M/s. KCL BEL Tarmet (JV), RAJKOT-GUJARAT V. The Income Tax Officer,Ward-1(3), RAJKOT-GUJARAT

ITA 485/RJT/2014

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5751 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 11-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ITO WARD RAJKOT SHRI R M RI
• Keywords: Reopening of assessment; Rule of consistency; Retrospective amendment; Difference of opinion; Change of opinion; Reassessment proceedings; Set aside
• Section: 143(3); 80IA; 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER SL. NOS. ITA NO(S) ASSESSMENT YEAR (S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 192/RJT/2011 2005-06 ITO, WRD-1(3) RAJKOT M/S.KCL-BEL TARMAT (JV) AMIN MARG CORNER RAJKOT PAN: AAGFB 1834Q 2. 193/RJT/2011 2006-07 DO-REVENUE -DO- ASSESS EE 3. 214/RJT/2011 2008-09 THE DCIT CIRCLE-1 RAJKOT -DO-ASSESSEE 4. 485/RJT/2014 2009-10 -BY ASSESSEE ITO, WARD-1(3 ) RAJKOT ASSESSEE BY : SHRI R.M. RINDANI, AR REVENUE BY : SHRI PRAVENN VERMA, SR.DR / DATE OF HEARING 25/10/2018 / DATE OF PRONOUNCEMENT 03 /12/2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEALS HAVE BEEN FILED BY THE REVENU E, AND THE ASSESSEE ARE AGAINST THE SEPARATE ORDERS OF THE COM MISSIONER OF INCOME TAX (APPEALS)I, RAJKOT [CIT(A) IN SHORT] PASSED F OR ASSESSMENT YEARS (AYS) 2005-06, 2006-07 AND 2008-09 AND 2009-10 RESP ECTIVELY. 2. FIRST, WE TAKE UP ITA NO.192/RJT/2011 FOR AY 2005-0 6, APPEAL FILED BY THE REVENUE. 3. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 2 - 1. THE LD. CIT(A)-I, RAJKOT HAS ERRED IN LAW AND O N FACT OF THE CASE IN DELETING THE ADDITION MADE THE A.O. BY DISA LLOWING DEDUCTION U/S.80IA(4) OF RS.2,76,14,591/-. 2. ON THE FACTS OF THE CASE, LD. CIT(A) OUGHT TO H AVE UPHELD THE ASSESSMENT ORDER OF THE A.O., DATED 30/12/2010. 4. THE ASSESSEE HAS MADE AN APPLICATION UNDER R ULE 27 OF ITAT RULES VIDE LETTER DATED 27 TH OF JUNE 2013 CONTENDING THE VALIDITY OF THE REOPENING UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT'). THE RELEVANT CONTENTS OF THE APPLICATION ARE REPRODUCED AS UNDER: PRAYER UNDER RULE 27 OF THE INCOME-TAX APPELLATE T RIBUNAL RULES: THE RESPONDENT ABOVENAMED MOST RESPECTFULLY STATES THAT THE AFORESAID APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST ORDER OF THE FIRST APPELLATE AUTHORITY DATED 8-2-2011 ARISING OUT OF ORDERS U/S 147. BEFORE THE FIRST APPELLATE AUTHORITY, THE APPELLANT HAD RAISED A SPECIFIC GROUND OF APPEAL CHALLENGING THE RE-OPENING OF THE ASSESSM ENT U/S 148 OF THE ACT. DURING THE RE-ASSESSMENT PROCEEDINGS, THE RESPONDEN T OBJECTED TO THE ISSUE OF NOTICE U/S 148 FOR REASONS FURNISHED BY THE ASSESSI NG OFFICER. THE SAME WERE NEGATIVED BY THE ASSESSING OFFICER AND THE CLAIM FO R DEDUCTION OF INCOME U/S 80IA(4) OF THE ACT WHICH WAS ORIGINALLY ALLOWED IN ORDER PASSED U/S 143(3) OF THE ACT, WAS DISEILOWED BY WAY OF ORDER U/S 147 OF THE ACT. BEFORE THE FIRST APPELLATE AUTHORITY ALSO THE GROUN D RELATING TO CHALLENGE TO ISSUE OF NOTICE U/S 148 HAS BEEN DISCUSSED BY THE S AID AUTHORITY. HOWEVER, IN VIEW OF THE DECISION GIVEN ON MERITS OF THE CASE, T HE FIRST APPELLATE AUTHORITY HAS DISMISSED THE SAID GROUND WITHOUT ASSIGNING REA SONS FOR DISMISSAL EXCEPT STATING THAT THE SAID GROUND BECAME ACADEMIC. ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 3 - AS THE SAID GROUND RELATING TO REOPENING HAS BEEN D ISMISSED AND HELD AGAINST THE RESPONDENT, THE RESPONDENT BEGS TO RESORT TO TH E REMEDY GRANTED TO IT UNDER RULE 27 OF THE I.T.A.T. RULES WHEREIN IT IS PROVIDE D THAT THE RESPONDENT CAN DEFEND THE ORDER OF THE FIRST APPELLATE AUTHORITY I N RESPECT OF GROUNDS DECIDED AGAINST IT. IN VIEW OF ABOVE, THE RESPONDENT ABOVENAMED HEREBY PRAYS THAT THE ORDERS OF BOTH THE LOWER AUTHORITIES SUFFER FROM INFIRMITIES IN AS MUCH AS IN VIEW OF THE NATURE OF REASONS RECORDED PRIOR TO ISSUE OF NOTICE U/S 148, THE ACTION U/S 148 AMOUNTS TO CHANGE OF OPINION, WHICH IS NOT PERMISSI BLE IN LAW AND THEREFORE THE FIRST APPELLATE AUTHORITY ALSO ERRED IN DECIDIN G THE SAME AGAINST THE RESPONDENT, PARTICULARLY DESPITE THE OBJECTIONS TAK EN BY THE RESPONDENT AND DECIDED CASE LAW CITED VIDE OBJECTIONS TAKEN BEFORE THE ASSESSING OFFICER, WHICH ARE REPRODUCED IN THE RE-ASSESSMENT ORDER. MOREOVER , THE SAID ISSUE ARISES FROM THE MATERIAL ALREADY ON FACE OF THE RECORDS AN D BEING LEGAL IN NATURE, THE SAME MAY KINDLY BE ALLOWED TO BE AGITATED BY THE RE SPONDENT ALTHOUGH NO CROSS OBJECTIONS OR CROSS APPEAL HAVE BEEN FILED BY THE RESPONDENT. 5. THE LD. AR BEFORE US SUBMITTED THAT THE ISSU E RAISED IN THE APPLICATION AS DISCUSSED ABOVE WAS RAISED BEFORE TH E LD. CIT(A) BUT HE DID NOT ADJUDICATE THE SAME. THEREFORE THE ASSESSEE IS VERY MUCH ENTITLED TO RAISING THE ISSUE BY WAY OF AN APPLICATION UNDER RULE 27 OF ITAT RULES. 6. ON THE OTHER HAND THE LD. DR DID NOT RAISE ANY OBJECTION ON THE ADMISSION OF THE APPLICATION MADE BY THE ASSESSEE U NDER RULE 27 OF ITAT RULES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ORIGI NAL ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE ACT, BY THE AO. HOWEVER, SUBSEQUENTLY, THE AO HAS SELECTED THE CASE OF THE A SSESSEE UNDER SECTION ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 4 - 147 OF THE ACT ON ACCOUNT OF ESCAPEMENT OF INCOME. AS PER THE AO, THE ASSESSEE WAS NOT ENTITLED TO A DEDUCTION UNDER SECT ION 80IA(4) OF THE ACT, IN TERMS OF THE EXPLANATION INSERTED AFTER SUB-SECT ION 13 OF SECTION 80IA(4) OF THE ACT, BY THE FINANCE ACT 2009 WITH EF FECT FROM 01.04.2000. ACCORDINGLY, THE AO RECORDED THE REASON S FOR ESCAPEMENT OF INCOME AND ISSUED A NOTICE TO THE ASSESSEE UNDER SE CTION 148 OF THE ACT. THE REASON RECORDED BY THE AO FOR REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT READS AS UNDER: VIDE ABOVE REFERRED LETTER YOU HAVE REQUESTED THE UNDERSIGNED FOR DROPPING THE ASSESSMENT PROCEEDINGS U/S.148 ON THE BASIS OF JUDICIAL PRONOUNCEMENTS OF THE HONORABLE MUMBAI HIG H COURT IN THE CASE OF M/S.R.RALLIS INDIA LTD. VS. ACIT, MUMBA I WRIT PETITION NO.2514 (2009). IN THIS REGARD YOUR KIND ATTENTION IS INVITED TO TH IS OFFICE ORDER PROVIDING REASONS FOR REOPENING OF ASSESSMENT FOR T HE YEAR UNDER CONSIDERATION DATED 05/07/2010 WHEREIN THE REASONS FOR REOPENING THE ASSESSMENT PROCEEDINGS HAVE BEEN WELL DISCUSSED . HOWEVER, IT IS AGAIN INFORMED THAT THE ASSESSMENT HAS BEEN REOP ENED ON THE FOLLOWING REASONS: THE PROVISION OF LAW OUTLINED IN THE SECTION 80-IA( 4)(I) AS IT STOOD DURING THE PREVIOUS YEAR UNDER CONSIDERATION AND ON THE BASIS OF WHICH YOU HAVE CLAIMED DEDUCTION, READS AS UNDER: [DEDUCTION IN RESPECT OF PROFITS AND GAIN FROM INDU STRIAL UNDERTAKING OR ENTERPRISES ENGAGED IN INFRASTRUCTUR E DEVELOPMENT ETC. 80-IA (4) THIS SECTION APPLIES TO ANY ENTERPRISE CARRYING ON THE BUSINESS OF (I) DEVE LOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPER ATING AND ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 5 - MAINTAINING AND INFRASTRUCTURE FACILITY WHICH FULFI LS ALL THE FOLLOWING CONDITIONS.. (A) IT IS OWNED BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF SUCH COMPANIES OR BY AN AUTHORITY OR A BOARD OR A CORPORATION OR ANY OTHER BODY ESTABLISHED OR C ONSTITUTED UNDER ANY CENTRAL OR STATE ACT. (B) IT HAS ENTERED INTO AN AGREEMENT WITH THE CENTRAL GOVERNMENT OR A STATE, GOVERNMENT OR A LOCAL AUTHOR ITY OR ANY OTHER STATUTORY BODY FOR (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY. (C) IT HAS STARTED OR STARTS OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR AFTER THE 1 ST DAY OF APRIL, 1995; THE SAID AMENDMENT HAS BEEN FURTHER AMENDED BY WAY OF AN EXPLANATION AFTER SUB-SECTION (13) OF SEC. 80IA(4), WITH RETROSPECTIVE EFFECT FROM 01/04/2000, WHICH IS AS U NDER: FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT NOTHI NG 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 CONTR ACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNME NT) AND EXECUTED BY THE UNDERTAKING OR ENTERPRISE REFERRED TO IN SUB- SECTION (1). IN VIEW OF THE PROVISIONS OF THE ACT, IT IS EVIDENT THAT UNDERTAKING OR ENTERPRISE CARRYING OUT WORK AS PER WORK CONTRAC T AWARDED BY ANY PERSONS (INCLUDING CENTRAL OR STATE GOVERNMENT) SHALL NOT BE ELIGIBLE FOR CLAIMING DEDUCTION WITHIN THE MEANING OF SECTION 80IA(4) AND THE INCENTIVE OF TAX HOLIDAY WAS ONLY F OR SUCH ENTERPRISES WHICH ARE ENGAGED IN THE ACTIVITY OF DE VELOPING OR OPERATING THE INFRASTRUCTURE FACILITY. IN OTHER WO RDS, THE DEDUCTION WAS AVAILABLE ONLY FOR CONCERNS WHO WERE EITHER DEV ELOPER OR OPERATOR OR BOTH. IN VIEW OF THE AMENDMENT BY WAY OF AN EXPLANATION A FTER SUB- SECTION (13) OF SECTION 80IA(4) WITH RETROSPECTIVE EFFECT FROM 01/04/2000, THE ASSESSMENTS FOR THE YEAR UNDER CONS IDERATION HAS ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 6 - BEEN RIGHTLY OPENED AND YOUR REQUEST FOR DROPPING T HE SAME CANNOT BE CONSIDERED. 