD MADE CLAIM UNDER SECTION 80IA(4) OF THE ACT. 4. THE ASSESSEE HAS ALSO PRODUCED ALL SIX AGREEMENT S REGARDING SIX PROJECTS UNDERTAKEN BEFORE THE ASSESSING OFFICER, W HOSE COPIES ARE AVAILABLE BEFORE US ALSO. IT IS A FACT THAT EVE N AFTER TAKING A CONTRACT FROM THE GOVERNMENT, IF THE ASSESSEE DEVEL OPS INFRASTRUCTURE FACILITIES, IT WOULD BE REGARDED AS A 'DEVELOPER' AND NOT AS A 'WORKS CONTRACTOR'. THE ASSESSEE FIRM HAS CARRIED ON ENTIRE CONSTRUCTION/DEVELOPMENT OF THE INFRASTRUCTU RE FACILITIES AND SATISFY ALL THE CONDITIONS OF SECTION 80IA(4)(I )(A). IT IS UNDENIABLE FACT THAT THE ASSESSEE HAS TAKEN DEVELOP MENT OF INFRASTRUCTURE FACILITY AGREEMENT FROM THE STATE GO VERNMENT/LOCAL AUTHORITY. A CONTRACTOR WHO DEVELOPS THE INFRASTRUC TURE FACILITY BECOMES A DEVELOPER TO CLAIM EXEMPTION UNDER SECTIO N 80IA(4). THE HON'BLE BOMBAY BENCH OF ITAT WHILE DECIDING THE CASE OF PATEL ENGINEERING LTD. VS. DCIT IN ITA NO.1221/MUM/ 2004 HAS GONE TO THE EXTENT OF HOLDING THAT THE ASSESSEE, A CIVIL CONTRACTOR, HAVING EXECUTED A PART OF CONTRACTS OF IRRIGATION A ND WATER SUPPLY ON 'BUILD AND TRANSFER' BASIS AND HANDED OVER THEM TO CONTRACTEE GOVERNMENTS, WAS ELIGIBLE FOR DEDUCTION UNDER SECTI ON 80IA(4). 5. WE HAVE ALSO TAKEN A SIMILAR VIEW IN ITA NO. 554 /MEDS/2010 IN THE CASE OF EAST COAST CONSTRUCTIONS & INDUSTRIES L TD V. DCIT VIDE ORDER DATED 13.09.2011 AND RELEVANT PARAS FROM 9 TO 14 ARE REPRODUCED HEREUNDER: '9. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE CAN SAFELY SAY THAT THE BENEFIT OF SECTION 80IA IS AVAILABLE O NLY TO A 'DEVELOPER' WHO CARRIES ON BUSINESS OF 'DEVELOPING OF INFRASTRUCTURE FACILITY'. A PERSON WHO ENTERS INTO CONTRACT WITH ANOTHER PERSON FOR EXECUTING 'WORKS CONTRACTS' IS NOT ELIGIBLE FOR SUCH A BENEFIT. EXPLANATION TO SECTION 80IA WAS INSERTED BY FINANCE ACT, 2007 WITH RETROSPECTIVE EF FECT FROM 1.4.2000 WHICH HAS FURTHER BEEN AMENDED BY FINANCE (NO. 2) ACT, 2009 WITH RETROSPECTIVE EFFECT FROM 1.4.200 0. THE AMENDMENT IN THIS EXPLANATION WAS NECESSITATED DUE TO CONTRARY JUDICIAL DECISION ON THIS ISSUE. THUS, WE CAN UNEQUIVOCALLY NOW SAY THAT ANY UNDERTAKING OR ENTER PRISE WHICH EXECUTES THE INFRASTRUCTURE DEVELOPMENT PROJE CT, AS REFERRED TO IN SUB-SECTION(4) AS A WORKS CONTRACT A WARDED BY ANY PERSON INCLUDING THE CENTRAL OR STATE GOVERN MENT, IS NOT ELIGIBLE FOR TAX BENEFIT U/S 80IA(4). HAVING SA ID THAT, NOW WE EXAMINE THE FACTS OF THIS CASE. THE ASSESSEE - COMPANY WAS GIVEN THIS BENEFIT IN ASSESSMENT YEAR 2 003-04 BY THE DEPARTMENT ON IDENTICAL FACTS AFTER CONSIDER ING THE EXPLANATION AND AMENDMENT THERETO. TO TRACE THE HIS TORY OF THIS DEDUCTION, WE FIND THAT ORIGINALLY, IN THE PRO VISION OF SECTION 80IA, THERE WAS NO MENTION OF ANY DEVELOPME NT OF 'INFRASTRUCTURE FACILITY'. IT IS ONLY WITH EFFECT F ROM 1.4.2000, THIS SECTION WAS DIVIDED INTO TWO PORTIONS 80IA AND 80IB. SECTION 80IA(4) PRESCRIBES ABOUT THE DEDUCTION AVAI LABLE TO ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 8 A DEVELOPER WHO DEVELOPS INFRASTRUCTURE FACILITIES. IN VIEW OF THE AMENDMENT INSERTED BY THE FINANCE ACT, 2007, WITH RETROSPECTIVE EFFECT FROM 1.4.2000, THE DEDUCTION U /S 80IA IS AVAILABLE TO THOSE ASSESSEES WHO ARE 'INVESTING AND DEVELOPING INFRASTRUCTURE FACILITY' AND NOT TO PERS ONS WHO SIMPLY EXECUTES 'WORKS- CONTRACTS'. EXPLANATION IN QUESTION, AS IT STANDS TODAY, READS AS UNDER: 'EXPLANATION - FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT NOTHING CONTAINED IN THIS SECTION(I.E . 