8. THE ASSESSEE BEFORE THE AO RAISED THE OBJEC TIONS FOR THE REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT BUT COULD NOT SUCCEED. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A) WH O DID NOT ADJUDICATE THE ISSUE OF REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT. THE RELEVANT EXTRACT OF THE LD. CIT(A) ORDER READS AS U NDER: 8. IN VIEW OF THE ABOVE DECISION ON MERITS OF THE CASE, THE GROUND RELATED TO REOPENING OF ASSESSMENT HAS BECOME PUREL Y ACADEMIC, AND NEEDS NO FURTHER ADJUDICATION. THE SAME IS, TH EREFORE, DISMISSED. 8.1. HOWEVER, THE LD. CIT(A) WAS PLEASED TO GRANT THE RELIEF TO THE ASSESSEE ON MERIT. THEREFORE THE ASSESSEE DID NOT P REFER ANY APPEAL TO THE ITAT. HOWEVER, THE REVENUE AGAINST THE ORDER OF LD. CIT(A) HAS FILED AN APPEAL BEFORE THE LD. ITAT. ACCORDINGLY, THE AS SESSEE APPLIED UNDER RULE 27 OF THE ITAT RULES CHALLENGING THE VALIDITY OF THE REASSESSMENT UNDER SECTION 147 OF THE ACT. 8.2. NOW THE CONTROVERSY ARISES WHETHER THE ASS ESSEE CAN CHALLENGE THE VALIDITY OF THE REASSESSMENT UNDER SECTION 147 OF T HE ACT BY WAY OF AN APPLICATION UNDER RULE 27 OF ITAT RULES. AT THIS JU NCTURE WE FIND IMPORTANT TO REFER TO THE RELEVANT PROVISIONS OF RU LE 27 OF ITAT RULES WHICH ARE REPRODUCED AS UNDER : ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 7 - RESPONDENT MAY SUPPORT THE ORDER ON ANY GROUNDS RULE 27:- THE RESPONDENT, THOUGH HE MAY NOT HAVE AP PEALED, MAY SUPPORT THE CONCLUSION ON AN ISSUE ARRIVED AT IN T HE IMPUGNED ORDER ON ANY OF THE GROUNDS ON THAT ISSUE, INCLUDIN G THE GROUNDS DECIDED AGAINST HIM. 8.3. ON PERUSAL OF THE ABOVE RULES, WE ARE OF TH E VIEW THAT THE ASSESSEE IS ENTITLED TO RAISE THE OBJECTIONS BEFORE ITAT BY WAY OF AN APPLICATION UNDER RULE 27 OF ITAT RULES. IN HOLDING SO, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SUN PHARMACEUTICALS INDUSTRIES LTD. VS. PCIT REPORTED IN 86 TAXMANN.COM 148 WHEREIN IT WAS HELD AS UNDER:- 8. RULE 27 OF THE RULES READS AS UNDER: 'RESPONDENT MAY SUPPORT ORDER ON GROUNDS DECIDED AG AINST HIM. 27. THE RESPONDENT, THOUGH HE MAY NOT HAVE APPEALED , MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GR OUNDS DECIDED AGAINST HIM.' 9. THIS RULE THUS PROVIDES THAT THE RESPONDENT, THOUG H HE MAY NOT HAVE APPEALED, MAY SUPPORT THE ORDER APPEALED AGAIN ST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. THIS RULE EMBODIES THE FUNDAMENTAL PRINCIPLE THAT THE PERSON, WHO MAY NOT HAVE BEEN AGGRIEVED BY AN ORDER OF THE LOWER AUTHORITY OR THE COURT AND HAS THEREFORE NOT FILED ANY APPEAL AGAINST SUCH ORDER, IS FREE TO DEFEND THE ORDER BEFORE THE APPELLATE FORUM ON ALL GROUNDS INCLUDING THE GROUND, WHICH MAY HAVE BEEN HELD AGAINST HIM BY THE LOWER AUTHORITY OR THE COURT, WHOSE ORDER IS OTHERWISE IN HIS FAVOUR. ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 8 - 10. THE CONTENTION OF THE COUNSEL FOR THE REVENUE WAS THAT THE ASSESSEE HAD TO FILE INDEPENDENT APPEALS OR CROSS-O BJECTIONS IN TERMS OF SECTION 253 (4) OF THE ACT TO ENABLE THE A SSESSEE TO RAISE THE GROUND OF VALIDITY OF THE NOTICES FOR REOPENING OF THE ASSESSMENTS SINCE THE SAID GROUND WAS HELD BY THE C OMMISSIONER (APPEALS) AGAINST THE ASSESSEE. FOR MULTIPLE REASON S, WE CANNOT ACCEPT THIS CONTENTION. AS NOTED, UNDER SUB-SECTION (1) OF SECTION 253, AN APPEAL CAN BE FILED BEFORE THE APPELLATE TR IBUNAL BY AN ASSESSEE BEING AGGRIEVED BY THE ORDER OF THE APPELL ATE COMMISSIONER. UNDER SUB-SECTION (2) OF SECTION 253, ONLY IF THE PRINCIPAL COMMISSIONER OR THE COMMISSIONER OBJECTS TO ANY ORDER PASSED BY THE APPELLATE COMMISSIONER, HE WOULD DIRE CT THE ASSESSING OFFICER TO FILE APPEAL BEFORE THE APPELLA TE TRIBUNAL. ESSENTIALLY THEREFORE, AN APPEAL BEFORE THE TRIBUNA L AGAINST THE ORDER OF APPELLATE COMMISSIONER WOULD LIE AGAINST A N ORDER WHICH IS ADVERSE TO THE APPELLANT. MAY BE, ON ONE OUT OF TWO GROUNDS IF THE APPEAL OF THE ASSESSEE IS ALLOWED BY THE APPELL ATE COMMISSIONER IN ITS ENTIRETY, HE CANNOT BE STATED T O BE A PERSON AGGRIEVED BY SUCH ORDER. HIS APPEAL UNDER SUB-SECTI ON (1) OF SECTION 253 WOULD NOT BE MAINTAINABLE. THE ASSESSEE CANNOT FILE A STANDALONE APPEAL CHALLENGING A FINDING OF THE APPE LLATE COMMISSIONER WHICH MAY BE AGAINST THE ASSESSEE AS L ONG AS THE APPELLATE ORDER OF THE COMMISSIONER IS ENTIRELY IN FAVOUR OF THE ASSESSEE AND NO PART OF THE APPEAL OF THE ASSESSEE' S CLAIM IS REJECTED. UNDER SUB-SECTION (4) OF SECTION 253, IT IS OPEN FOR A PERSON EITHER AN ASSESSING OFFICER OR, THE ASSESSEE , UPON RECEIPT OF A NOTICE OF THE APPEAL FILED BEFORE THE TRIBUNAL TO FILE CROSS- OBJECTION AGAINST ANY PART OF THE ORDER OF THE COMM ISSIONER (APPEALS) AND SUCH CROSS-OBJECTION WOULD BE DEALT W ITH BY THE TRIBUNAL AS IF IT WERE AN APPEAL PRESENTED WITHIN T HE TIME SPECIFIED. TWO THINGS THUS BECOME CLEAR. A CROSS-OB JECTION UNDER SECTION (4) OF SECTION 253 COULD BE DIRECTED AGAINS T ANY PART OF THE ORDER OF THE APPELLATE COMMISSIONER AND IF SO PRESE NTED, IT WOULD BE DISPOSED OF BY THE TRIBUNAL IN THE MANNER AN APP EAL WOULD BE DECIDED. IN OTHER WORDS, SUCH CROSS-OBJECTION WOULD HAVE INDEPENDENT EXISTENCE EVEN IF FOR SOME REASON, THE APPEAL OF THE OPPONENT DOES NOT SURVIVE. THE CROSS-OBJECTION COUL D BE FILED ONLY ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 9 - AGAINST ANY PART OF THE ORDER OF THE APPELLATE COMM ISSIONER AND NECESSARILY THEREFORE, THAT PART OF THE ORDER OF TH E COMMISSIONER (APPEALS) HAS TO BE ADVERSE TO THE PERSON RAISING T HE CROSS- OBJECTION. REJECTION OF A GROUND, AN ARGUMENT OR A CONTENTION WOULD NOT COME WITHIN THE EXPRESSION 'ANY PART OF T HE ORDER OF THE COMMISSIONER' IN CONTEXT OF WHICH, THE SAID PHRASE HAS BEEN USED IN SUB-SECTION (4) OF SECTION 253. 11. TO PUT THE CONTROVERSY BEYOND DOUBT, RULE 27 OF TH E RULES MAKES IT CLEAR THAT THE RESPONDENT IN APPEAL BEFORE THE TRIBUNAL EVEN WITHOUT FILING AN APPEAL CAN SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. IT CAN BE EASILY APPRECIATED THAT ALL PRAYERS IN THE APPEAL MAY BE A LLOWED BY THE COMMISSIONER (APPEALS), HOWEVER, SOME OF THE CONTEN TIONS OF THE APPELLANT MAY NOT HAVE APPEALED TO THE COMMISSIONER . WHEN SUCH AN ORDER OF THE COMMISSIONER IS AT LARGE BEFORE THE TRIBUNAL, THE RESPONDENT BEFORE THE TRIBUNAL WOULD BE ENTITLED TO DEFEND THE ORDER OF THE COMMISSIONER ON ALL GROUNDS INCLUDING ON GROUNDS HELD AGAINST HIM BY THE COMMISSIONER WITHOUT FILING AN INDEPENDENT APPEAL OR CROSS-OBJECTION. 12. RULE 27 OF THE RULES IS AKIN TO RULE 22 ORDER XLI OF THE CIVIL PROCEDURE CODE. SUB-RULE (1) PROVIDES THAT ANY RESP ONDENT, THOUGH HE MAY NOT HAVE APPEALED FROM ANY PART OF TH E DECREE, MAY NOT ONLY SUPPORT THE DECREE BUT MAY ALSO STATE THAT THE FINDING AGAINST HIM IN THE COURT BELOW IN RESPECT OF ANY IS SUE OUGHT TO HAVE BEEN DECIDED IN HIS FAVOUR; AND MAY ALSO TAKE ANY CROSS- OBJECTION TO THE DECREE WHICH HE COULD HAVE TAKEN B Y WAY OF AN APPEAL. IN CASE OF VIRDHACHALAM PILLAI V. CHALDEAN SYRIAN BANK LTD.AIR 1964 SC 1425 IN CONTEXT OF THE SAID RULE TH E SUPREME COURT OBSERVED AS UNDER: '32. LEARNED COUNSEL FOR THE APPELLANT RAISED A SHO RT PRELIMINARY OBJECTION THAT THE LEARNED JUDGES OF THE HIGH COURT HAVING CATEGORICALLY FOUND THAT THERE WAS AN ANTECEDENT DE BT WHICH WAS DISCHARGED BY THE SUIT-MORTGAGE LOAN ONLY TO THE EX TENT OF RS. 59,000/- AND ODD AND THERE BEING NO APPEAL BY THE B ANK AGAINST ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 10 - THE FINDING THAT THE BALANCE OF THE RS. 80,000/- HA D NOT GONE IN DISCHARGE OF AN ANTECEDENT DEBT, THE RESPONDENT WAS PRECLUDED FROM PUTTING FORWARD A CONTENTION THAT THE ENTIRE S UM OF RS. 80,000/- COVERED BY EXS. A AND B WENT FOR THE DISCH ARGE OF ANTECEDENT DEBTS. WE DO NOT SEE ANY SUBSTANCE IN TH IS OBJECTION, BECAUSE THE RESPONDENT IS ENTITLED TO CANVASS THE C ORRECTNESS OF FINDINGS AGAINST IT IN ORDER TO SUPPORT THE DECREE THAT HAS BEEN PASSED AGAINST THE APPELLANT.' 8.4. WE ALSO FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF DEEP CHAND KOTH ARI VS. CIT REPORTED IN 35 TAXMAN 223 WHEREIN HELD AS UNDER: IT WAS NOT IN DISPUTE THAT THE JURISDICTION OF THE ITO WAS DULY CHALLENGED BY THE ASSESSEE BEFORE THE ITO HIMSELF A ND ALSO IN THE MEMORANDUM OF APPEALS FILED BEFORE THE AAC. IT WAS NOT DISPUTED THAT THE AAC DID NOT TOUCH THIS POINT IN HIS COMMON ORDER DATED 17-3-1972 AND DECIDED THE APPEALS ON MERIT IN FAVOU R OF THE ASSESSEE. AS SUCH IT WOULD BE DEEMED THAT THE AAC D ECIDED THE POINT OF JURISDICTION AGAINST THE ASSESSEE. ADMITTE DLY, THE SAID POINT OF JURISDICTION WAS DULY RAISED BEFORE THE TR IBUNAL. RULE 27 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963, PROVIDES THAT THE RESPONDENT, THOUGH HE MAY NOT HAVE APPEALED, MA Y SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDE D AGAINST HIM. THUS, THE ASSESSEE WAS ENTITLED TO SUPPORT THE ORDE R OF THE AAC FOR NOT CLUBBING THE SAID TWO INCOMES ON THE SAID GROUN D OF LACK OF JURISDICTION. THEREFORE, THE TRIBUNAL WAS NOT JUSTIFIED IN NOT AL LOWING THE OBJECTIONS AS TO THE JURISDICTION OF THE ITO TO INI TIATE THE NOTICE AND AS TO THE VALIDITY OF THE PROCEEDINGS TAKEN IN PURSUANCE THEREOF, TO BE RAISED. IT IS WELL SETTLED LAW THAT THE OBJECTION REGARDING LACK OF JURISDICTION IS DECIDED FIRST. ON LY AFTER ITS DECISION HOLDING THAT THE COURT OR THE TRIBUNAL HAS JURISDICTION, OTHER QUESTIONS RELATING TO THE MERITS OF THE CASE ARISE FOR DECISION, ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 11 - OTHERWISE NOT. ACCORDINGLY, THE CASE WAS SENT BACK TO THE TRIBUNAL TO DECIDE THE POINT REGARDING LACK OF JURISDICTION . 8.5. IN VIEW OF THE ABOVE, WE ADMIT THE APPLICATI ON FILED BY THE ASSESSEE UNDER RULE 27 AND ACCORDINGLY PROCEED TO ADJUDICATE THE TECHNICAL GROUND OF APPEAL RAISED BY IT. THUS THE APPLICATION MADE B Y THE ASSESSEE UNDER RULE 27 OF ITAT RULES IS ADMITTED FOR THE PURPOSE O F ADJUDICATION. 8.6. THE ISSUE RAISED BY THE ASSESSEE IN ITS APP LICATION UNDER RULE 27 OF ITAT RULES IS THAT THE ORDER PASSED BY THE AO UNDER SECTION 147 OF THE ACT IS NOT SUSTAINABLE IN VIEW OF THE FACT THAT THE RE WAS NO ESCAPEMENT OF INCOME. 8.7. AT THE OUTSET THE LD. AR BEFORE US SUBMITT ED THAT THE REOPENING UNDER SECTION 147 OF THE ACT WAS DONE ON ACCOUNT OF A RETROSPECTIVE AMENDMENT INSERTED AS AN EXPLANATION AFTER SUBSECTI ON 13 OF SECTION 80IA(4) OF THE ACT. SUCH EXPLANATION WAS BROUGHT UN DER THE STATUTE BY THE FINANCE ACT 2009 HAVING RETROSPECTIVE EFFECT FR OM 01.04.2000. 8.8. THE LD. AR FURTHER SUBMITTED THAT IT IS WE LL-SETTLED LAW THAT REOPENING OF ASSESSMENT IS INVALID UNDER SECTION 14 7 OF THE ACT IF IT IS MADE ON THE GROUND OF RETROSPECTIVE AMENDMENT UNDER THE STATUTE. 8.9. ON THE OTHER HAND THE LD. DR VEHEMENTLY SU PPORTED THE ORDER OF THE AUTHORITIES BELOW. ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 12 - 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD. THERE WAS AN AMENDMENT UNDER T HE ACT BY THE FINANCE ACT 2009 WITH RETROSPECTIVE EFFECT FROM 01. 04.2000. ACCORDINGLY, THE AO WAS OF THE VIEW THAT THE ASSESS EE WHO IS ACTING AS A WORK CONTRACTOR IS NOT ENTITLED TO THE BENEFIT OF D EDUCTION UNDER SECTION 80IA(4) OF THE ACT. ACCORDINGLY, THE AO ON THE BASI S OF SUCH RETROSPECTIVE AMENDMENT REOPENED THE CASE OF THE AS SESSEE UNDER SECTION 147 OF THE ACT. THE REASON FOR THE REOPENING HAS AL READY BEEN DISCUSSED IN THE PRECEDING PARAGRAPH. 9.1. IT IS SETTLED LAW THAT REOPENING OF THE AS SESSMENT UNDER SECTION 147 OF THE ACT CANNOT BE DONE ON ACCOUNT OF RETROSPECTI VE AMENDMENT IN VIEW OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SADBHAV ENGINEERING LTD. VS. DCIT REPORTED IN 45 TA XMANN.COM 388 WHEREIN IT WAS HELD AS UNDER: IN THE PRESENT CASE, AS COULD BE NOTED FROM THE MA TERIAL ON RECORD, THE ASSESSING OFFICER ON A DETAILED SCRUTIN Y HAD EXPLAINED THE CLAIM MADE BY THE ASSESSING OFFICER UNDER SECTI ON 80-IA(4) OF THE ACT. THIS WAS ALSO CHALLENGED FURTHER BEFORE TH E COMMISSIONER (APPEALS) AND THE TRIBUNAL. THE SOLE QUESTION, THER EFORE, IS WHETHER THE REASSESSMENT PROCEEDINGS CAN BE INITIAT ED ONLY ON THE BASIS OF INSERTION OF EXPLANATION WHICH HAD BEEN SU BSTITUTED BY THE FINANCE (NO. 2) ACT, 2009 WITH RETROSPECTIVE EFFECT FROM 1-4-2000. SUCH EXPLANATION CLARIFIED THAT THE DEDUCTION UNDER SECTION 80-IA OF THE ACT WOULD NOT BE ADMISSIBLE IN THE CASE OF A N ASSESSEE CARRYING ON BUSINESS IN THE NATURE OF WORKS CONTRAC T. SUCH EXPLANATION HAVING HELD TO BE CLARIFICATORY IN NATU RE, THE RATIO LAID DOWN IN THE CASE OF ASSTT. CIT V. PARIKSHIT INDUSTR IES ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 13 - (P.) LTD. [2012] 25 TAXMANN.COM 301 (SC) WOULD APPLY. THE ASSESSING OFFICER INITIATED SUCH PROCEEDINGS OF REO PENING SOLELY ON SUCH GROUND OF INSERTION OF EXPLANATION AND, THEREF ORE, IT NEEDS TO BE HELD AS MERE CHANGE OF OPINION. HENCE, THE ASSUM PTION OF JURISDICTION ON THE ASSESSING OFFICER SHALL NEED TO BE INTERFERED BY WAY OF WRIT JURISDICTION. RESULTANTLY, ALL THE THREE PETITIONS DESERVE TO BE ALLOWED QUASHING THE IMPUGNED NOTICE ISSUED UNDER SECTION 148 OF THE ACT AND ALL CONSEQUENTIAL PROCEEDINGS EMANATING THEREFROM. RULE IS MADE ABSOLUTE. THERE SHALL BE, HOWEVER, NO ORDER AS TO C OSTS. 9. 2. THE PRINCIPLES LAID DOWN BY THE HONBLE G UJARAT HIGH COURT AS DISCUSSED ABOVE ARE SQUARELY APPLICABLE TO THE FACT S OF THE PRESENT CASE ON HAND. THEREFORE RESPECTFULLY FOLLOWING THE SAME WE ARE NOT INCLINED TO UPHOLD THE REASSESSMENT PROCEEDINGS UNDER SECTION 1 47 OF THE ACT. THUS WE HOLD THAT THE ORDER FRAMED UNDER SECTION 147 OF THE ACT IS NOT SUSTAINABLE IN THE GIVEN FACTS AND CIRCUMSTANCES. 9.3. THE ASSESSEE SUCCEEDS ON THE TECHNICAL GR OUND RAISED BY IT IN THE APPLICATION FILED UNDER RULE 27 OF ITAT RULES. THUS WE ARE NOT INCLINED TO DECIDE THE ISSUE ON THE GROUNDS RAISED BY THE REVEN UE ON MERIT. HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 14 - COMING TO ITA NO. 193/RJT/2011 FOR AY 2006-07 FILED BY THE REVENUE 11. REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A)-I, RAJKOT HAS ERRED IN LAW AND ON F ACT OF THE CASE IN DELETING THE ADDITION MADE THE A.O. BY DISA LLOWING DEDUCTION U/S.80IA(4) OF RS.2,71,57,932/-. 2. ON THE FACTS OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER OF THE A.O., DATED 30/12/2010. 12. AT THE OUTSET, WE NOTE THAT THE ISSUE RAISE D BY THE REVENUE IN GROUNDS OF APPEAL AND THE ISSUE RAISED BY THE ASSES SEE IN THE APPLICATION FILED UNDER RULE 27 OF ITAT RULES ARE IDENTICAL TO THE FACTS AS DISCUSSED ABOVE IN ITA NO. 192/RAJ/2011. THEREFORE WE ARE OF THE VIEW THAT THE ORDER FRAMED UNDER SECTION 147 OF THE ACT IS NOT SU STAINABLE AS DISCUSSED IN PARA NUMBER 9 TO 9.3 OF THIS ORDER. THUS THE GRO UND OF APPEAL OF THE REVENUE IS DISMISSED AND APPLICATION FILED BY THE A SSESSEE UNDER RULE 27 OF THE ITAT RULES IS ALLOWED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. NOW COMING TO ITA NO. 214/RJT/2011 FOR AY 2008-09 APPEAL FILED BY THE REVENUE 14. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 15 - 1) THE LEARNED CIT(A)-I, RAJKOT, HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION MADE ON ACCOUNT OF DISALLOWANCE O F DEDUCTION U/S.80IA(4) OF THE IT ACT. 2) ON LEGAL AND FACTUAL STATUS OF THE CASE, THE LEARNE D CIT(A), OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 3) IT IS, THEREFORE, PRAYED THAT THE FINDING GIVEN IN THE ORDER OF THE LD.CIT(A) MAY BE DISMISSED/DELETED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 15. THE ONLY ISSUE RAISED BY THE REVENUE IS THAT LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY THE AO FOR RS.34, 33,399/-UNDER SECTION 80IA(4) OF THE ACT. 16. THE ASSESSEE DURING THE YEAR HAS CLAIMED DED UCTION UNDER SECTION 80IA(4) OF THE ACT FOR RS. 34,33,399/- ONLY. HOWEVE R, THE AO WAS OF THE VIEW THAT THE ASSESSEE IS ACTING AS A WORKS CONTRAC TOR AND ACCORDINGLY HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTIO N UNDER SECTION 80IA(4) OF THE ACT ON THE BASIS OF EXPLANATION ADDED BY FIN ANCE ACT 2009 W.E.F 01.04.2000 AFTER SUB-SECTION 13 OF THE SECTION 80IA (4) OF THE ACT. THUS THE AO DISALLOWED THE DEDUCTION OF RS. 34,33,399/- AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 17. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFOR E THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE AO BY OBSERVIN G AS UNDER : 5. I HAVE CAREFULLY CONSIDERED THE ISSUE. IT IS TO BE POINTED OUT THAT, IN THE APPELLANTS OTHER GROUP CASES, ENTIRE ISSUE OF CLAIM U/S.80IA(4) WAS EXAMINED, AND IT WAS FOUND THAT ASSESSEE WAS ACTUAL LY A DEVELOPER OF INFRASTRUCTURE FACILITIES, AS IT HAD MADE HUGE INVE STMENT OF ITS OWN AS WELL ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 16 - AS OUT OF BORROWED FUNDS, AND HAD INVESTED THE SAME IN ALL KINDS OF RESOURCES FOR ITS BUSINESS VIZ. PLANT & MACHINERY, STRUCTURES AT SITE, TECHNICAL EXPERTISE ETC. THE APPELLANT ALSO POSSES SES ITS OWN TECHNICAL KNOWLEDGE OF DEVELOPMENT OF THESE PROJECTS. IN MA NY CASES, EVEN THE DESIGN OF THE PROJECT IS PREPARED BY THE APPELLANT AND SUBMITTED TO THE GOVERNMENT FOR APPROVAL. EVEN SUB-LETTING OF THE WO RK IS NOT PERMITTED, THEREFORE ENTIRE PLANNING OF ITS BUSINESS AS ALSO T HE WORK HAS BEEN DONE BY THE APPELLANT AND NOT BY THE GOVERNMENT. HOWEVER , IT IS NOTICED THAT MANY SIMILAR CASES WERE DECIDED BY THE LD: CIT(A), IN WHICH IT WAS HELD THAT SUCH ASSESSEES WERE NOT ENTITLED TO DEDUCTION U/S.80IA(4). HOWEVER, IN ALL THESE CASES, INCLUDING SOME GROUP CASES, THE MATTER WAS TAKEN UP BEFORE THE HON'BLE ITAT, RAJKOT BENCH, AND IN ALL T HE CASES, THE HON'BLE ITAT HAS HELD THAT SUCH TYPE OF ASSESSEES WERE ENTI TLED TO A DEDUCTION U/S.80IA(4). SUCH DECIDED CASES BY THE HON'BLE ITAT , RAJKOT BENCH ARE AS UNDER: - (1) M/S. TARMAT BEL (JV) VS. ITO, WARD. 1(4), RAJKOT ITA NO.1111/RJT/2010 - A.Y. 2007- 08 DATED 23.09.2 010 (2) M/S. KISHOR PROJECTS PVT. LTD. VS. DCLF, CIRCLE-1, RAJKOT ITA NO. 1119/RJT/2010 - A.Y. 2007- 08 DATED 27.09. 2010 (3) M/S. CLASSIC NETWORK PVT. LTD. VS. DCIT, CIRCLE-1, RAJKOT ITA NO. 1110/RJR/2010 - A.Y. 2007- 08 DATED 23.09. 2010 (4) M/S. KETAN CONSTRUCTION LTD. VS. DCIT, CI RCLE-1, RAJKOT ITA NO. 1107/RJT/2010 - A.Y. 2007- 08 DATED 23.09. 2010 (5) M/S. KCL BEL TARMAT JV. VS. ITO, WARD. 1(2 ), RAJKOT ITA NO. 1112/RJT/2010 - A.Y. 2007- 08 DATED 23.09. 2010 (6) M/S. BACKBONE ENTERPRISE LTD. VS. DCIT, CI RCLE-1, RAJKOT ITA NO. 1108/RJT/2010 - A.Y. 2007- 08 DATED 27.09. 2010 6. THE ISSUE IN QUESTION IS SQUARELY COVERED BY TH E DECISION OF THE HON'BLE ITAT, RAJKOT BENCH IN THE ABOVE CASES. THE HON'BLE ITAT, RAJKOT BENCH HAS, IN THE CASE OF M/S. KETAN CONSTRU CTION LTD. (IN ITA NO.LL07/RJT/2010), HELD AS UNDER :- '7. ................................................... .. THE MAIN ISSUE IN CONTROVERSY WHICH IS THE SUBJECT MATTER OF APPEAL B EFORE US IS, WHETHER THE CLAIM OF THE ASSESSEE-APPELLANT FOR DEDUCTION O F ITS PROFITS AND GAINS CAN BE SAID TO BE ADMISSIBLE IN LAW, IN VIEW OF THE SPECIFIC PROVISIONS OF ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 17 - SEC. 80-IA(4) READ WITH THE IMPUGNED EXPLANATION AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THE CASE. WHILE ANSWERIN G THIS QUESTION, IT WOULD FIRST BE RELEVANT AND APPROPRIATE FOR US TO E XAMINE THE PAST RECORDS OF ASSESSMENTS OF THE ASSESSEE AND OF OTHER SIMILAR CASES DEALT WITH BY US AND INVOLVING SIMILAR KINDS OF BUSINESSE S. IN THIS CONTEXT, WE FIND, AND THERE IS NO DISPUTE FROM EITHER SIDE IN THIS REGARD, THAT THE ISSUE REGARDING NATURE OF BUSINESS IN SUC H CASES CAME TO BE EXAMINED BY THIS BENCH IN VARIOUS CASES FOR VARIO US ASSESSMENT YEARS. IN I.T.A. NOS 837 & 838/R/2009 FOR A.YS, 2003-04 & 2004-05, IN I.T.A. NOS. 835 & 836/R/2009 FOR A.YS. 2003-04 & 2004-05 , IN I.T.A. NOS. 850 & 851 /R/2009 FOR A.Y, 2003-04 & 2004-05, ON THE ISSUE CONCERNING DEDUCTION U/S 80-IA(4) AND OTHER CONNECTED ISSUES, WE HAVE ALREADY UPHELD THE CLAIMS FOR DEDUCTION U /S 80-IA(4) OF THE ACT AFTER DULY EXAMINING THE NATURE OF BUSINESSES. BESIDES, IN I.T.A. NO. 168/R/08 FOR A.Y. 2004-05 AND IN I.T.A. NO. 1 45/R/08 FOR A.Y. 2003- 04, WE FIND THAT ASSESSMENTS WERE COMPLETED U/S 143 (3) OF THE ACT UNDER WHICH THE IMPUGNED DEDUCTION WAS GRANTED BUT THERE AFTER THE C.I.T. PASSED ORDERS U/S 263 OF THE ACT ON THE GROUND THAT THE ASSESSEES WERE CONTRACTORS AND NOT DEVELOPERS. AGAINST THE SAID OR DERS, APPEALS WERE FILED WHEREIN AFTER DULY EXAMINING THE NATURE OF BU SINESS OF THOSE ASSESSEES, WE HAVE GIVEN A FINDING THAT ALTHOUGH TH E ASSESSEES HAD ENTERED INTO AGREEMENTS WITH GOVT. FOR INFRASTRUCTU RE FACILITIES, THE SAME WERE IN THE NATURE OF DEVELOPMENT BY THE ASSESSEES WITHIN THE AMBIT OF INFRASTRUCTURE FACILITY, WHICH ASPECT WAS ALSO NOTE D FROM THE ACCOUNTS OF THE ASSESSEES AND THEREAFTER IT WAS HELD BY US T HAT THE ASSESSEES BEING DEVELOPERS, THEY WERE ENTITLED TO DEDUCTION U/S 80- 1A(4) OF THE ACT. IN THE CASE OF GUJARAT INDUSTRIAL DEVELOPMENT CORPORAT ION AND OTHERS 227 ITR 414 HAS CONSIDERED THE MEANING OF 'DEVELOPE R' AND HAS HELD THAT THE WORD 'DEVELOPMENT' SHOULD BE UNDERSTOOD IN ITS WIDER SENSE AND THAT DEVELOPMENT MEANS THE REALISATION OF POTEN TIALITY OF LAND OR TERRITORY BY BUILDING OR MINING, IN THIS CONTEXT TH EREFORE, BASED ON FACTS ON RECORD AND AFTER EXAMINING THE NATURE OF BUSINES S, IT WAS HELD THAT THE ASSESSEES WERE DEVELOPERS AND NOT ME RE CONTRACTORS CARRYING OUT WORKS CONTRACT ONLY. WE FIND THAT IN THE PRESE NT CASE BEFORE US THE FACTS RELATING TO NATURE OF BUSINESS ARE NOT SHOWN TO BE DIFFERENT THAN THOSE 'ALREADY EXAMINED BY US IN THE AFORESAID APPE ALS DECIDED BY US. THAT BEING THE CASE, EVEN IF THE IMPUGNED EXPLANATI ON IS TO BE CONSIDERED FOR THE YEAR UNDER PRESENT APPEAL WE FI ND THAT THE EXPLANATION CLEARLY REFERS TO THE BUSINESS IN THE N ATURE OF WORKS CONTRACT. THIS CLEARLY IMPLIES THAT THE EXPLANATION IS LIMITED IN ITS SCOPE ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 18 - AND AS THE NATURE OF BUSINESS OF THE PRESENT ASSESS EE, BOTH IN VIEW OF THE FACTS FOR THE YEAR UNDER APPEAL AS ALSO FOR THE VIE W ALREADY TAKEN BY US IN SIMILAR CASES FOR EARLIER YEARS CITED SUPR A, THE ASSESSEE BEING DEVELOPER OF INFRASTRUCTURE FACILITY, IN OUR CONSIDERED OPINION, THE DEDUCTION UNDER SUBSECTION (4). CANNOT BE DENIED ON THE GROUND OF SAID EXPLANATION. WHILE SO HOLDING, WE ARE CONSCIOU S OF THE FACT THAT THE SAID EXPLANATION WAS NOT ON THE STATUTE BOOK AT THE TIME OF PASSING OF OUR SAID ORDERS IN ABOVE-REFERRED ITAS BUT OUR FIND ING REGARDING NATURE OF BUSINESS OF THE RESPECTIVE ASSESSEES CONTINUES T O APPLY EVEN AFTER THE INSERTION OF THE SAID EXPLANATION. THE FACTUAL POSI TION REGARDING NATURE OF BUSINESS BEING SAME AS IN EARLIER YEARS OF THE V ERY SAME ASSESSEE AS ALSO IN SIMILAR OTHER CASERS BEFORE US, HAS NOT BEE N CONTROVERTED BEFORE US. HENCE, IN OUR VIEW, ALTHOUGH IT IS HELD THAT TH E PRINCIPLE OF RES JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS, AT THE SAME TIME, THE EQUALLY WELL-ESTABLISHED RULE OF CONSISTENCY ALSO CANNOT BE OVERLOOKED. IN THE CASE OF RADHASOAMI SATSANG VS C.I.T. 193 ITR 321 (SC) THE HON'BFE SUPREME COURT HAS LAID DOWN THE PRINCIPLE W HICH IS WELL ACCEPTED ALL ALONG THAT ABSENCE OF ANY MATERIAL CHA NGE, A DIFFERENT VIEW THAN THAT TAKEN IN EARLIER YEARS, COULD NOT BE TAKE N IN LATER YEARS. WE ARE OF THE OPINION THAT THIS PROPOSITION OF LAW REA D WITH THE RULE OF CONSISTENCY IN TAX PROCEEDINGS HAS BEEN APPLIED ALL THE MORE WHILE GRANTING VARIOUS DEDUCTIONS FROM TOTAL INCOME IN TH E LIGHT OF ANOTHER WELL RECOGNIZED PROPOSITION THAT ANY PROVISION GRAN TING REBATE OR BENEFIT TO THE ASSESSEE SHOULD BE LIBERALLY CONSTRU ED GENERALLY IN FAVOUR OF THE ASSESSEE. IF THE PRESENT CASE IS VIEWED IN T HE LIGHT OF THE AFORESAID PERSPECTIVES AND JUDICIAL PROPOSITIONS LAID DOWN BY THE HIGHEST COURT OF LAND, WE FIND THAT THE INTENTION BEHIND GRANTING SU CH DEDUCTIONS IS FOR CREATION OF INFRASTRUCTURE FACILITIES IN THE COUNTR Y AS A SPECIAL BENEFIT OR REBATE TO ELIGIBLE PERSONS AND THEREFORE EVEN IF TH ERE COULD BE MORE THAN ONE VIEW REGARDING THE PARTICULAR NATURE OF BU SINESS OF THE ASSESSEE, THE VIEW FAVOURABLE TO THE ASSESSEE CAN B E TAKEN. 