80IA) SHALL APPLY TO A PERSON WHO EXECUTES A WORKS CONTRACT ENTERED INTO WITH THE UNDERTAKING OR ENTERPRISE, AS THE CASE MAY BE.' IN CONTRAST TO THIS, A PERSON WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON (I.E., UNDERTAKING OR ENTERPRISE REFERRED TO IN SECTION 80-IA) FOR EXECUT ING WORKS CONTRACT, WILL NOT BE ELIGIBLE FOR TAX BENEFI T UNDER SECTION 80- IA. 10. WE HAVE FOUND THAT THE ASSESSEE-COMPANY IS A WO RKS CONTRACTOR, WHO HAS ENTERED INTO AGREEMENT WITH THE LOCAL BODIES TO EXECUTE CERTAIN PART OF THE WORK AWARDED TO IT THROUGH CONTRACT FOR INFRASTRUCTURE FACILITY. IT IS TRUE THAT WHERE A PERSON WHO MAKES INFRASTRUCTURE AND HIMSELF EXECUTES DEVELOPMENT WORK AND CARRIES OUT CIVIL WOR K WILL BE ELIGIBLE FOR TAX BENEFIT U/S 80IA OF THE ACT. IN CONTRAST TO THIS, A PERSON WHO ENTERS INTO A CONTRACT WITH ANOT HER PERSON FOR EXECUTING WORKS CONTRACT, WILL NOT BE EL IGIBLE FOR TAX BENEFIT U/S 80IA. IT WAS CLARIFIED BY THE CIRCU LAR NO. 3 OF 2008 DATED 12.3.2008 THAT THE PROVISIONS OF SECTION 80IA SHALL NOT APPLY TO A PERSON WHO EXECUTES ONLY WORK CONTRACTS AND ONLY THOSE WHO MAKE THE DEVELOPMENT W ORK WILL BE ELIGIBLE FOR TAX BENEFIT U/S 80IA OF THE AC T. BE THAT AS IT MAY, WHEN WE APPLY THIS PROVISION IN ITS LETTERS AND SPIRIT, WE FIND THAT THIS ASSESSEE IS VERILY ELIGIBLE FOR D EDUCTION U/S 80IA, AS THE ASSESSEE-COMPANY FULFILS ALL THE RELEV ANT CONDITIONS. THE FACTS OF THIS CASE GO TO PROVE THAT THE ASSESSEE IS A 'DEVELOPER' OF INFRASTRUCTURE FACILIT IES. THE REASONS FOR OUR ABOVE CONCLUSION ARE GIVEN IN THE F OLLOWING PARAS. FIRSTLY, THE ASSESSEE-COMPANY NOT ONLY DESIG NS BUT ALSO CREATES NEW PRODUCTS. THE ASSESSEE HAD UNDERTA KEN FOUR PROJECTS DURING THE RELEVANT YEAR AND EXECUTED , CONSTRUCTED, DELIVERED AND MAINTAINED BY IT. AS PER THE DEFINITION OF ADVANCED LAW LEXICON [PLACED AT PAGE 533 OF THE PAPER BOOK] 'DEVELOPER' MEANS - A PERSON ENGAGE D IN DEVELOPMENT OR OPERATION OR MAINTENANCE OF SPECIAL ECONOMIC ZONE, AND ALSO INCLUDES ANY PERSON AUTHORI ZED FOR SUCH PURPOSE BY ANY SUCH DEVELOPER. THE 'WORKS CONT RACT' MEANS AN AGREEMENT IN WRITING FOR THE EXECUTION OF ANY WORK RELATING TO CONSTRUCTION, REPAIR, OR MAINTENAN CE OF ANY BUILDING OR SUPERSTRUCTURE, DAM, WEIR, CANAL, RESER VOIR, TANK, LAKE, ROAD, WELL, BRIDGE, CULVERT, FACTORY, WORKSHO P, POWERHOUSE, TRANSFORMERS OR SUCH OTHER WORKS OF THE STATE GOVERNMENT OR PUBLIC UNDERTAKINGS AS THE STATE ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 9 GOVERNMENT MAY BE BY NOTIFICATION, SPECIFY IN THIS BEHALF AT ANY OF ITS STAGES ENTERED INTO BY THE STATE GOVERNM ENT OR BY AN OFFICIAL OF THE STATE GOVERNMENT OR PUBLIC UNDER TAKING AND INCLUDES AN AGREEMENT FOR THE SUPPLY OF GOODS O R MATERIAL AND ALL OTHER MATTERS RELATING TO EXECUTIO N OF ANY OF THE SAID WORKS. THE CASE OF ACIT VS INDWELL LIANING S PVT. LTD (SUPRA), ON WHICH THE ASSESSING OFFICER HAS PLA CED RELIANCE IS ALSO RELEVANT AND WE EXTRACT CERTAIN RE LEVANT PORTION OF THIS DECISION FOR READY REFERENCE: VIDE FINANCE ACT, 2007, AN EXPLANATION WAS INSERTED WITH RETROSPECTIVE EFFECT FROM APRIL, 2000 AFTER SUB-SEC TION (13) OF SECTION 80- IA, WHICH READS AS UNDER : 'FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED T HAT 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.' ACCORDING TO ATTORNEY'S POCKET DICTIONARY, IN RELAT ION TO A CORPORATION OR BUSINESS, THE TERM 'UNDERTAKING' DEN OTES ITS WHOLE ENTERPRISE AND THE WORD 'ENTERPRISE' CONNOTES ALL THE RELATED ACTIVITIES PERFORMED EITHER THROUGH UNIFIED OPERATION OR COMMON CONTROL BY ANY PERSON OR PERSONS FOR A CO MMON BUSINESS PURPOSE. THE MENS LEGIS WITH REFERENCE TO DEVELOPER OF INFRA STRUCTURE FACILITY CAN BE GATHERED FROM THE MEMORANDUM EXPLAI NING THE PROVISIONS IN THE FINANCE BILL, 2007, REPORTED IN [2007] 289 ITR (ST.) 292 AT PAGE 312, WHICH READS AS UNDER : 'SECTION 80-IA, INTER ALIA, PROVIDES FOR A TEN-YEAR TAX BENEFIT TO AN ENTERPRISE OR AN UNDERTAKING ENGAGED IN DEVELOPMENT OF INFRASTRUCTURE FACILITIES, INDUSTRIA L PARKS AND SPECIAL ECONOMIC ZONES. THE TAX BENEFIT WAS INTRODUCED FOR THE