8. THE C.I.T. D.R. RELIED UPON THE DECISION OF THE HON'BLE MUMBAI BENCH IN THE CASE CITED SUPRA. WE HAVE CAREFULLY PE RUSED THE SAID JUDGEMENT AND FROM THE FACTS NARRATED THEREIN, WE F IND THAT IN THAT CASE THE ASSESSEE NAMELY B. T. PATIL & SONS THEREIN IS S TATED TO HAVE BEEN EMPLOYED AS A SUB-CONTRACTOR BY M/S. PATEL ENGINEER ING CO. TO CARRY OUT CIVIL WORK AND THAT A PORTION OF THE CONTRACT W AS ASSIGNED TO THAT ASSESSEE WHO CARRIED OUT THE ASSIGNED WORK IN THE C APACITY OF A SUB- CONTRACTOR. IN THIS CONTEXT, WE FIND THAT IN THE PR ESENT CASE BEFORE US, IT ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 19 - IS NOBODY'S CASE THAT THE APPELLANT IS A SUB-CONTRA CTOR. THE APPELLANT IS STATED TO BE THE PERSON WHO ENTERED INTO THE CONTRA CT WITH THE COVT. IN RESPECT OF INFRASTRUCTURE FACILITY AND DIRECTLY WAS INVOLVED IN EXECUTING THE SAME. WE FIND FORCE IN THE ARGUMENT OF THE A.R. BEFORE US THAT ENTERING INTO A CONTRACT AND THAT TOO WITH THE GOVT . ONLY IS A PRE- CONDITION U/S 80-IA(4) AND HENCE MERELY BECAUSE THE RE IS A CONTRACT BETWEEN THE GOVT. AND THE ASSESSEE, THAT DOES NOT M AKE THE ASSESSEE A CONTRACTOR FOR THE PURPOSE OF A WORKS CONTRACT ONLY . ANY PERSON CARRYING ON BUSINESS MAY BE REQUIRED TO CARRY OUT S OME WORK OR THE OTHER IN THE COURSE OF PURSUING ITS OVERALL BUSINES S OBJECTIVES. BUT THAT DOES NOT MEAN THAT SUCH A PERSON DOES NOT OR CANNOT CARRY OUT' SOMETHING MORE THAN SUCH WORK ONLY. IN THE PRESENT CASE, WE HAVE ALREADY HELD THAT ALTHOUGH THE APPELLANT ENTERED IN TO A CONTRACT WITH THE GOVT, THE CONTRACT IS PART OF THE PRIMARY CONDITION OF SEC.8O-IA(4) AND FURTHER THE NATURE OF WORK CARRIED OUT SHOWS THAT T HE APPELLANT NOT ONLY DIRECTLY (AND NOT INDIRECTLY) CARRIED OUT WORK AS P ER THE CONTRACT BUT IT EMPLOYED VARIOUS RESOURCES OF ITS OWN BY WAY OF MAC HINERIES, TECHNICAL KNOWLEDGE, TECHNICAL AND OTHER MANPOWER, MATERIALS ETC. AND ALSO FUNDED THE SAME OUT OF ITS OWN CAPITAL AND BORROWIN GS. THE APPELLANT WAS REQUIRED TO FURNISH GUARANTEES INCLUDING FREE M AINTENANCE OF THE INFRASTRUCTURE FACILITIES. ALL THESE FACTORS COMBIN ED CLEARLY GO TO SHOW THAT THE APPELLANT ALSO ASSUMED CONSIDERABLE RISK I N THE CAPACITY OF A BUSINESSMAN AND THE SUCH TASKS AS UNDERTAKEN, ALTHO UGH UNDER A CONTRACT AS MANDATED BY THE SECTION, WOULD REQUIRE SKILLS OF PLANNING OF WORK, EMPLOYING TECHNICAL KNOW-HOW TO EXECUTE THE W ORK AND TO FACE THE CONSEQUENCES OF ATTENDANT RISKS. WE FIND THAT T HE RISKS ARE UPON THE ASSESSEE AND NOT UPON THE GOVT. THESE ELEMENTS ARE GENERALLY MISSING IN THE CASE OF A SUB-CONTRACTOR. HERE, THE APPELLAN T IS DIRECTLY ENGAGED IN PERFORMING ITS FUNCTIONS FURTHER, IN THE CASE OF OM METALS INFRAPROJECTS LTD. (SUPRA), IT IS HELD THAT IF IT I S THE ASSESSEE MOBILIZING PEOPLE, PLANTS, TECHNICAL EXPERTISE ETC., THE ASSES SEE CAN BE SAID TO BE A DEVELOPER AND THAT ! THE ASSESSEE CANNOT BE DENIED DEDUCTION FROM THE PROFITS OF DEVELOPING THE INFRASTRUCTURE FACILITY T HOUGH IT MAY NOT OPERATE OR MAINTAIN THE SAME, PARTICULARLY IN VIEW OF THE INSERTION OF THE WORD 'OR' IN SEC. 80-IA(4). 9. CONSIDERING THE TOTALITY OF THE FACTS ON RECORD AS ALSO THE DEVELOPMENT OF LAW CONCERNING THE GRANTING OF DEDUC TIONS FROM GROSS TOTAL INCOME, WE ARE OF THE CONSIDERED VIEW THAT TH E APPELLANT IS ENTITLED ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 20 - TO DEDUCTION U/S.80-IA(4) OF THE ACT AS IT HAS BEEN FOUND TO HAVE FULFILLED ALL CONDITIONS OF ELIGIBILITY...................... ...........' THE HON'BLE ITAT, RAJKOT BENCH, THEREFORE, HELD THA T THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IA(4) OF THE ACT. 7. THE CASE OF THE APPELLANT IS IDENTICAL. IN THE P RESENT CASE ALSO, THOUGH THE APPELLANT ENTERED INTO A CONTRACT WITH GOVERNME NT, OR SEMI- GOVERNMENT AUTHORITIES, BUT SUCH A CONTRACT IS A PA RT OF THE PRIMARY CONDITION MENTIONED IN SECTION 80IA(4), AND FURTHER , THE NATURE OF WORK CARRIED OUT BY THE APPELLANT SHOWS THAT THE APPELLA NT NOT ONLY DIRECTLY CARRIED OUT WORK 'AS PER THE ALLOTTED JOB, BUT IT A LSO EMPLOYED VARIOUS RESOURCES OF ITS OWN BY WAY OF MACHINERIES, TECHNIC AL KNOWLEDGE, MANPOWER, MATERIAL ETC. AND ALSO FUNDED THE SAME OU T OF IT OWN CAPITAL AND BORROWINGS. THE APPELLANT WAS REQUIRED TO FURNI SH GUARANTEES, INCLUDING FREE MAINTENANCE OF INFRASTRUCTURE FACILI TIES. ALL THESE FACTORS COMBINED CLEARLY SHOW THAT THE APPELLANT ASSUMED CO NSIDERABLE RISK IN THE CAPACITY OF A BUSINESSMAN, AND THUS, ALL THE FA CTORS MENTIONED IN THE ABOVE APPELLATE ORDER OF THE HON'BLE ITAT, RAJKOT B ENCH SQUARELY APPLIES TO THE APPELLANT'S CASE ALSO. THEREFORE, RE SPECTIVELY FOLLOWING THE ABOVE DECISION OF THE HON'BLE ITAT, RAJKOT BENCH, I N GROUP CASES, AS WELL AS IN ASSESSEE'S OWN CASE FOR AY 07-08 IT IS H ELD THAT THE APPELLANT IS ENTITLED TO A DEDUCTION U/S.80IA(4). THE AO IS DIRE CTED TO ALLOW THE SAME IN A.Y. 2008-09 AS WELL. 18. BEING AGGRIEVED BY THE ORDER OF THE LD. CI T(A) REVENUE IS IN APPEAL BEFORE US. BOTH THE PARTIES BEFORE US RELIED ON THE ORDER OF THE AUTHORITIES BELOW AS FAVORABLE TO THEM. 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND P ERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE NOTE THAT TH E ITAT IN THE OWN CASE OF THE ASSESSEE IN ITA NO. 1112/RJT/2010 PERTAINING TO THE ASSESSMENT ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 21 - YEAR 2007-08 VIDE ORDER DATED 23.09.2010 DECIDED TH E ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDER: 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS PUT FORTH BEFORE US BY BOTH THE SIDES. WE HAVE ALSO PERUSED T HE ORDERS OF LOWER AUTHORITIES AND THE CASE LAW CITED BEFORE US ALONGWITH THE MATERIAL ON RECORD. THE MAIN ISSUE IN CONTROVERSY W HICH IS THE SUBJECT MATTER OF APPEAL BEFORE US IS, WHETHER THE CLAIM OF THE ASSESSEE-APPELLANT FOR DEDUCTION OF ITS PROFITS AND GAINS CAN BE SAID TO BE ADMISSIBLE IN LAW, IN VIEW OF THE SPECIF IC PROVISIONS OF SEC. 80-IA(4) READ WITH THE IMPUGNED EXPLANATION AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THE CASE. WHILE ANSW ERING THIS QUESTION, IT WOULD FIRST BE RELEVANT AND APPROPRIAT E FOR US TO EXAMINE THE PAST RECORDS OF ASSESSMENTS OF THE ASSE SSEE AND OF OTHER SIMILAR CASES DEALT WITH BY US AND INVOLVING SIMILAR KINDS OF BUSINESSES. IN THIS CONTEXT, WE FIND, AND THERE IS NO DISPUTE FROM EITHER SIDE IN THIS REGARD, THAT THE ISSUE REGARDIN G NATURE OF BUSINESS IN SUCH 'CASES CAME TO BE EXAMINED BY THIS BENCH IN VARIOUS FOR VARIOUS ASSESSMENT YEARS. IN I.T.A. NOS . 837 & 838/R/2009 FOR A.YS. 2003-04 & 2004-05, IN IT.A. NO S. 835 & 836/R/2009 FOR A.YS. 2003-04 & 2004-05, IN I.T.A.NO S.850 & 851/R/2009 FOR A.Y. 2003-04 & 2004-05, ON THE ISSUE CONCERNING DEDUCTION U/S.80-IA(4) AND OTHER CONNECTED ISSUES, WE HAVE ALREADY UPHELD THE CLAIMS FOR DEDUCTION IA(4) OF TH E ACT AFTER DULY EXAMINING THE NATURE OF BUSINESSES. BESIDES, IN I.T .A.NO. 168/R/08 FOR A.Y. 2004-05 AND IN I.T.A. NO. 145/R/08 FOR A.Y . 2003-04, WE FIND THAT THE ASSESSMENTS WERE COMPLETED U/S 143(3) OF THE ACT UNDER WHICH THE IMPUGNED DEDUCTION WAS GRANTED BUT THEREAFTER THE C.I.T. PASSED ORDERS U/S 263 OF THE ACT ON THE GROUND THAT THE ASSESSEES WERE CONTRACTORS AND NOT DEVELOPERS. AGAI NST THE SAID ORDERS,, APPEALS WERE FILED WHEREIN AFTER DULY EXAM INING THE NATURE OF BUSINESS OF THOSE ASSESSEES, WE HAVE GIVE N A FINDING THAT ALTHOUGH THE ASSESSEES HAD ENTERED INTO AGREEMENTS WITH GOVT. FOR INFRASTRUCTURE FACILITIES, THE SAME WERE IN THE NAT URE OF DEVELOPMENT BY THE ASSESSEES WITHIN THE AMBIT OF IN FRASTRUCTURE FACILITY, WHICH ASPECT WAS ALSO NOTED FROM THE ACCO UNTS OF THE ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 22 - ASSESSEES AND THEREAFTER IT WAS HELD BY US THAT THE ASSESSEES BEING DEVELOPERS, THEY WERE ENTITLED TO DEDUCTION U/S 80- LA(4) OF THE ACT. IN THE CASE OF GUJARAT INDUSTRIAL DEVELOPMENT CORPO RATION AND OTHERS 227 ITR 414 HAS CONSIDERED THE MEANING OF 'D EVELOPER' AND HAS HELD THAT THE WORD 'DEVELOPMENT' SHOULD BE UNDERSTOOD IN ITS WIDER SENSE AND THAT DEVELOPMENT MEANS THE REAL ISATION OF POTENTIALITY OF LAND OR TERRITORY BY BUILDING OR MI NING. IN THIS CONTEXT THEREFORE, BASED ON FACTS ON RECORD AND AFT ER EXAMINING THE NATURE OF BUSINESS, IT WAS HELD THAT THE ASSESS EES WERE DEVELOPERS AND NOT MERE CONTRACTORS CARRYING OUT WO RKS CONTRACT ONLY. WE FIND THAT IN THE PRESENT CASE BEFORE US, T HE FACTS RELATING TO NATURE OF BUSINESS ARE NOT SHOWN TO BE DIFFERENT THAN THOSE ALREADY EXAMINED BY US IN THE AFORESAID APPEALS DEC IDED BY US. THAT BEING THE CASE, EVEN IF THE IMPUGNED EXPLANATI ON IS TO BE CONSIDERED FOR THE YEAR UNDER PRESENT APPEAL, WE FI ND THAT THE EXPLANATION CLEARLY REFERS TO THE BUSINESS IN THE N ATURE OF WORKS CONTRACT. THIS CLEARLY IMPLIES THAT THE EXPLANATION IS LIMITED IN ITS SCOPE AND AS THE NATURE OF BUSINESS OF THE PRESENT ASSESSEE, BOTH IN VIEW OF THE FACTS FOR THE YEAR UNDER APPEAL AS ALSO FOR THE VIEW ALREADY TAKEN BY US IN SIMILAR CASES FOR EARLIER YE ARS CITED SUPRA, THE ASSESSEE BEING DEVELOPER OF INFRASTRUCTURE FACI LITY, IN OUR CONSIDERED OPINION, THE DEDUCTION UNDER SUBSECTION (4) CANNOT BE DENIED ON THE GROUND OF SAID EXPLANATION. WHILE SO HOLDING, WE ARE CONSCIOUS OF THE FACT THAT THE SAID EXPLANATION WAS NOT ON THE STATUTE BOOK AT THE TIME OF PASSING OF OUR SAID ORD ERS IN ABOVE- REFERRED ITAS BUT OUR FINDING REGARDING NATURE OF B USINESS OF THE RESPECTIVE ASSESSEES CONTINUES TO APPLY EVEN AFTER THE INSERTION OF THE SAID EXPLANATION. THE FACTUAL POSITION REGARDIN G NATURE OF BUSINESS BEING SAME AS IN EARLIER YEARS OF THE VERY SAME ASSESSEE AS ALSO IN SIMILAR OTHER CASERS BEFORE US, HAS NOT BEEN CONTROVERTED BEFORE US. HENCE, IN OUR VIEW, ALTHOUGH IT IS HELD THAT THE PRINCIPLE OF RES JUDICATA DOES NOT APPLY TO INCOME TAX PROCEE DINGS, AT THE SAME TIME, THE EQUALLY WELL-ESTABLISHED RULE OF CON SISTENCY ALSO CANNOT BE OVERLOOKED. IN THE CASE OF RADHASOAMI SA TSANG VS C.I.T. 193 ITR 321 (SC) THE HON'BLE SUPREME COURT H AS LAID DOWN THE PRINCIPLE WHICH IS WELL ACCEPTED ALL ALONG THAT ABSENCE OF ANY MATERIAL CHANGE, A DIFFERENT VIEW THAN THAT TAKEN I N EARLIER YEARS, ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 23 - COULD NOT BE TAKEN IN LATER YEARS. WE ARE OF THE OP INION THAT THIS PROPOSITION OF LAW READ WITH THE RULE OF CONSISTENC Y IN TAX PROCEEDINGS HAS BEEN APPLIED ALL THE MORE WHILE GR ANTING VARIOUS DEDUCTIONS FROM TOTAL INCOME IN THE - OF ANOTHER WE LL RECOGNIZED PROPOSITION THAT ANY PROVISION GRANTING REBATE OR B ENEFIT TO THE ASSESSEE SHOULD BE LIBERALLY CONSTRUED GENERALLY IN FAVOUR OF THE ASSESSEE. IF THE PRESENT CASE IS VIEWED IN THE LIGH T OF THE AFORESAID PERSPECTIVES AND JUDICIAL PROPOSITIONS LAID DOWN BY THE HIGHEST COURT OF LAND, WE FIND THAT THE INTENTION BEHIND GR ANTING SUCH DEDUCTIONS IS FOR CREATION OF INFRASTRUCTURE FACILI TIES IN THE COUNTRY AS A SPECIAL BENEFIT OR REBATE TO ELIGIBLE PERSONS AND THEREFORE EVEN IF THERE COULD BE MORE THAN ONE VIEW REGARDING THE PARTICULAR NATURE OF BUSINESS OF THE ASSESSEE, THE VIEW FAVOUR ABLE TO THE ASSESSEE CAN BE TAKEN. 8. THE C.I.T. D.R. RELIED UPON THE DECISION OF THE HON'BLE MUMBAI BENCH IN THE CASE CITED SUPRA. WE HAVE CAREF ULLY PERUSED THE SAID JUDGEMENT AND FROM THE FACTS NARRATED THER EIN, WE FIND THAT IN THAT CASE THE ASSESSEE NAMELY B. T. PATIL & SONS THEREIN IS STATED TO HAVE BEEN EMPLOYED AS A SUB-CONTRACTOR BY M/S. PATEL ENGINEERING CO. TO CARRY OUT CIVIL WORK AND THAT A PORTION OF THE CONTRACT WAS ASSIGNED TO THAT ASSESSEE WHO CARRIED OUT THE ASSIGNED WORK IN THE CAPACITY OF A SUB-CONTRACTOR. IN THIS CONTEXT, WE FIND THAT IN THE PRESENT CASE BEFORE US, IT IS N OBODY'S CASE THAT THE APPELLANT IS A SUB-CONTRACTOR. THE APPELLANT IS STATED TO BE THE PERSON WHO ENTERED INTO THE CONTRACT WITH THE GOVT. IN RESPECT OF INFRASTRUCTURE FACILITY AND DIRECTLY WAS INVOLVED I N EXECUTING THE SAME. WE FIND FORCE IN THE ARGUMENT OF THE A.R. BEF ORE US THAT ENTERING INTO A CONTRACT AND THAT TOO WITH THE GOVT . ONLY IS A PRE- CONDITION U/S 80-IA(4) AND HENCE MERELY BECAUSE THE RE IS A CONTRACT BETWEEN THE GOVT. AND THE ASSESSEE, THAT D OES NOT MAKE THE ASSESSEE A CONTRACTOR FOR THE PURPOSE OF A WORK S CONTRACT ONLY. ANY PERSON CARRYING ON BUSINESS MAY BE REQUIRED TO CARRY OUT SOME WORK OR THE OTHER IN THE COURSE OF PURSUING IT S OVERALL BUSINESS OBJECTIVES. BUT THAT DOES NOT MEAN THAT SU CH A PERSON DOES NOT OR CANNOT CARRY OUT SOMETHING MORE THAN SU CH WORK ONLY. IN THE PRESENT CASE, WE HAVE ALREADY HELD THAT ALTH OUGH THE ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 24 - APPELLANT INTO A CONTRACT WITH THE GOVT., THE CONTR ACT IS PART OF THE PRIMARY CONDITION OF SEC. 80-IA(4) AND ANTHER THE N ATURE OF WORK CARRIED OUT SHOWS THAT THE APPELLANT NOT ONLY INDI RECTLY (AND NOT INDIRECTLY) CARRIED OUT WORK AS PER THE CONTRACT BU T IT EMPLOYED VARIOUS SOURCES OF IT OWN BY WAY OF MACHINERIES, TE CHNICAL KNOWLEDGE, TECHNICAL AND OTHER MANPOWER, MATERIALS ETC. AND ALSO FUNDED THE SAME OUT OF ITS OWN CAPITAL AND BORROWIN GS. THE APPELLANT WAS REQUIRED TO FURNISH GUARANTEES INCLUD ING FREE MAINTENANCE OF THE INFRASTRUCTURE FACILITIES. ALL T HESE FACTORS COMBINED CLEARLY GO TO SHOW THAT THE APPELLANT ALSO ASSUMED CONSIDERABLE RISK IN THE CAPACITY OF A BUSINESSMAN AND THE SUCH TASKS AS UNDERTAKEN, ALTHOUGH UNDER A CONTRACT AS M ANDATED BY THE SECTION, WOULD REQUIRE SKILLS OF PLANNING OF WADE, EMPLOYING TECHNICAL KNOW-HOW TO EXECUTE THE WORK AND TO FACE THE CONSEQUENCES OF ATTENDANT RISKS. WE FIND THAT THE R ISKS ARE UPON THE ASSESSEE AND NOT UPON THE GOVT. THESE DEMENTS A RE GENERALLY MISSING IN THE CASE OF A SUB-CONTRACTOR. HERE, THE APPELLANT IS DIRECTLY ENGAGED IN PERFORMING ITS FUNCTIONS FURTHE R, IN THE CASE OF OM METALS INFRAPROJECTS LTD. (SUPRA), IT IS HELD TH AT IF IT IS THE ASSESSEE MOBILIZING PEOPLE, PLANTS, TECHNICAL EXPER TISE ETC., THE ASSESSEE CAN BE SAID TO BE A DEVELOPER AND THAT THE ASSESSEE CANNOT BE DENIED DEDUCTION FROM THE PROFITS OF DEVE LOPING THE INFRASTRUCTURE FACILITY THOUGH IT MAY NOT OPERATE O R MAINTAIN THE SAME, PARTICULARLY IN VIEW OF THE INSERTION OF THE WORD 'OR IN SEC. 80-IA(4). 9. CONSIDERING THE TOTALITY OF THE FACTS ON RECORD AS ALSO THE DEVELOPMENT OF LAW CONCERNING THE GRANTING OF DEDUC TION FROM GROSS TOTAL INCOME, WE ARE OF THE CONSIDERED VIEW T HAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S.80IA(4) OF T HE ACT AS IT HAS BEEN FOUND TO HAVE FULFILLED ALL CONDITIONS OF ELIG IBILITY. ACCORDINGLY, WE DIRECT THAT THE DEDUCTION AS CLAIME D BE ALLOWED. IN THE RESULT, BOTH THE GROUNDS OF APPEAL ARE ALLOW ED. 20. FROM THE ABOVE ORDER OF THE ITAT, WE NOT E THAT THE ISSUE HAS ALREADY BEEN DECIDED BY THE ITAT IN THE OWN CASE OF THE ASSESSEE AS ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 25 - DISCUSSED ABOVE. THEREFORE WE DO NOT FIND TO DEVIAT E FROM THE VIEW TAKEN BY THE ITAT IN THE OWN CASE OF THE ASSESSEE. THEREF ORE RESPECTFULLY FOLLOWING THE SAME WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE. HENCE THE APPEAL FILED BY TH E REVENUE IS DISMISSED. 21. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. NOW COMING TO THE ITA NO. 485/RJT/2014 FOR AY 2009- 10 APPEAL FILED BY THE ASSESSEE 22. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I , RAJKOT HAS ERRED IN DISMISSING THE APPEAL WHEREBY UPHOLDING TH E DISALLOWANCE OF CLAIM OF DEDUCTION U/S.80IA OF RS.1 3,14,246/- MADE BY THE ASSESSING OFFICER IS UNWARRANTED, UNJUS TIFIED AND BAD IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, RAJKOT HAS ERRED IN INITIATING THE PENAL PROCEEDINGS U/S.271(1 )(C) OF THE I T ACT IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, RAJKOT HAS ERRED IN CHARGING THE INTEREST U/S.234A, 234B, 234C & 234D IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 23. THE ONLY ISSUE RAISED BY THE ASSESSEE IS THA T LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO FOR RS. 13,14,246/-UNDER SECTION 80IA(4) OF THE ACT. ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 26 - 24. THE ASSESSEE DURING THE YEAR HAS CLAIMED DED UCTION UNDER SECTION 80IA(4) OF THE ACT FOR RS. 13,14,246/- ONLY. HOWEVE R, THE AO WAS OF THE VIEW THAT THE ASSESSEE IS ACTING AS A WORKS CONTRAC TOR AND ACCORDINGLY HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTIO N UNDER SECTION 80IA(4) OF THE ACT ON THE BASIS OF EXPLANATION ADDED BY FIN ANCE ACT 2009 W.E.F 01.04.2000 AFTER SUB-SECTION 13 OF THE SECTION 80IA (4). THUS THE AO DISALLOWED THE DEDUCTION OF RS. 13,14,246/- AND ADD ED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 25. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFO RE THE LD. CIT(A) WHO HAS CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER: 5.