REASON THAT INDUSTRIAL MODERNIZATION REQUIRES A PASSIVE EXPANSI ON OF, AND QUALITATIVE IMPROVEMENT IN, INFRASTRUCTURE (VIZ., EXPRESSWAYS, HIGHWAYS, AIRPORTS, PORTS AND RAPID URBAN RAIL TRANSPORT SYSTEMS) WHICH WAS LACKI NG IN OUR COUNTRY. THE PURPOSE OF THE TAX BENEFIT HAS ALL ALONG BEEN FOR ENCOURAGING PRIVATE SECTOR PARTICIPATION BY WAY OF INVESTMENT IN DEVELOPMENT O F THE INFRASTRUCTURE SECTOR AND NOT FOR THE PERSONS W HO MERELY EXECUTE THE CIVIL CONSTRUCTION WORK OR ANY OTHER WORKS CONTRACT. ACCORDINGLY, IT IS PROPOSED TO CLARIFY THAT THE PRO VISIONS OF SECTION 80-IA SHALL NOT APPLY TO A PERSON WHO EXECU TES A WORKS CONTRACT ENTERED INTO WITH THE UNDERTAKING OR ENTERPRISE REFERRED TO IN THE SAID SECTION. THUS, I N A CASE WHERE A PERSON MAKES THE INVESTMENT AND HIMSELF EXE CUTES THE DEVELOPMENT WORK, I.E., CARRIES OUT THE CIVIL C ONSTRUCTION ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 10 WORK, HE WILL BE ELIGIBLE FOR TAX BENEFIT UNDER SEC TION 80- LA. IN CONTRAST TO THIS, A PERSON WHO ENTERS INTO A CON TRACT WITH ANOTHER PERSON (I.E., UNDERTAKING OR ENTERPRISE REF ERRED TO IN SECTION 80-IA) FOR EXECUTING WORKS CONTRACT, WIL L NOT BE ELIGIBLE FOR TAX BENEFIT UNDER SECTION 80- IA. THIS AMENDMENT WILL TAKE RETROSPECTIVE EFFECT FROM APRIL I, 2000 AND WILL ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YEAR 2000-01 AND SUBSEQUENT YEARS.' IT IS MADE ABUNDANTLY CLEAR THAT THE PRESCRIPTION O F SECTION 80- IA SHALL NOT APPLY TO A PERSON WHO EXECUTES WOR K CONTRACTS ENTERED INTO WITH AN UNDERTAKING OR ENTER PRISE. THUS, IN A CASE WHERE A PERSON WHO MAKES INVESTMENT AND HIMSELF EXECUTES DEVELOPMENT WORKS AND CARRIES OUT CIVIL WORKS, WILL BE ELIGIBLE FOR TAX BENEFIT UNDER SECTI ON 80- IA OF THE ACT. IN CONTRAST TO THIS, A PERSON WHO ENTERS I NTO A CONTRACT WITH ANOTHER PERSON FOR EXECUTING WORKS CO NTRACT WILL NOT BE ELIGIBLE FOR THE TAX BENEFIT UNDER SECT ION 80-IA OF THE ACT. IN THE PRESENT CASE, WE FIND THAT THE ASSESSEE WAS DOING ONLY CONTRACT WORKS OF IN SITU CEMENT LINING FOR WA TER SUPPLY PROJECT OF THE GUJARAT WATER SUPPLY AND SEWERAGE BO ARD. AS SUCH, THE BENEFIT OF SECTION 80-IA CANNOT BE EXTEND ED TO THE ASSESSEE. THE DECISIONS RELIED UPON BY THE ASSESSEE WERE RENDERED PRIOR TO THE AMENDMENT AND AS SUCH NOT REL EVANT FOR DECIDING THIS ISSUE. WE, THEREFORE, RESTORE THE ORDER OF THE ASSESSING OFFICER AND REVERSE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). ' 11. TO FURTHER ELABORATE THE DISCUSSION ON THIS ISS UE, PARAS 5 & 6 OF THE DECISION OF ITAT PUNE BENCH RENDERED IN THE CASE OF LAXMI CIVIL ENGG. P. LTD VS ADDL. CIT,ORDER DATE D 8.6.2011 ARE BEING EXTRACTED HEREIN BELOW: 5. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE. THE CONTENTIOUS ISSUES BEFORE US ARE (I) W HETHER THE CONTRACTOR IS SYNONYMOUS WITH THE DEVELOPER WITHIN THE MEANING OF SECTION 80IA (4)(I) OF THE ACT; (II) WHETHER THE CONDITION PLACED IN CLAUSE (C) IS APPLICABLE TO THE CASE OF A DEVELO PER, WHO IS NOT CARRYING ON BUSINESS OF OPERATING AND MAINTAINING T HE INFRASTRUCTURAL FACILITIES. IN OUR OPINION, THE ANS WER TO THESE QUESTION ARE PROVIDED BY THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF ABG HEAVY ENGG LTD (SUPRA). IN THIS REGARD, WE PERUSED THE ABOVE CITED PARA-22 OF THE SAID JUDGMEN T AND FOR THE SAKE OF COMPLETENESS, THE SAID PARAGRAPH IS REPRODU CED AS UNDER:- '22. THE SUBMISSION WHICH WAS URGED ON BEHALF OF TH E REVENUE IS THAT CLAUSE (III) OF SUB-SECTION (4A) OF SECTION 80-LA, ONE OF THE CONDITIONS IMPOSED WAS TH AT THE ENTERPRISE MUST START OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR AFTER 1ST APRIL, 1995. THE SAME REQUIREMENT IS EMBODIED IN SUB CLAUSE (1) OF SUB-CLAUSE (4) OF THE AMENDED PROVISIONS. IT WAS ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 11 URGED THAT SINCE THE ASSESSEE WAS NOT OPERATING AND MAINTAINING THE FACILITY, HE DID NOT FULFIL THE CON DITION. THE SUBMISSION IS FALLACIOUS BOTH IN FACT AND IN LA W. ' THAT THE ASSESSEE WAS MAINTAINING THE FACILITY IS N OT IN DISPUTE. THE FACILITY WAS COMMENCED AFTER 1ST APRIL, 1995. T HEREFORE, THE REQUIREMENT WAS MET IN FACT. MOREOVER, AS A MATTER OF LAW, WHAT THE CONDITION ESSENTIALLY MEANS IS THAT THE INFRAST RUCTURE FACILITY SHOULD HAVE BEEN OPERATIONAL AFTER 1ST APRIL, 1995. AFTER SECTION 80IA WAS AMENDED BY THE FINANCE ACT, 2001, THE SECT ION APPLIES TO AN ENTERPRISE CARRYING ON THE BUSINESS OF (I) DE VELOPING; OR (II) OPERATING AND MAINTAINING; OR (III) DEVELOPING, OPE RATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY' WHICH FULF ILS CERTAIN CONDITIONS. THOSE CONDITIONS ARE (I) OWNERSHIP OF T HE ENTERPRISES BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM S; (II) AN AGREEMENT WITH THE CENTRAL OR STATE GOVERNMENT, LOC AL AUTHORITY OR STATUTORY BODY; AND (III) THE START OF OPERATION AN D MAINTENANCE OF THE INFRASTRUCTURE FACILITY SHOULD COMMENCE AFTE R 1ST APRIL, 1995. THE REQUIREMENT THAT OPERATION AND MAINTENANC E OF THE INFRASTRUCTURE FACILITY SHOULD COMMENCE AFTER 1ST A PRIL, 1995 HAS TO BE HARMONIOUSLY CONSTRUED WITH THE MAIN PROVISIO N UNDER WHICH DEDUCTION IS AVAILABLE TO AN ASSESSEE WHO DEVELOPS OR OPERATES AND MAINTAINS, OR DEVELOPS, OPERATES AND MAINTAINS AN INFRASTRUCTURE FACILITY'. A HARMONIOUS READING OF THE PROVISIONS IN ITS ENTIR ETY WOULD LEAD TO THE CONCLUSION THAT THE DEDUCTION IS AVAILABLE T O AN ENTERPRISE WHICH (I) DEVELOPS, OR OPERATES AND MAINTAINS; OR ( III) DEVELOPS, MAINTAIN AND OPERATES THAT INFRASTRUCTURE FACILITY. HOWEVER, THE COMMENCEMENT OF THE OPERATION AND MAINTENANCE: OF T HE INFRASTRUCTURE FACILITY SHOULD BE AFTER 1' APRIL, 1 995. IN THE PRESENT CASE THE ASSESSEE CLEARLY FULFILLED THIS CONDITION '. BEFORE THE AMENDMENT THAT WAS BROUGHT ABOUT BY PARL IAMENT BY FINANCE ACT, 2001 WE HAVE ALREADY NOTED THAT THE CO NSISTENT LINE OF CIRCULARS OF THE BOARD POSTULATED THE SAME POSIT ION. THE AMENDMENT MADE BY PARLIAMENT TO S. 80-IA(4) OF THE ACT, SET THE MATTER BEYOND ANY CONTROVERSY BY STIPULATING THAT T HE THREE CONDITIONS FOR DEVELOPMENT, OPERATION AND MAINTENAN CE WERE NOT INTENDED TO BE CUMULATIVE IN NATURE 6. THE ABOVE JUDGMENT OF THE HON'BLE HIGH COURT IS DELIVERED IN THE CASE OF ABG HEAVY ENGG LTD (SUPRA), WHO IS A CO NTRACTOR FOR THE INP TRUST AND THAT CONTACTOR, ASSESSEE IS FOUND TO BE AN ELIGIBLE DEVELOPER FOR MAKING CLAIM OF DEDUCTION U/ S SECTION 80IA (4) OF THE ACT. FROM THE ABOVE, IT IS EVIDENT THAT THE PERSON WHO ONLY DEVELOPS THE INFRASTRUCTURE DO NOT HAVE THE OC CASION TO OPERATE AND MAINTAIN THE INFRASTRUCTURE. IT IS FURT HER EVIDENT THAT THE HARMONIOUS READING IS NECESSARY AND MANDATORY I N VIEW OF HIGH COURT'S JUDGMENT IN THE CASE OF AN ENTERPRISE CARRYING ON BUSINESS OR DEVELOPING WHICH IS THE CASE OF THE ASS ESSEE, ALL THE CONDITIONS REFERRED TO CLAUSE (I) OF SECTION 80IA ( 4) SHOULD REFER TO THE CONDITIONS AS APPLICABLE TO THE DEVELOPER. IN O THER WORDS, THE DEVELOPER WHO IS ONLY DEVELOPING THE INFRASTRUCTURE FACILITIES SINCE HE DOES NOT OPERATE AND MAINTAIN INFRASTRUCTURAL FA CILITIES, CANNOT ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 12 BE EXPECTED TO FULFIL THE CONDITION AT SUB CLAUSE ( C) WHICH IS AN IMPOSSIBILITY AND THE REQUIREMENTS TO FULFIL THE SA ID CONDITION SHALL AMOUNT TO ABSURDITY AND THEREFORE UNCALLED FOR. THE REFORE, WE FIND REQUIREMENT OF HARMONIOUS READING OF SUB-CLAUSE (C) VIS--VIS OF CLAUSE (I) OF SECTION 80IA (4) OF THE ACT. THUS, TH E DISCUSSION IN HIGH COURT'S DECISION IN PARAGRAPH-22 EXTRACTED ABO VE, IS DIRECTLY APPLICABLE TO THE FACTS OF THE CASE AND EVENTUALLY IS ENTITLED FOR THE DEDUCTION UNDER SECTION 80IA (4) OF THE ACT. ACCORD INGLY, THE MODIFIED GROUND, WHICH IS COMMON IN ALL THE FOUR AP PEALS IS ALLOWED IN FAVOUR OF THE ASSESSEE. ' 12. LET US REMIND OURSELVES THAT THE HON'BLE SUPREM E COURT IN THE CASE OF BAJAJ TEMPO LTD VS CIT, 196 ITR 188, HAS OR DAINED THAT TAXING STATUTE GRANTING INCENTIVES FOR PROMOTING GR OWTH AND DEVELOPMENT SHOULD BE LIBERALLY CONSTRUED. 13. NOW, THE QUESTION ARISES AS TO WHETHER THE TERM 'CONTRACTOR' IS NOT ESSENTIALLY CONTRADICTORY TO THE TERM 'DEVELOPE R'. IN FACT, IN EVERY DEVELOPMENT THE TERM 'DEVELOPER' WILL DEFINIT ELY BE A 'WORKS CONTRACTOR' BUT EVERY WORKS CONTRACTOR MAY NOT BE A 'DEVELOPER'. A 'DEVELOPER' IS A SPECIFIC KIND OF WORKS CONTRACTOR TO BE ELIGIBLE FOR DEDUCTION U/S 80IA(4) WHO FULFILS ALL THE CONDITION S NAMELY, IF THE ASSESSEE DEVELOPS THE INFRASTRUCTURE FACILITY IF IT OPERATES THE INFRASTRUCTURE FACILITY AND IF IT MAINTAINS THE INF RASTRUCTURE FACILITY OR TO PUT IT IN SIMPLER TERMS, THE HARMONIOUS READI NG OF THE PROVISIONS IN ITS ENTIRETY WOULD LEAD TO THE CONCLU SION THAT THIS DEDUCTION IS AVAILABLE TO AN ENTERPRISE WHO - DEVEL OPS OR OPERATES AND ALSO MAINTAINS; OR DEVELOPS, MAINTAINS AND OPER ATES THAT INFRASTRUCTURE FACILITY. THE PROVISION FOR GIVING T HE IMPUGNED INCENTIVES HAS BEEN EXAMINED, RE-EXAMINED, MODIFIED AND AMENDED AFTER GIVING CONSCIOUS AND DELIBERATE DISCU SSIONS BY THE CONCERNED LAW MAKERS. TO OUR GREAT CHAGRIN EVEN AFT ER THIS CONSCIOUS EXERCISE AN ENTITY WHO EXECUTES THE WORKS CONTRACT ENTERED INTO BETWEEN LOCAL AUTHORITY/CENTRAL OR STA TE GOVERNM ENT AND MAKES A DEVELOPMENT OF AN INFRASTRUCTURE HAS NO T BEEN EXCLUDED FROM THE SCOPE OF THIS PROVISION. AND RIGH TLY SO, BECAUSE WHAT INFRASTRUCTURE IS REQUIRED IN PUBLIC DOMAIN IS THE OUTLOOK/DUTY OF A LOCAL AUTHORITY OR OF A CENTRAL/S TATE GOVERNMENT. WHEN A CERTAIN INFRASTRUCTURE IS NEEDED , THE CONCERNED AUTHORITIES HAVE A BROADER PICTURE IN THE IR MIND AIMING AT ACQUIRING CERTAIN FACILITY FOR WHICH INFRASTRUCT URE DEVELOPMENT IS REQUIRED. SO, TO SAY, WHEN ANY ASSESSEE/ENTERPRI SE AGREES UNDER A CONTRACT TO DEVELOP SUCH AN INFRASTRUCTURE FACILITY, IT CANNOT STRAIGHT AWAY BE DUBBED AS NOT THE BRAINCHIL D OF THAT ENTERPRISE, BUT ONLY OF THE AUTHORITY IN QUESTION. THEREFORE, AGAIN THIS PROVISION IN SO FAR AS THE CONDITIONS REQUIRED TO BE FULFILLED TO BE ELIGIBLE FOR THIS INCENTIVE HAD TO BE PROVIDED B Y THE JURIDICAL FORUMS DEALING WITH THIS ISSUE. AFTER IN-DEPTH DELI BERATIONS, DISCUSSIONS AND EXAMINATION OF THESE PROVISIONS, FI NALLY, IT HAS BEEN RESOLVED THAT IF AN ENTERPRISE EVEN AFTER ENTE RING INTO A CONTRACT WITH A LOCAL AUTHORITY OR THE GOVERNMENTS, MAY BE CENTRAL OR STATE, IN CASE IT CONSTRUCTS THE INFRASTRUCTURE FACILITY, OPERATES IT AND ALSO MAINTAINS THE SAME, IT WOULD BE ELIGIBLE F OR THIS DEDUCTION. ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 13 14. NOW, LET US EXAMINE THE FACTS OF THE GIVEN CASE . IT IS AN UNDENIABLE FACT THAT THE ASSESSEE IS ENGAGED IN THE CIVIL CONSTRUCTION WORK LIKE CONSTRUCTION OF FLYOVER, BRI DGE UNDERPASS, SEWERAGE, WATER SUPPLY ETC. FOR VARIOUS LOCAL BODIE S, RAILWAYS, CENTRAL/STATE GOVERNMENTS. IN FACT, AS PER THE TERM S OF AGREEM ENT, EVEN THE INITIAL PROPOSALS FORMULATED BY THE DEPARTMENT WHICH ARE STATED TO BE TENTATIVE, THE AS SESSEE HAS THE LIBERTY TO MAKE DIFFERENT PROPOSALS WITHOUT DETRIME NTAL TO THE GENERAL FEATURES OF THE DEPARTMENTAL PROPOSAL, LIKE ROAD LEVEL/BOTTOM OF DECK LEVEL, MFL, SILL LEVEL, LINEAR WATER WAY, WIDTH OF THE BRIDGE ETC. RIGHT FROM THE DRAWINGS TO THE W ORK OF CONSTRUCTION HAS BEEN DONE BY THIS ASSESSEE AND HAS BORNE THE COST ITSELF. THE COMPANY HAS CONSTRUCTED, DELIVERED AND MAINTAINED AND SECURITY IS ALSO MAINTAINED THEREAFT ER. SO, THIS IS A CASE OF TRANSFER OF PROPERTY IN CHATTEL AND NOT A C ONTRACT OF SERVICE. A 'DEVELOPER' AS PER THE ADVANCED LAW LEXI CON MEANS 'A PERSON ENGAGED IN DEVELOPMENT OR OPERATION OR MAINT ENANCE OF SPECIAL ECONOMIC ZONE, AND ALSO INCLUDES ANY PERSON AUTHORIZED FOR SUCH PURPOSE BY ANY SUCH DEVELOPER'. IN THE CAS E OF ACIT VS BHARAT UDYOG LTD, 'F' BENCH OF ITAT MUMBAI, HAS CON CLUDED THAT ANY ASSESSEE WHO IS ENGAGED IN DEVELOPING THE INFRA STRUCTURE FACILITY AND ALSO OPERATING AND MAINTAINING THE SAM E, IS ENTITLED TO THE BENEFIT OF DEDUCTION U/S 80IA(4). A COPY OF THI S DECISION IS ENCLOSED AT PAGE 139 OF THE PAPER BOOK. IN THE CASE OF PATEL ENGINEERING LTD VS DY. CIT, 84 TTJ (MUMBAI) 646 [CO PY ENCLOSED AT PAGE NO. 145 OF THE PAPER BOOK], IT HAS BEEN HEL D THAT A PERSON, WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON WILL BE TREATED AS A 'CONTRACTOR' UNDOUBTEDLY; AND THAT ASSESSEE HAVING ENTERED INTO AN AGREEMENT WITH THE GOVERNMENT OF MAHARASHTRA AND AL SO WITH APSEB FOR DEVELOPMENT OF THE INFRASTRUCTURE PROJECT S, IS OBVIOUSLY A CONTRACTOR BUT DOES NOT DEROGATE THE ASSESSEE FRO M BEING A 'DEVELOPER' AS WELL. THE TERM 'CONTRACTOR' IS NOT N ECESSARILY CONTRADICTORY TO THE TERM 'DEVELOPER'. ON THE OTHER HAND, RATHER SECTION 80IA(4) ITSELF PROVIDES THAT ASSESSEE SHOUL D DEVELOP THE INFRASTRUCTURE FACILITY AS PER THE AGREEMENT WITH T HE CENTRAL GOVERNMENT, STATE GOVERNMENT OR A LOCAL AUTHORITY. SO, ENTERING INTO A LAWFUL AGREEMENT AND THEREBY BECOMING A CONT RACTOR SHOULD IN NO WAY BE A BAR TO THE ONE BEING A 'DEVELOPER'. THE ASSESSEE HAS DEVELOPED INFRASTRUCTURE FACILITY AS PER THE AG REEMENT WITH MAHARASHTRA GOVERNMENT/APSEB, THEREFORE, MERELY BEC AUSE IN THE AGREEMENT FOR DEVELOPMENT OF INFRASTRUCTURE FACILIT Y THE ASSESSEE IS REFERRED TO AS A CONTRACTOR OR BECAUSE SOME BASI C SPECIFICATIONS ARE LAID DOWN, IT DOES NOT DETRACT THE ASSESSEE FRO M THE POSITION OF BEING A 'DEVELOPER'; NOR WILL IT DEBAR THE ASSESSEE FROM CLAIMING DEDUCTION U/S 80IA(4). THE FACTS OF THE PRESENT CAS E ARE EXACTLY IDENTICAL TO THE FACTS OF THAT CASE RENDERED BY ITA T MUMBAI BENCH IN WHICH UNDER IDENTICAL FACTS AND CIRCUMSTANCES, T HE ASSESSEE HAS BEEN HELD TO BE ELIGIBLE FOR DEDUCTION U/S 80IA(4). SECTION 80IA(4)(I)(B) REQUIRES DEVELOPMENT OF INFRASTRUCTUR E FACILITY AND TRANSFER THEREOF AS PER AGREEMENT AND IT CANNOT BE DISPUTED IN VIEW OF THE MATERIAL ON RECORD THAT THE ASSESSEE HA S TRANSFERRED THE INFRASTRUCTURE FACILITY DEVELOPED BY IT BY HAND ING OVER THE POSSESSION THEREOF TO THE CONCERNED AUTHORITY AS RE QUIRED BY THE AGREEMENT. THE HANDING OVER OF THE POSSESSION OF DE VELOPED INFRASTRUCTURE FACILITY/PROJECT IS THE TRANSFER OF THE INFRASTRUCTURE ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 14 FACILITY/PROJECT BY THE ASSESSEE TO THE AUTHORITY. THE HANDING OVER OF THE INFRASTRUCTURE FACILITY/PROJECT BY THE DEVEL OPER TO THE GOVERNMENT OR AUTHORITY TAKES PLACE AFTER RECOUPMEN T OF THE DEVELOPER'S COSTS WHETHER IT BE 'BT' OR 'BOT' OR 'B OOT' BECAUSE IN 'BOT' AND 'BOOT' THIS RECOUPMENT IS BY WAY OF COLLE CTION OF TOLL THERE FROM WHEREAS IN 'BT' IT IS BY WAY OF PERIODIC AL PAYMENT BY THE GOVERNMENT/AUTHORITY. THE LAND INVOLVED IN INFR ASTRUCTURE FACILITY/PROJECT ALWAYS BELONGS TO THE GOVERNMENT/L OCAL AUTHORITY ETC., WHETHER IT BE THE CASE OF 'BOT' OR 'BOOT' AND IT IS HANDED OVER BY THE GOVERNMENT/AUTHORITY TO THE DEVELOPER F OR DEVELOPMENT OF INFRASTRUCTURE FACILITY/PROJECT. THE SAME HAS BEEN THE POSITION IN THE GIVEN CASE AS WELL. SO, DEDUCTI ON U/S 80IA(4) IS ALSO AVAILABLE TO THIS ASSESSEE WHICH HAS UNDERTAKE N WORK OF A MERE 'DEVELOPER'. RATHER, THE STATUTORY PROVISION A S CONTAINED IN SECTION 80IA WHICH PROVIDES FOR DEDUCTION OF INFRAS TRUCTURE FACILITY NO WAY PROVIDES THAT ENTIRE INFRASTRUCTURE FACILITY PROJECT HAS TO BE DEVELOPED BY ONE ENTERPRISE. THUS, AS PER SECTION 8 0IA THE ASSESSEE SHOULD DEVELOP THE INFRASTRUCTURE FACILITY AS PER THE AGREEMENT WITH THE CENTRAL/STATE GOVERNMENT/LOCAL A UTHORITY. ENTERING INTO A LAWFUL AGREEMENT AND THEREBY BECOMI NG SHOULD, IN NO WAY BE A BAR TO THE ONE BEING A 'DEVELOPER'. IN THIS REGARD, AS WE HAVE ALREADY STATED, THE DECISION OF ACIT VS BHA RAT UDYOG LTD, 118 ITD 336 AND PATEL ENGINEERING LTD VS DY. CIT, 8 4 TTJ 646, ARE RELEVANT. AS PER CIRCULAR NO. 4/2010[F.NO. 178/14/2 010-ITA-I] DATED 18.5.2010, WIDENING OF EXISTING ROADS CONSTIT UTES CREATION OF NEW INFRASTRUCTURE FACILITY FOR THE PURPOSE OF S ECTION 80IA(4)(I) . THE ASSESSEE IS NOT REQUIRED TO DEVELOP THE ENTIR E ROAD IN ORDER TO QUALIFY FOR DEDUCTION U/S 80IA AS HAS BEEN HELD BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS ABG HEAVY I NDUSTRIES LTD, 322 ITR 323. THE NEWLY INSERTED EXPLANATION 2 TO SE CTION 80IA VIDE FINANCE ACT, 2007, DOES NOT APPLY TO A WORKS C ONTRACT ENTERED INTO BY THE GOVERNMENT AND THE ENTERPRISE. IT APPLI ES TO A WORK CONTRACT ENTERED INTO BETWEEN THE ENTERPRISE AND OT HER PARTY 'THE SUB-CONTRACTOR'. THE AMENDMENT AIMS AT DENYING DEDU CTION TO THE SUB CONTRACTOR WHO EXECUTES A WORK CONTRACT WITH TH E ENTERPRISE AS HELD BY THE ITAT, JAIPUR 'A' BENCH IN THE CASE O F OM METAL INFRA PROJECTS LTD VS CIT-I, JAIPUR, IN I.T.A. NO. 722 & 723/JP/2008 DATED 31.12.2008. THE RELIANCE BY THE LD. CIT(A) ON THE DECISION OF ITAT, CHENNAI BENCH IN THE CASE OF ACIT VS INDWELL LIANINGS PVT. LTD, 313 ITR(AT) 118, HAS BEEN ENLARGED IN ITS FIND ING BY THE ITAT, MUMBAI 'F' BENCH IN ITS DECISION RENDERED IN THE CA SE OF ACIT VS BHARAT UDYOG LTD , BY HOLDING THAT SUCH A DEDUCTION IS ONLY TO BE DENIED TO A SUB-CONTRACTOR AND NOT A MINI CONTRACTO R. SIMILAR VIEW HAS BEEN TAKEN BY THE ITAT CHENNAI BENCH IN THE CAS E OF ACIT VS SMT. C. RAJINI (SUPRA) IN WHICH BOTH OF US CONSTITU TED THE BENCH. IN THIS DECISION THE DEFINITION AND DIFFERENCE BETW EEN WORKS CONTRACTOR AND A DEVELOPER HAS BEEN EXAMINED IN DET AIL. THE MAIN THRUST OF THE DECISION IS THAT A DEVELOPER NEED NOT BE THE OWNER OF THE LAND ON WHICH DEVELOPMENT IS MADE. ALTHOUGH THA T DECISION WAS RENDERED IN THE CONTEXT OF A DEVELOPER OF BUILD INGS AND THE DEDUCTION WAS IN RESPECT OF 80IB(10), BUT THE DEFIN ITION OF 'DEVELOPER' GIVEN IN THAT CASE IS ALSO RELEVANT FOR THIS PURPOSE. MOREOVER, WE ARE IN AGREEMENT THAT IN INCENTIVE PRO VISIONS, THE CONSTRUCTION SHOULD BE LIBERALLY GIVEN AS HELD BY T HE HON'BLE SUPREME COURT RENDERED IN THE CASE OF BAJAJ TEMPO L TD VS CIT, ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 15 196 ITR 188. THUS, WHEN THE ASSESSEE MAKES INVESTME NT AND HIMSELF EXECUTES DEVELOPMENT WORK AND CARRIES OUT C IVIL WORKS, HE IS ELIGIBLE FOR TAX BENEFIT U/S 80IA OF THE ACT. AC CORDINGLY, WITH THE FOREGOING DISCUSSION, WE HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IA(4) OF THE ACT, AND THEREFORE, WE ORDER TO DELETE THE ADDITION MADE IN THIS RESPECT.' 6. THEREFORE, BY FOLLOWING THE ABOVE ARGUMENTS AND REASONING, WE CONFIRM THE FINDINGS OF THE LD. CIT(A) AND DO NOT F IND ANY VALID MERIT IN THE REVENUE'S APPEAL. ACCORDINGLY, THE APP EAL STANDS DISMISSED. 39. IN VIEW OF THE ABOVE DISCUSSION, WE ARE INCLINE D TO PARTLY ALLOW THE GROUND RELATING TO CLAIMING OF DEDUCTION U/S. 80IA. OF THE ACT IN ALL THESE APPEALS. 4. HOWEVER, IT WAS BROUGHT TO OUR NOTICE BY THE L EARNED COUNSEL FOR THE ASSESSEE THAT WHILE PASSING THE CONSEQUENTI AL ORDER IN PURSUANCE OF THE ABOVE ORDER OF THE TRIBUNAL, ONCE AGAIN THE ASSESSING OFFICER ADOPTED AN APPROACH CONTRARY TO THE DIRECTIONS OF T HE TRIBUNAL. IN THAT VIEW OF THE MATTER, IT IS SUBMITTED THAT THE TRIBUN AL SHOULD GIVE A CLEAR CUT FINDING ON THE ISSUE IN THIS APPEAL, WHILE DECI DING THE ISSUE RELATING TO DEDUCTION UNDER S.80IA OF THE ACT. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, RELIED ON THE ORDER OF THE CIT(A) ON HIS ISSUE. 6. ON CAREFUL CONSIDERATION OF THE RIVAL SU BMISSIONS IN THE LIGHT OF THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE S HOULD SUCCEED ON THIS GROUND. A CAREFUL READING OF THE ORDER OF THIS TR IBUNAL DATED 16.3.2012, RELEVANT PORTION OF WHICH HAS BEEN EXTRACTED ABOVE, CLEARLY INDICATES THAT THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THAT BEING SO, THE ASSESSING OFFICER IS NOT ENTITLED, IN THE C ONSEQUENTIAL PROCEEDINGS, THE SCOPE OF WHICH IS CONFINED TO GIVING EFFECT TO THE ORDER OF THE TRIBUNAL, TO SIT IN JUDGMENT OVER THE VIEW TAKEN BY THE TRIBU NAL ON THE ISSUE IN DISPUTE, AND IF AT ALL THERE IS ANY GRIEVANCE ON AC COUNT OF THE FINDING GIVEN BY THE TRIBUNAL ON THE POINT AT DISPUTE, IT S HOULD PURSUE THE OTHER APPELLATE LEGAL REMEDIES PROVIDED IN THE STATUTE IT SELF, BUT CANNOT DILUTE ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 16 THE DIRECTION OF THE TRIBUNAL. ACCORDINGLY, RESPEC TFULLY FOLLOWING THE SAID ORDER OF THE TRIBUNAL DATED 16.3.2012, WE ARE INCLI NED TO HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER S.80IA OF T HE ACT. WE HOLD ACCORDINGLY AND ALLOW THE GROUND OF THE ASSESSEE ON THIS ISSUE. 7. THE NEXT GROUND OF THE REVENUE IN THIS APPEAL, CONTAINED IN GROUNDS NO.3 AND 4 RELATES DISALLOWANCE OF INTEREST OF RS.19,8,604 MADE BY THE ASSESSING OFFICER. 8. WE HEARD BOTH SIDES AND PERUSED THE IMPUGNED ORDERS OF THE REVENUE AUTHORITIES. IT IS THE CASE OF THE ASSESSE E THAT THE INVESTMENTS WERE MADE FORM OUT OF ASSESSEES OWN FUNDS AND NOT FROM OUT OF THE BORROWED FUNDS AND SOME OF THE INVESTMENTS WERE MAD E DURING THE COURSE OF ASSESSEES BUSINESS ACTIVITY ITSELF AND T O PROTECT AND PROMOTE ITS OWN BUSINESS INTERESTS. THERE IS NO DISPUTE THAT MONIES HAVE BEEN GIVEN TO THE OTHER PARTIES FOR BUSINESS PURPOSES. IT IS A COMMON TRADE PRACTICE TO GIVE ADVANCES TO THE PARTIES TO CARRY ON THE WOR K ON BEHALF OF THE ASSESSEE. WHEN THE ASSESSEE HAS NOT CHARGED INTE REST ON SUCH LOANS GIVEN, THE CIT(A) IS NOT ENTITLED TO WORK OUT ANY N OTIONAL INTEREST AND MAKE ANY DISALLOWANCE/ADDITION TO THAT EXTENT. WE ARE SUPPORTED IN THIS BEHALF BY THE DECISION OF THE APEX COURT IN THE CAS E OF S.A. BUILDERS V/S. CIT(288 ITR 1). WE ACCORDINGLY, SET ASIDE THE IMPU GNED ORDERS OF THE CIT(A), AND DELETE THE ADDITION OF RS.19,48,604 MAD E BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) IN THIS BEHALF. THIS GROUND OF THE ASSESSEE IS ALLOWED. 9. THE NEXT GRIEVANCE OF THE ASSESSEE IN THIS APP EAL RELATES TO INTEREST CHARGED UNDER S.234B AND 234C OF THE ACT. ASSESSEE HAS MADE ELABORATE SUBMISSIONS ON THIS ISSUE AND ALSO FILED WRITTEN SUBMISSIONS. THE LEARNED DEPARTMENTAL REPRESENTATIVE TOO OPPOSED THE CONTENTIONS OF THE ASSESSEE ON THIS ISSUE. BE AS IT MAY, THIS GRO UND IS CONSEQUENTIAL AND ITA NO.414/HYD/12 SUSHEE HITECH CONSTRUCTIONS P. LTD., HYDERABAD 17 NEEDS NO SEPARATE ADJUDICATION. THE ASSESSING OFFI CER MAY CONSIDER THE OBJECTIONS OF THE ASSESSEE TO THE CHARGING OF INTER EST UNDER S.234B AND 234C OF THE ACT, AND RECOMPUTE THE SAME, IF NEED BE , WHILE GIVING EFFECT TO THIS ORDER. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 17.06.2013 SD/- (SAKTIJIT DEY) SD/- (CHANDRA POOJARI) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 17 TH JUNE, 2013 COPY FORWARDED TO: 1. SUSHEE HITECH CONSTRUCTIONS P. LTD. (NOW KNOWN AS S USHEE INFRA P. LTD.), C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2. INCOME TAX OFFICER, WARD 3(2), HYDERABAD 3. 4. 5. COMMISSIONER OF INCOME-TAX(APPEALS) IV HYDERABAD COMMISSIONER OF INCOME-TAX III HYDERABAD THE DEPARTMENTAL REPRESENTATIVE, ITAT HYDERABAD B.V.S.