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND THE FINDING OF THE A.O. IN HIS ASSESSMENT ORDER. IT IS SEEN THAT THIS ISSUE HAS BEEN DECIDED BY THE HON'BLE GUJARAT HIGH COURT IN THE CA SE OF KATIRA CONSTRUCTION LTD. VS. UNION OF INDIA (2013) 352 ITR 513. THE HON 'BLE HIGH COURT HAS HELD AS UNDER:- 'IN THE PRESENT- CASE, THEREFORE, FROM BOTH THE ANG LES, NAMELY, WHETHER THE EXPLANATION AIMS TO EXPAND THE PREVAILING PROVI SION AND WHETHER BEING IN THE NATURE OF A TAX STATUTE, SUCH CHANGE C AN BE PERMITTED WITH RETROSPECTIVE EFFECT, IT WOULD BE CRUCIAL FOR US TO DISCERN THE TRUE EFFECT OF SUCH EXPLANATION. IN THIS CONTEXT, WE MAY RECALL THAT THE IMPUGNED EXPLANATION BELOW SUB-SECTION (13) TO SECTION 80IA STARTS WITH AN EXPRESSION 'FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT' AND PROVIDES THAT NOTHING CONTAINED IN THIS SECTION SHA LL APPLY TO IN RELATION TO A BUSINESS REFERRED TO IN SUBSECTION (4) WHICH I S IN THE NATURE OF A WORKS CONTRACT AWARDED BY ANY PERSON INCLUDING THE CENTRAL OR STATE GOVERNMENT AND EXECUTED BY THE UNDERTAKING OR ENTER PRISE REFERRED TO IN SUB-SECTION (1). THUS THE EXPLANATION IN QUESTIO N WAS INTRODUCED FOR THE REMOVAL OF DOUBTS AND IT DECLARED THAT NOTHING CONTAINING IN SUB- SECTION (4) WOULD APPLY TO A BUSINESS IN THE NATURE OF WORKS CONTRACT. WE MAY RECALL THAT SUB-SECTION (4) OF SECTION 801 A EVEN AFTER ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 27 - AMENDMENT OF 2002, ENVISAGED DEDUCTION IN CASE OF A NY ENTERPRISE CARRYING ON THE BUSINESS OF DEVELOPING OR OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRU CTURE FACILITY. THUS, THE LEGISLATURE BY WAY OF THE IMPUGNED AMENDMENT DI STINGUISHED BETWEEN THE CASES OF DEVELOPING/OPERATING AND MAINT AINING/DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILI TY FROM THE WORKS CONTRACT AWARDED BY ANY PERSON, BE IT THE CENTRAL O R THE STATE GOVERNMENT, EXECUTED BY THE UNDERTAKING OR ENTERPRI SE SEEKING SUCH AN EXEMPTION. THAT THERE IS AN INTRINSIC DIFFERENCE BE TWEEN DEVELOPING AN INFRASTRUCTURE FACILITY AND EXECUTING A WORKS CONTR ACT, IN OUR OPINION, CAN HARDLY BE DISPUTED............................. ....... ........... IN OUR, OPINION, WHAT THE EXPLANATION AIMS TO ACHIE VE IS TO CLARIFY THAT DEDUCTION UNDER SECTION 801 A(4) OF THE ACT WOULD N OT BE AVAILABLE IN CASE OF EXECUTION OF WORKS CONTRACT. THE FACT THAT SUCH INTERPRETATION OF THE EXISTING PROVISIONS OF SUB-SECTION (4) OF SECTI ON 801 A OF THE ACT, EVEN WITHOUT THE AID OF THE EXPLANATION WAS POSSIBL E, IN OUR OPINION, IS NOT DISPUTABLE. AS NOTED, SUB-SECTION (4) OF SECTIO N 80IA EVEN AFTER THE AMENDMENT IN THE YEAR 2002 ENVISAGED DEDUCTION IN C ASE OF DEVELOPING OR OPERATING AND MAINTAINING OR DEVELOPING, OPERATI NG AND MAINTAINING ANY INFRASTRUCTURE FACILITY. EVEN WITHOUT THE AID O F THE EXPLANATION, IT WAS POSSIBLE TO CONTEND THAT SUCH EXPRESSION DID NO T INCLUDE AN ENTERPRISE EXECUTING A WORKS CONTRACT. PARTICULARLY , BEARING IN MIND THE OBSERVATIONS MADE BY THIS COURT IN THE CASE OF RADH E DEVELOPERS (SUPRA), THERE WOULD CERTAINLY BE A DEMARCATION BET WEEN DEVELOPING THE FACILITY AND EXECUTION OF WORKS CONTRACT AWARDED BY AN AGENCY ENGAGED IN DEVELOPING SUCH FACILITY. ................................................... ................... WE, THEREFORE, NOTICE THAT FROM THE INCEPTION, DED UCTION WAS ENVISAGED FOR DEVELOPMENT OF INFRASTRUCTURE FACILITIES WITH P RIVATE PARTICIPATION. OF COURSE, POST 2002, CERTAIN RELAXATIONS WERE GRANTED AND IN ADDITION TO EXTENDING TAX HOLIDAY PERIOD, REQUIREMENT FOR CLAIMING SUCH DEDUCTION WAS SPLIT INTO DEVELOPING OR OPERA TING AND MAINTAINING OR DEVELOPING, OPERATING AND MA INTAINING INFRASTRUCTURE FACILITY. THE REVENUE COULD THEREFOR E, LEGITIMATELY CONTEND THAT NO SUCH DEDUCTION WAS ENVISAGED FOR ME RE EXECUTION OF WORKS CONTRACT. IF THIS WAS THE POSITION, IN OUR UN DERSTANDING, WHAT THE EXPLANATION, DID WAS TO CLARIFY A STATUTORY PROVISI ON WHICH WAS AT BEST POSSIBLE OF A CONFUSION. IF THAT BE SO, THE EXPLANA TION MUST BE SEEN AS ONE BEING IN THE NATURE OF PLAIN AND SIMPLE EXPLANA TION AND NOT EITHER ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 28 - ADDING OR SUBTRACTING ANYTHING TO THE EXISTING STAT UTORY PROVISION. WHEN WE HOLD THAT THE IMPUGNED EXPLANATION WAS PURELY EX PLANATORY IN NATURE AND DID NOT MEND THE EXISTING STATUTORY PROV ISIONS, THE QUESTION OF LEVYING ANY TAX WITH RETROSPECTIVE EFFECT WOULD NOT ARISE. IF WE AGREE WITH THE SUBMISSION OF THE COUNSEL FOR THE PETI TIONERS THAT SUCH EXPLANATION RESTRICTED OR AIMED TO RESTRICT THE PROVISIONS OF DEDUCTION, CERTAINLY A QUESTION OF REASONABLENESS I N THE CONTEXT OF RETROSPECTIVE OPERATION WOULD ARISE. IN THE PRESENT CASE, HOWEVER, WE HAVE COME TO THE CONCLUSION THAT THE EXPLANATION ON LY SUPPLIED CLARITY WHERE, AT BEST CONFUSION WAS POSSIBLE IN THE UNAMEN DED PROVISION. IN THAT VIEW OF THE MATTER, THIS CANNOT BE SEEN AS A R ETROSPECTIVE LEVY EVEN IF WE WERE TO ACCEPT THAT WITHDRAWAL OF A DEDUCTION WOULD AMOUNT TO AFRESH LEVY. ' 5.4 IN THIS LANDMARK DECISION, THE HON'BLE GUJA RAT HIGH COURT HAS LAID DOWN THE FOLLOWING PRINCIPLES :- 1. WHAT THE NEWLY INSERTED EXPLANATION BELOW SUB-SE CTION 13 TO S.8OIA AIMS TO ACHIEVE IS TO CLARIFY THAT DEDUCTION U/S.80 IA(4) OF THE ACT WOULD NOT BE AVAILABLE IN CASE OF EXECUTION OF WORKS CONT RACT. 2. THERE WOULD CERTAINLY BE A DEMARCATION BETWEEN T HE DEVELOPING THE FACILITY AND EXECUTION OF WORKS CONTRACT AWARDED BY AN AGENCY E DEVELOPING SUCH FACILITY. 3. THE EXPLANATION MUST BE SEEN AS ONE BEING IN THE NATURE OF PLAIN AND SIMPLE EXPLANATION AND NOT EITHER ADDING OR SUBTRAC TING ANYTHING TO THE 'TING STATUTORY PROVISION. 4. THE LEGISLATURE BY WAY OF IMPUGNED AMENDMENT HAS DISTINGUISHED BETWEEN THE CASES OF DEVELOPING/OPERATING AND MAINT AINING/DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILI TY FROM THE WORKS CONTRACT AWARDED BY ANY PERSON, BE IT THE CENTRAL O R STATE GOVERNMENT, EXECUTED BY THE UNDERTAKING OR ENTERPRISE SEEKING S UCH AN EXEMPTION. THERE IS AN INTRINSIC DIFFERENCE BETWEEN DEVELOPING AND INFRASTRUCTURE FACILITY AND EXECUTING A WORKS CONTRACT. IN THE PRESENT CASE, IT IS AN UNDISPUTED FACT THAT THE APPELLANT HAS BEEN AWARDED WORKS CONTRACT BY THE STATE GOVERNMENT. THE APPELLANT'S CONTENTION ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 29 - THAT BECAUSE OF THE INVESTMENT MADE AND THE CUMULAT IVE NATURE OF WORK CARRIED OUT BY HIM, HE IS A DEVELOPER AND HENCE ENTITLED FO R DEDUCTION U/S.80IA(4), HAS NO FORCE IN LIGHT OF THE PRINCIPLES LAID DOWN BY TH E HON'BLE GUJARAT HIGH COURT IN THE CASE OF KATIRA CONSTRUCTION (SUPRA). IN VIEW OF THE FINDINGS OF THE HON'BLE JURISDICTIONAL HIGH COURT, IT IS HELD THAT THE APPELLANT IS NOT ENTITLED FOR DEDUCTION U/S.80IA(4). IT IS ALSO NECESSARY TO MENTION THAT THIS DECISION WAS SUBSEQUENT TO THE DECISION OF THE HON'BLE ITAT, RAJ KOT BENCH OR THE DECISION OF THE CIT(A)-I, RAJKOT RELIED UPON BY THE APPELLAN T. THEREFORE, IN LIGHT OF THIS DECISION, THE FINDINGS GIVEN IN THE EARLIER DECISIO NS STAND NEGATED. THIS GROUND OF APPEAL IS THUS DISMISSED. 26. BEING AGGRIEVED BY THE ORDER OF THE LD. CI T(A), THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. AR BEFORE US SUBMITTED TH AT THE ORDER BY WHICH THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF THE DE DUCTION UNDER SECTION 80IA(4) OF THE ACT WAS DISTINGUISHABLE FROM THE FACTS OF THE ASSESSEE. 27. IN SUCH CASE, THE HONBLE GUJARAT HIGH COUR T HAS UPHELD THE VALIDITY OF EXPLANATION ADDED AFTER SUB-SECTION 13 OF SECTION 80IA(4) UNDER THE STATUTE BY FINANCE ACT 2009 WITH RETROSPE CTIVE EFFECT FROM 01.04.2000. THERE WAS NO QUESTION BEFORE THE HONBL E GUJARAT HIGH COURT WITH REGARD TO THE FACT WHETHER THE ASSESSEE IS ACTING AS A WORKS CONTRACTOR OR NOT. THEREFORE NO RELIANCE CAN BE PLA CED ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT AS DISCUSSED ABOVE IN TH E LIGHT OF GIVEN FACTS & CIRCUMSTANCES. 28. ON THE OTHER HAND THE LD. DR VEHEMENTLY SU PPORTED THE ORDER OF THE AUTHORITIES BELOW. ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 30 - 29. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE MATERIALS AVAILABLE ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS BEEN CLAIMING DEDUCTION UNDER SECTION 80IA(4) OF THE ACT WHICH WAS ALLOWED FOR ALL THE YEARS WHICH WAS ALSO UPHELD BY THE ITAT IN ITS OWN CASE. 29.1. HOWEVER, THE LD. CIT-A REVERSED HIS STAND FOR THE YEAR UNDER CONSIDERATION. THEREFORE THE ISSUE OF WHETHER THE A SSESSEE IS HIT BY THE EXPLANATION ADDED TO SECTION 80IA(4) OF THE ACT STA NDS DECIDED IN FAVOR OF THE ASSESSEE. 29.2. AT THIS JUNCTURE, WE ARE INCLINED TO RE PRODUCE THE RELEVANT EXTRACT OF THE JUDGMENT OF HONBLE GUJARAT HIGH COU RT IN THE CASE OF KATIRA CONSTRUCTION LTD. VS. UNION OF INDIA REPORTE D IN 352 ITR 513 WHEREIN THE HEAD NOTE READS AS UNDER: SECTION 80-IA OF THE INCOME-TAX ACT, 1961 - DEDUCTI ONS - PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS [CONSTITUTIO NAL VALIDITY] - WHETHER NO DEDUCTION WAS EVER ENVISAGED UNDER SECTI ON 80-IA FOR MERE EXECUTION OF WORKS CONTRACT AND EXPLANATION INSERTE D IN SECTION 80- IA(4) BY FINANCE (NO. 2) ACT OF 2009 WITH RETROSPEC TIVE EFFECT FROM 1-4- 2000, BY WHICH IT WAS DECLARED THAT DEDUCTION UNDER SECTION 80-IA WILL NOT BE AVAILABLE IN RESPECT OF MERE EXECUTION OF WO RKS CONTRACT, ONLY SUPPLIED CLARITY WHERE, AT BEST, CONFUSION WAS POSS IBLE IN UNAMENDED PROVISION - HELD, YES - WHETHER, THEREFORE, IT CANN OT BE SEEN AS A RETROSPECTIVE LEVY AND IS CONSTITUTIONALLY VALID - HELD, YES [IN FAVOUR OF REVENUE] 29.3. ON THE PERUSAL OF THE ABOVE JUDGMENT, WE NOTE THAT THE ISSUE WAS BEFORE THE HONBLE GUJARAT HIGH COURT WAS WITH REGA RD TO THE VALIDITY OF ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 31 - THE EXPLANATION ADDED AFTER SUB-SECTION13 TO SECTIO N 80IA(4) OF THE ACT. THERE WAS NO PRINCIPLE LAID DOWN BY THE ORDER OF TH E HONBLE GUJARAT HIGH COURT ABOUT THE ASSESSEE WHETHER HE WAS ACTING AS A WORKS CONTRACTOR OR DEVELOPER. THEREFORE IN OUR CONSIDERE D VIEW, NO RELIANCE CAN BE PLACED ON ABOVE JUDGMENT IN THE GIVEN FACTS AND CIRCUMSTANCES. 29.4. AS THERE IS NO AMBIGUITY THAT THE ISSUE WH ETHER THE ASSESSEE IS ACTING AS DEVELOPER OR WORKS CONTRACTOR HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR THE AS SESSMENT YEAR 2007-08 IN ITA NO. 1112/RJT/2010 AFTER CONSIDERING EXPLANAT ION ADDED IN SUB- SECTION 13 TO SECTION 80IA(4) OF THE ACT WHICH HAS ALREADY BEEN DISCUSSED IN THE PRECEDING PARAGRAPH. THEREFORE WE ARE OF THE VIEW THAT THE IMPUGNED ISSUE STANDS DECIDED IN FAVOR OF THE A SSESSEE. 29.5. IN ADDITION TO THE ABOVE, WE ALSO FIND THA T THE HONBLE JAMMU AND KASHMIR HIGH COURT IN THE SIMILAR FACT AND CIRCUMST ANCES HAVE DECIDED THE ISSUE IN FAVOR OF THE ASSESSEE IN THE CASE OF C IT VS. TRG INDUSTRIES PVT. LTD. REPORTED IN 76 TAXMANN.COM 105 WHEREIN IT WAS HELD AS UNDER: THE FIRST AND THE FOREMOST REQUIREMENT IS THAT THE ASSESSEE DEVELOPER SHOULD COME WITHIN THE AMBIT OF SECTION 80-IA(4)(I) (A)(B) WHICH THE ASSESSEE SATISFIES. THERE IS NO DISPUTE SINCE THERE IS A VALID CONTRACT AS REQUIRED. THE NEXT REQUIREMENT FOR THE BENEFIT TO B E EXTENDED UNDER THE SAID PROVISION IS THAT THE ENTERPRISE SHOULD PROVID E AN INFRASTRUCTURE FACILITY IN RELATION TO ESTABLISHING A ROAD, A BRID GE OR A RAIL SYSTEM OR AIRPORT. THERE IS NO SPECIFIC INTENDMENT AS TO THE NATURE OF WORK TO BE UNDERTAKEN AS IS EVIDENT FROM THE EXPLANATION. THER EFORE, THE WORD CONTAINED THEREIN HAS WIDE AMPLITUDE. THE ASSESSING OFFICER WAS NOT CORRECT IN PRESCRIBING CERTAIN LIMITS AND DESCRIBIN G THE NATURE OF WORK. IN OTHER WORDS, THE ASSESSING AUTHORITY ATTEMPTS TO DISSECT THE CONTRACT ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 32 - AND HOLD THAT IT DOES NOT JUSTIFY THE CLAIM FOR DED UCTION. THIS IS NOT INCLINED TO BE ACCEPTED IF THE REQUIREMENT OF SECTI ON 80-IA(4)(I) AND SECTION 80-IA(4)(I)(C) EXPLANATION IS SATISFIED, TH EN THE BENEFIT HAS TO FLOW. THE PROVISIONS OF SECTION 80-IA(4)(I) APPLIES TO AN ENTERPRISE CARRYING BUSINESS OF A DEVELOPER, WHO SATISFIES THE REQUIREM ENT OF SECTION 80- IA4(I)(A)(B) AND PROVIDES AN INFRASTRUCTURE FACILIT Y AS SET OUT IN THE EXPLANATION. IF THE PROVISION IS READ AS A WHOLE AND THE EXPLANA TION IS READ IN TERMS OF THE SAID PROVISION, IT WOULD BE AMPLY CLEAR FROM THE FACTS OF THE PRESENT CASE THAT THE ASSESSEE IN THIS CASE IS AN E NTERPRISE CARRYING ON THE BUSINESS OF A DEVELOPER HAS ENTERED INTO AN AGR EEMENT WITH THE CENTRAL GOVERNMENT OR THE STATE GOVERNMENT OR AN AU THORITY PRESCRIBED UNDER SECTION 80-IA(4)(I)(B) AND HAS PRO VIDED THE INFRASTRUCTURE FACILITY IN TERMS OF EXPLANATION TO SECTION 80-IA(4)(I)(C), THE DETAILS OF WHICH ARE SET OUT IN THE CHART. THE ASSESSING OFFICER HAS TRIED TO READ MORE INTO T HE PROVISION BY DESCRIBING WHAT IS THE NATURE OF WORK THAT WILL QUA LIFY FOR THE BENEFIT OF DEDUCTION UNDER SECTION 80-IA(4). THE AUTHORITY IS BOUND TO CONSIDER THE CLAIM AS IS CONTAINED IN THE PROVISIONS. IF CER TAIN WORKS ARE ACCEPTED AS INFRASTRUCTURE FACILITY AND OTHER WORKS DENIED AT THE WHIM OF ONE OR OTHER AUTHORITY IT WILL LEAD TO AN INCONG RUOUS RESULT WHEREBY DIFFERENT THE ASSESSING OFFICER WILL TAKE DIFFERENT YARDSTICKS. THE PROCEEDINGS WILL THEREBY BECOME ARBITRARY AND CAPRI CIOUS. THIS POSITION WILL BE CLEAR FROM THE STAND OF ONE ASSESSING OFFIC ER WHO HELD STAND THAT THE BENEFIT OF SECTION 80-IA(4) WILL BE AVAILA BLE TO THE ASSESSEE IN THE CASE OF CONSTRUCTION OF RAILWAY BRIDGES FOR THE ASSESSMENT YEAR 2004-05. THE ASSESSING OFFICER HAS TAKEN A DIFFEREN T STAND INSOFAR AS ASSESSMENT YEAR 2006-07 AND DENIED DEDUCTION. THE D EPARTMENT IS NOT ENTITLED TO TAKE INCONSISTENT STAND IN RESPECT OF E ACH ASSESSMENT YEAR ON THE SAME SET OF FACTS. SINCE THE REQUIREMENTS OF SECTION 80-IA(4) ARE SATI SFIED, THE ASSESSEE IS ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECTION 80-IA(4). THE RESPONDENT ASSESSEE IS ENTITLED TO THE DEDUCTION IN RESPECT OF ALL ASSESSMENT YEARS FOR WHICH DEDUCTION UNDER SECTION 80-IA(4) HAS BEEN DENIED. ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 33 - 29.6. BESIDES THE ABOVE, WE ALSO NOTE THAT THERE WAS NO CHANGE IN THE FACTS AND CIRCUMSTANCES IN THE CASE OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. THEREFORE IN OUR CONSIDERED VIEW, TH E PRINCIPLE OF CONSISTENCY WILL BE APPLIED IN THE CASE ON HAND AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG V. CIT REPORTED IN 193 ITR 321. WHERE IN IT WAS HELD AS UNDER: 13. WE ARE AWARE OF THE FACT THAT STRICTLY SPEAKING RE S JUDICATA DOES NOT APPLY TO INCOME-TAX PROCEEDINGS. AGAIN, EACH AS SESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT A PPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THRO UGH THE DIFFERENT ASSESS MENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. 14. ON THESE REASONINGS IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW OF THE MATTERAND IF THERE WAS NO CHANGE IT WAS IN SUPPORT OF THE ASSESSEEWE DO NOT THINK THE QUESTION SHOULD HAVE BEEN REOPENED AND CONTRARY TO WHAT HAD BEEN DECIDED BY THE COMMISSIONER IN THE EARLIER PROCEEDI NGS, A DIFFERENT AND CONTRADICTORY STAND SHOULD HAVE BEEN TAKEN. WE ARE, THEREFORE, OF THE VIEW THAT THESE APPEALS SHOULD BE ALLOWED AND THE Q UESTION SHOULD BE ANSWERED IN THE AFFIRMATIVE, NAMELY, THAT THE TRIBU NAL WAS JUSTIFIED IN HOLDING THAT THE INCOME DERIVED BY THE RADHASOAMI S ATSANG WAS ENTITLED TO EXEMPTION UNDER SECTIONS 11 AND 12. 29.7. IN VIEW OF ABOVE, WE HOLD THAT THE ASSESS EE IS VERY MUCH ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. ACC ORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT-A AND DIRECT THE AO TO DEL ETE THE ADDITION MADE ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 34 - BY HIM BY MAKING THE DISALLOWANCE UNDER SECTION 80I A(4) OF THE ACT. THUS, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOW ED. 30. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 31. IN THE COMBINED RESULT, ALL THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 03 /12/2018 SD/- SD/- ( RAJPAL YADAV ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 03 /12/2018 .. ,... / T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' ( / CONCERNED CIT 4. ( ( ) / THE CIT(A)-I, RAJKOT 5. ,-.'&' , &' , /DR,ITAT,RAJKOT 6. .:;< / GUARD FILE. / BY ORDER, #,' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, / ITAT, RAJKOT ITA NOS.192, 193 & 194/RJT/2011 (BY ASSESSEE) & ITA NO.485/RJT/2014 (BY REVENUE) M/S.KCL BEL TARMET (JV) VS. ITO/DCIT AYS 2005-06 , 2006-07, 2008-09 & 2009-10 RESPECTIVELY - 35 - 1. DATE OF DICTATION .. (WORD PROCESSED BY HONBLE AM IN HIS COMPUTER) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.11.2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.10.12.2018 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.12.2018 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER