ASST CIT CIR 3, THANE V. NCC SMC JV, THANE

ITA 7078/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1154 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR

Judgement Text

ITA NO. 7078/M/2017 NCC SMC JVA.Y. 2 009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND PAWAN SINGH, JUDICIAL MEMBER ./ I.T.A. NO. 7078/MUM/2014 ( / ASSESSMENT YEAR: 2009-10) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-3, ROOM NO. 02, 6 TH FLOOR, ASHAR IT PARK, B-WING, WAGLE INDL. ESTATE, THANE (W)-400604 VS M/S NCC SMC JV 101, AKURTI SMC, L.B.S. MARG, KHOPAT-400601 ./ ./ PAN/GIR NO. AAEFN0093N (REVENUE) (ASSESSEE) / REVENUE BY : SHRI. SUMAN KUMAR (D R) / ASSESSEE BY : SHRI. NEELKANTH KHANDELWAL (AR) / DATE OF HEARING : 27/04/2017 / DATE OF PRONOUNCEMENT : 27 /04/2017 / O R D E R PER PAWAN SINGH, JUDICIAL MEMBER THIS APPEAL UNDER SECTION 253 OF INCOME-TAX IS DIR ECTED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-II, MUMBAI DATED 21.08. 2014 FOR ASSESSMENT YEAR 2009-10, THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT(A)-I, THANE HAS NOT APPRECIATED THE FACTS AND D ELETED THE ADDITION MADE U/S 80IA (4), ITA NO. 7078/M/2017 NCC SMC JVA.Y. 2 009-10 2 2. THE APPELLANT PRAYS THE ORDER OF THE LD. CIT(A)- I THANE, MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALT ER ANY GROUND/GROUNDS, WHICH MAY BE NECESSARY. 2. AT THE VERY OUTSET OF THE PROCEEDINGS THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE GROUNDS OF APPEAL RAISED BY THE REVENUE IS COVERED IN FAVOUR OF ASSESSEE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 IN ITA NO. 7398/M/2011 DATED 25.06.2014. THE LD. DR OF THE REVENUE NOT DIS PUTED THE CASE OF THE ASSESSEE. WE HAVE SEEN THAT THE ASSESSEE HAS RAISED THE SIMILAR GROUNDS OF APPEAL IN THE APPEAL FOR A.Y. 2008-09 AND THE TRIBUNAL WHI LE FOLLOWING THE ASSESSEES OWN CASE FOR A.Y. 2007-08 IN ITA NO. 7885/M/2010 DA TED 23.06.2014 PASSED THE FOLLOWING ORDER: - 5. SO FAR AS IT RELATES TO THE ISSUE RAISED BY THE ASSESSEE IN GROUND NO. 1(I) &(II) WE FOUND THAT IN ASSESSEES OWN CASE FOR A.Y 2007-08 VIDE ORDER DATED 20/06/2004 IN ITA NO.7885/MUM/2010 WE HAVE HELD THA T ASSESSEE IS ENTITLED TO GET DEDUCTION U/S 80IA(4) OF THE ACT. ACCORDINGL Y, FOLLOWING THE ORDER OF THE TRIBUNAL IN WHICH BOTH OF US ARE PARTY, WE DIRE CT THE AO TO ALLOW DEDUCTION U/S 80IA TO THE ASSESSEE. THE RELEVANT PO RTION OF THE SAID ORDER IS REPRODUCED BELOW: 10. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTE NTIONS HAVE CAREFULLY BEEN CONSIDERED. WE HAVE CAREFULLY GONE THROUGH THE AO F OR A.Y 2004-05 WHICH IS THE BASE YEAR FOR WHICH THE ASSESSEE IS CLAIMING TH AT IT IS ENTITLED TO GET DEDUCTION U/S 80IA(4). THE FIRST AND FOREMOST OBJECTIONS OF T HE AO IS THAT ASSESSEE, WHILE EXECUTING THE PROJECT, HAD ACTED IN THE CAPACITY OF A CONTRACTOR, THEREFORE, THE DEDUCTION CANNOT BE ALLOWED TO THE ASSESSEE AS PRE- REQUISITE OF THE SECTION TO ENABLE THE ASSESSEE TO CLAIM DEDUCTION IS THAT HE S HOULD BE A DEVELOPER. 10.1 THE SECOND CONTENTION OF AO IS THAT ASSESSEE H AS ONLY BUILT SOME PART OF THE PROJECT AND IT HAS NEITHER OPERATED OR MAINTAINED T HE INFRASTRUCTURE PROJECT WHICH IS ALSO A CONDITION PRECEDENT TO GRANT DEDUCTION U/ S 80IA(4). THE AO HAS REJECTED THE CONTENTION OF THE ASSESSEE THAT ITS CASE IS SQU ARELY COVERED BY DECISION OF ITAT IN THE CASE OF PATEL ENGINEERING LTD. (SUPRA0. AS AGAINST SUCH CASE OF THE AO LD. CIT(A) HAS FOLLOWED MAINLY THE DECISION OF I TAT IN THE CASE OF PATEL; ENGINEERING LTD. (SUPRA) AND HAS ALLOWED RELIEF TO THE ASSESSEE. WE HAVE TO EXAMINE THAT WHETHER OR NOT ASSESSEE IS ENTITLED TO GET DEDUCTIONS 80IA(4) IN THE ITA NO. 7078/M/2017 NCC SMC JVA.Y. 2 009-10 3 LIGHT OF AFOREMENTIONED OBJECTION OF THE AO AND PLE A OF THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT AO HAS COMMITTED AN ERROR IN HOLDING THAT ASSESSEE HAS ACTED AS A CONTRACTOR IN PLACE OF THE CLAIM OF THE ASSESSEE THAT IT HAS WORKED AS A DEVELOPER OF THE INFRASTRUCTURE PROJECT. FOR RAISIN G SUCH CONTENTION THE ASSESSEE HAS PLACED RELIANCE NOT ONLY ON THE DECISION IN THE CASE OF PATEL ENGINEERING LTD. (SUPRA) BUT ALSO ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRIES LTD. (SUPRA). IT MAY BE MENTIO NED HERE THAT AO HAS PASSED THE IMPUGNED ASSESSMENT ORDER FOR A.Y 2004-0 5 ON 31/3/2006 WHEN THE BENEFIT OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S ABG HEAVY INDUSTRIES LTD. WAS NOT AVAILABLE. THE ASSES SEE IN THAT CASE DID NOT DEVELOP, OPERATE OR MAINTAIN THE ENTIRE PORT BUT ON LY PART BUT ONLY PART OF THE FUNCTION OF THE PORT WAS DEVELOPED AND MAINTAINED B Y THE ASSESSEE. LD. A.O. IN THAT CASE WAS OF THE VIEW THAT THE ASSESSEE MERELY ENGAGED IN THE BUSINESS OF SUPPLYING, INSTALLING, TESTING, COMMISSIONING AND M AINTAINING CRANES AT THE PORT AND WAS NOT IN THE BUSINESS OF DEVELOPING, MAINTAIN ING AND OPERATING OF PORT. THIS CONTENTION OF THE ASSESSEE IS ALSO RECORDED IN PARA-7 OF THE DECISION WHICH HAS ALREADY BEEN REPRODUCED IN THE ABOVE PART OF TH IS ORDER. (PARA-7) 10.2 WHILE ADJUDICATING THE AFOREMENTIONED CONTENTI ON OF THE REVENUE THEIR LORDSHIPS IN PARA-16 HAVE OBSERVED THAT SUCH SUBMIS SION CANNOT BE ACCEPTED. THE EXPRESSION DEVELOPMENT HAS NOT BEEN ARTIFICIA LLY DEFINED FOR THE PURPOSE OF SECTION 80IA(4) OF THE ACT MUST, THEREFORE RECEI VED ITS ORDINARY AND NATURAL MEANING. UNDER THE TERMS OF THE CONTRACT BETWEEN TH E ASSESSEE AND JNPT THE ASSESSEE UNDERTOOK AN OBLIGATION TO SUPPLY, INSTALL ING, TESTING, COMMISSIONING AND MAINTENANCE OF CONTAINER HANDLING EQUIPMENTS NA MELY THE CRANES IN QUESTION. THEIR LORDSHIPS IN PARA-17 HAVE OBSERVED THAT THE OBLIGATIONS WHICH HAVE BEEN ASSUMED BY THE ASSESSEE UNDER THE TERMS O F THE CONTRACT AREOBLIGATIONS INVOLVING THE DEVELOPMENT OF AN INFRASTRUCTURE FACI LITY. SECTION 80IA(4) OF THE ACT ESSENTIALLY CONTEMPLATED A DEDUCTION IN A SITUA TION, WHERE AN ENTERPRISE CARRIED ON A BUSINESS OF DEVELOPING, MAINTAINING AN D OPERATING INFRASTRUCTURE,FACILITY. A PORT WAS DEFINED TO INCL UDE WITHIN THE PURVIEW OF THEEXPRESSION INFRASTRUCTURE FACILITY. THE OBLIGA TIONS WHICH THE ASSESSEE ASSUMED UNDER THE TERMS OF THE CONTRACT WERE NOT ME RELY FOR SUPPLY AND INSTALLATION OF THE CRANES BUT INVOLVED A CONTINUOU S OBLIGATION FROM THE SUPPLY OF THE CRANES TO THE INSTALLATION TESTING, COMMISSIONI NG, OPERATION AND MAINTENANCE OF CRANES FOR A TERM OF 10 YEARS, AFTER WHICH THE E RA RIGS WERE TO VEST IN JNPT FREE OF COST. THE ASSESSEE DID NOT HAVE TO DEVELOP THE ENTIRE PORT IN ORDER TO QUALIFY FOR DEDUCTION UNDER SECTION 80IA(4). PARLIA MENT DID NOT LEGISLATE A CONDITION IMPOSSIBLE OF COMPLIANCE. 10.3 IF THE FACTS OF THE PRESENT CASE ARE TO BE EXA MINED IN THE LIGHT OF AFOREMENTIONED DECISION OF HON'BLE BOMBAY HIGH COURT, THEN IT CAN BE SAID THAT FOR CLAIMING DEDUCTION UNDER SECTION 80IA(4), IT IS NOT NECESSAR Y FOR THE ASSESSEE TO DEVELOP THE ENTIRE PROJECT IN ORDER TO QUALIFY FOR A DEDUCT ION UNDER SECTION 80IA(4). IF THE PROVISIONS ARE SO CONSTRUED THEN IT WILL BE A CONDI TION IMPOSSIBLE OF COMPLIANCE BECAUSE OF THE MAGNITUDE OF THE ENTIRE PROJECT. FOR QUALIFYING DEDUCTION UNDER SECTION 80IA(4) WHAT WOULD BE NECESSARY WILL BE THA T THE WORK CARRIED ON BY THE ASSESSEE MUST BE AN INTEGRAL PART OF THE PROJECT AN D IF IT IS SO, THEN IT CANNOT BE SAID THAT ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UN DER SECTION. 80IA(4) FOR THE ITA NO. 7078/M/2017 NCC SMC JVA.Y. 2 009-10 4 REASON THAT THE ASSESSEE ON ITS OWN DID NOT DEVELOP AN INFRASTRUCTURE PROJECT. THEREFORE, OBSERVATIONS OF THE AO THAT ASSESSEE DID NOT DEVELOP AN INFRASTRUCTURE PROJECT AND ONLY PART OF THE WORK WAS CARRIED OUT C ANNOT DISENTITLE THE ASSESSEE TO CLAIM THE DEDUCTION, 10.4 THE NATURE OF WORKS CARRIED OUT BY THE ASSESSE E REGARDING THE PROJECT HAVE BEEN STATED IN PARA-4 OF THE ASSESSMENT ORDER FOR A.Y.20 04-05. IT INTERALIA. INCLUDE MANUFACTURING, SUPPLYING, LOWERING, LAYING, JOINTIN G, TESTING AND COMMISSIONING OF 2200 MM DIAMETER MS PUMPING MAIN WITH CEMENT MOR TAR. IN-LINING & OUT- COATING FROM CLEAR WATER RESERVOIR AT GODAKONDALU T O MBR AT GUNGAL AND SIMILAR ACTIVITIES WERE CARRIED OUT IN RESPECT OF OTHER PLA CES WHICH HAVE BEEN SPECIFIED BY THE AO. THE ACTIVITY OF THE ASSESSEE IS NOT LIMI TED ONLY TO CONSTRUCTION OF THE PROJECT BUT AS PER THE TENDER THE ASSESSEE HAD TO S UBMIT HANK GUARANTEE FOR COMPLETION OF THE CONTRACT AND AS PER CLAUSE-88 OF THE CONTRACT THE ASSESSEE IS ALSO LIABLE FOR LIQUIDATED DAMAGES AND THE MAXIMUM AMOUNT FOR PENALTY HAS BEEN PRESCRIBED WHICH IS NOT TO EXCEED 5% OF THE CONTRAC T VALUE. THERE IS ALSO DESCRIPTION OF DEFECT LIABILITY PERIOD IN DAUSE-89 WHICH IS THE LIABILITY OF THE ASSESSEE UNDER THE CONTRACT FOR 24 MONTHS FROM THE DATE OF SUCCESSFUL COMPLETION OF THE WORK AND TAKEN OVER BY VISAKHAPATNAM MUNICIP AL CORPORATION. KEEPING IN VIEW THE ENTIRETY OF FACTS AND AFOREMENTIONED DE CISION OF HONBLE BOMBAY HIGH COURT, IT CANNOT BE SAID THAT ASSESSEE DID NOT ACT IN THE CAPACITY OF DEVELOPER AND IT HAS ALREADY BEEN MENTIONED THAT TO BE ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IA(4) IT IS NOT NECESSARY THAT ENTIRE INFRASTRUCTURE PROJECT SHOULD BE DEVELOPED BY THE ASSESSEE. 10.5 NOW THE NEXT QUESTION WILL BE THAT WHETHER TO CLAIM DEDUCTION UNDER SECTION 80IA(4) IT IS NECESSARY FOR AN ASSESSEE NOT ONLY TO DEVELOP THE PROJECT BUT ALSO TO OPERATE AND MAINTAIN THE INFRASTRUCTURE FACILITY. T HIS ISSUE IS ALSONO MORE RES- INTEGRA AND IS COVERED BY THE AFOREMENTIONED DECISI ON OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ABG HEAVY INDUSTRIES L TD. (SUPRA). IN THAT CASE IT WAS THE CONTENTION OF THE REVENUE THAT FOR ASSESSME NT YEAR 1997- 98 AND 1998-9, IT WAS NECESSARY FOR THE, ASSESSEE TO CUMULATIVELY FUFILL THE REQUIREMENT OF DEVELOPING, OPERATING AND MAINTAINING INFRASTRUCTUR E FACILITY. IT WAS PLEADED BY THE REVENUE THAT, EVEN IF IT BE HELD TO HAVE DEVELO PED THE FACILITY IT CANNOT BE REGARDED AS OPERATING THE FACILITY. THEIR LORDSHIPS HAVE REFERRED TO SUCH CONTENTION OF REVENUE IN PARA 19 OF THE DECISION AN D THEY OBSERVED THAT IT IS NOT POSSIBLE TO ACCEPT SUCH SUBMISSIONS. THEIR LORDSHIP S HAVE OBSERVED THAT IT HAS ALREADY BEEN NOTED THAT ASSESSEE HAD AS A MATTER OF FACT DEVELOPED THE FACILITY. THEIR LORDSHIPS AFTER CONSIDERING THE PROVISIONS AN D VARIOUS CIRCULARS OF CBDT AND ALSO THE JUDICIAL PRONOUNCEMENTS HAVE CONCLUDED IN PARA 22 OF THE DECISION THAT AFTER SECTION 80IA WAS AMENDED BY FINANCE ACT, 2001, THE SECTION APPLIES TO AN ENTERPRISE CARRYING ON THE BUSINESS OF (I) DEVEL OPING; OR (II) OPERATING AND MAINTAINING; OR(III) DEVELOPING, OPERATING AND MAIN TAINING ANY INFRASTRUCTURE FACILITY WHICH FULFILLS CERTAIN CONDITIONS. FOR THE SAKE OF COMPLETENESS PARA22 & 23 OF THE DECISION IS REPRODUCED BELOW. 22. ANOTHER SUBMISSION WHICH WAS URGED ON B EHALF OFTHE REVENUE IS THAT UNDER CLAUSE (III) OF SUB-SECTION (4A) OF S ECTION 80-IA, ONE OF THE CONDITIONS IMPOSED WAS THAT THE ENTERPRISE MUST START OPERATING ITA NO. 7078/M/2017 NCC SMC JVA.Y. 2 009-10 5 AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR A FTER 1.4.1995. THE SAME REQUIREMENT IS EMBODIED IN SUB-CLAUSE (C) OF C LAUSE (I) OF SUB- SECTION (4) OF THE AMENDED PROVISIONS OF SECTION 80 IA. ON THIS BASIS IT WAS URGED THAT SINCE THE ASSESSEE WAS NOT OPERATING AND MAINTAINING THE FACILITY, HE DID NOT FULFILL THE CONDITION. THI S SUBMISSION IS FALLACIOUS BOTH IN FACT AND IN LAW. AS A MATTER OF FACT, THE TRIBUNAL HAS ENTERED A FINDING THAT THE ASSESSEE WAS OPERATING T HE FACILITY AND THIS FINDING HAS BEEN CONFIRMED EARLIER IN THIS JUDGMENT . THAT THE ASSESSEE WAS MAINTAINING THE FACILITY IS NOT IN DISPUTE. THE FACILITY WAS COMMENCED AFTER 1.4.1995. THEREFORE, THE REQUIREMEN T WAS MET IN FACT. MOREOVER, AS A MATTER OF LAW WHAT THE CONDITION ESS ENTIALLY MEANS IS THAT THE INFRASTRUCTURE FACILITY SHOULD HAVE BEEN O PERATIONAL AFTER 1.4.1995. AFTER SECTION. 80IA WAS AMENDED BY THE FI NANCE ACT OF 2001, THE SECTION APPLIES TO AN ENTERPRISE CARRYING ON TH E BUSINESS OF (I) DEVELOPING OR(II) OPERATING AND MAINTAINING OR(III) DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILI TY WHICH FULFILS CERTAIN CONDITIONS. THOSE CONDITIONS ARE (I) OWNERS HIP OF THE ENTERPRISE, BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM; (II) AN AGREEMENT WITH THE CENTRAL OR STATE GOVERNMENT, LOCAL AUTHORITY OR STATUTORY BODY; AND (III) THE START OF OPERATION AN D MAINTENANCE OF THE INFRASTRUCTURE FACILITY ON OR AFTER 1.4.1995. THE R EQUIREMENT THAT THE OPERATION AND MAINTENANCE OF THE INFRASTRUCTURE FAC ILITY SHOULD COMMENCE AFTER 1.4.4995 HAS TO BE HARMONIOUSLY CONS TRUED WITH THE MAIN PROVISION UNDER WHICH A DEDUCTION IS AVAILABLE TO AN ASSESSEE WHO DEVELOPS OR OPERATES AND MAINTAINS OR DEVELOPS, OPERATES AND MAINTAINS AN INFRASTRUCTURE FACILITY. UNLESS BOTH T HE PROVISIONS ARE HARMONIOUSLY CONSTRUED, THE OBJECT AND INTENT UNDER LYING THE AMENDMENT OF THE PROVISION BY THE FINANCE ACT OF 20 01 WOULD BE DEFEATED. A HARMONIOUS READING OF THE PROVISION IN ITS ENTIRETY WOULD LEAD TO THE CONCLUSION THAT THE DEDUCTION IS AVAILA BLE TO AN ENTERPRISE WHICH (I) DEVELOPS; OR (II) OPERATES AND MAINTAINS; OR (III) DEVELOPS, MAINTAINS AND OPERATES THAT, INFRASTRUCTURE FACILIT Y. HOWEVER, THE COMMENCEMENT OF THE OPERATION AND MAINTENANCE OF TH E INFRASTRUCTURE FACILITY SHOULD BE AFTER 1.4.1995. IN THE PRESENT C ASE THE ASSESSEE CLEARLY FULFILLED THIS CONDITION (EMPHASIS OURS). 23. IN THE VIEW WHICH WE HAVE TAKEN ALL THE ASSESSM ENT YEARS IN QUESTION TO WHICH THIS BATCH OF APPEALS RELATES WOULD BE GOVERN ED, BY THE SAME PRINCIPLE. THE SUBSEQUENT AMENDMENT OF SECTION 80-I A(4A) OF THE ACT TO CLARIFY THAT THE PROVISION WOULD APPLY TO AN ENT ERPRISE ENGAGED IN (I) DEVELOPING., OR (II) OPERATING AND MAINTAINING: OR (III) DEVELOPING, OPERATING AND MAINTAINING AN INFRASTRUCTURE FACILIT Y WAS REFLECTIVE OF A POSITION WHICH WAS ALWAYS CONSTRUED TO HOLD THE FIE LD. BEFORE THE AMENDMENT THAT WAS BROUGHT ABOUT BY PARLIAMENT BY T HE FINANCE ACT OF 2001, WE HAVE ALREADY NOTED THAT THE CONSISTENT LINE OF THE CIRCULARS OF THE BOARD POSTULATED THE SAME POSITION. THE AMEN DMENT MADE BY PARLIAMENT TO SECTION 80-IA(4) OF THE ACT SET THE M ATTER BEYOND ANY CONTROVERSY BY STIPULATING THAT THE THREE CONDITION S FOR DEVELOPMENT ITA NO. 7078/M/2017 NCC SMC JVA.Y. 2 009-10 6 OPERATION AND MAINTENANCE WERE NOT INTENDED TO BE C UMULATIVE IN NATURE' 10.6 ACCORDING TO AFOREMENTIONED OBSERVATIONS OF TH EIR LORDSHIPS, PRE OR POST AMENDMENT THE REQUIREMENT OF SECTION 80IA(4) IS THA T DEDUCTION WILL BE AVAILABLE AN ENTERPRISE ENGAGED IN (I) DEVELO PING; OR (II) OPERATING ANDMAINTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY AND SUCH POSITION WAS TO BE ALWAYS CONSTRUE TO HOLD THE FIEL D. THEREFORE, ONLY DEVELOPMENT OF INFRASTRUCTURE PROJECT IS SUFFICIENT TO MAKE ENTITL E AN ENTERPRISE TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4). 10.7 IT MAY ALSO BE POINTED OUT THAT THE APPEAL FIL ED BY THE REVENUE FOR A.Y 2004-05 WAS EARLIER ALLOWED BY THE TRIBUNAL ON THE BASIS OF LARGER BENCH DECISION IN THE CASE OF M/S. B.T. PATEL & SONS BELGAUM CONST RUCTION. PVT. LTD. (SUPRA) AND IT WAS BROUGHT TO OUR NOTICE THAT IN VIEW OF THE SUBSE QUENT DECISION OF HONBLE BOMBAY HIGH COURT, LARGER BENCH DECISION WAS NOT FO LLOWED BY THE TRIBUNAL AND THE MATTER WAS DECIDED BY THE TRIBUNAL VIDE ITS ORD ER DATED. 28/2/2013 IN THE CASE OF B.T. PATEL & SONS BELGAUM CONSTRUCTION PVT. LTD.(SU PRA), A COPY OF THIS DECISION WAS PLACED ON OUR RECORD. THE DIRECTIONS OF HONBLE BOMBAY HIGH COURT IN PURSUANCE TO WHICH SUCH ORDER WAS PASSED ARE ALSO D ESCRIBED IN THE ORDER IN PARA-5 AND THE RELEVANT PARA -5 IS REPRODUCED BELOW: 5. THE HONBLE BOMBAY HIGH COURT PERMITTED THE COUN SEL OF THE ASSESSEE TO WITH WITHDRAW THE SAID APPEALS. WHILE PASSING TH E ORDER THE HON'BLE COURT HAS KEPT AD THE CONTENTIONS OPEN AND FURTHER DIRECTED THE TRIBUNAL TO CONSIDER THE DECISION OF THE ABG HEAVY INDUSTRIES AND OTHER DECISIONS WHILE PASSING THEIR ORDER GIVING EF FECT TO THE OPINION OF THE THIRD MEMBER AS PER THE PROVISIONS OF SECTION 2 55(4) OF THE ACT. THE RELEVANT PORTION OF THE SAID ORDER OF HON'BLE JURIS DICTIONAL HIGH COURT IN ITA NO. 1307 OF 2011 FOR A.Y2000-01 AND ITA NO. 1640 OF 2011 FOR A.Y. 2001-02 IS AS UNDER. 1. SINCE THE TRIBUNAL HAS RECALLED THE IMPUGNED ORD ER DATED 23.03. 201 1 THE APPELLANT IS WITHDRAWING I TS APPEAL. 2. FURTHER, WHILE CONSIDERING THE MATTER FRESH, T HE TRIBUNAL WILL TAKE INTO CONSIDERATION ALL DECISIONS INCLUDING THE DECISION OF THIS COURT IN THE MATTER OF CIT V. ABG HEAVY INDUSTRIES LTD. REPORTED IN 322 ITR 323. ALL CONTENTIONS ARE KEPT OPEN.' 3 THE APPEAL IS DISMISSED OF IN ABOVE TERMS. 10.8 IN THE ORDER THE TRIBUNAL AFTER CONSIDERING TH E DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ABG HEAVY INDUSTRIES LTD. (S UPRA) HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. WHILE DECIDING THE PRESENTAPPEAL VIDE ORDER DATED 9/2/2010 IT WAS FOUND BY THE TRIBUNAL THAT BO TH SIDES WERE IN. AGREEMENT THAT THE FACTS AND CIRCUMSTANCES ARE MUTATIS-MUTANTIS SIMILA R TO THOSE CONSIDERED BY THE LARGER BENCH OF THE TRIBUNAL IN THE CASE OF B.T PATEL & SO NS BELGAUM CONSTRUCTION PVT. LTD. (SUPRA). THE SAID ORDER OF THE TRIBUNAL WAS RECALLE D ONLY FOR THE REASON THAT THE LARGER ITA NO. 7078/M/2017 NCC SMC JVA.Y. 2 009-10 7 BENCH DECISION IN THE CASE OF M/SB.T. PATEL & SONS BELGAUM CONSTRUCTION PVT. LTD. (SUPRA) WAS NO MORE GOOD LAW IN THEW OF SUBSEQUENT DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ABC HEAVY INDUSTRIES ( SUPRA), THE ORDER IN THE CASE OF PRESENT ASSESSEE WAS NOT RECALLED FOR THE REASON THAT THERE IS ANY DIFFERENCE IN THE FACTS AND CIRCUMSTANCES OF THE FOR CASE AND THE DECISION IN T HE CASE OF B. T. PATEL & SONS BELGAUM CONSTRUCTION PVT. LTD. (SUPRA). NOW THE DECISION LA RGER BENCH IS NO MORE GOOD LAW AND THE DIVISION BENCH OF THE TRIBUNAL IN THE CASE OF B.T.P ATEL & SONS BELGAUM CONSTRUCTION PVT. LTD. (SUPRA) HAS DECIDED THIS ISSUE IN FAVOUR OF TH E ASSESSEE FOLLOWING THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRIES LTD. (SUPRA). PARA -4 OF THE SAID ORDER IS REPRODUCED BELOW; 14. IN THIS BACKGROUND, THE ASSESSEE COULD CERTAINL Y CLAIM THE DEDUCTIONS WIDER THE PROVISION OF SECTION. 80IA. ONE HAS TO SEE THE SUBSTANCE AND NOT THE FORM ESSENTIALLY, THOUGH IT WAS A JOINT VENTURE, IT WAS CONVERTED INTO ASSESSEE'S VENTURE. THE OTHER VENTURER WITH-DRAW AND THE ENTIR E WORK WAS EXECUTED BY THE ASSESSEE THOUGH IN THE NAME OF JOINT VENTURE. THE J OINT VENTURE IS NOTHING BUT THE VENTURE OF THE ASSESSEE COMPANY AND THE OTHER PERSO N NOT BEING A PARTY AFTER DRAWING THE QUESTION OF JOINT VENTURE DOES NOT ARIS E. THE VENTURE WAS FULLY CARRIED OUT BY THE ASSESSEE COMPANY. TAKING THE SUB STANCE OF THE TRANSACTION, THE ASSESSEE ARE ENTITLED TO ALL THE PROFITS IN RESPECT OF THE CONTRACT EXECUTED BY THEM, HENCE THE ASSESSEE WOULD CERTAINLY HE ENTITLED TO D EDUCTION UNDER THE PROVISIONS OF 80IA AS THEY HAVE FULFILLED ALL THE OTHER CONDITION S. THIS VIEW GET FROM DECISION IN THE CASE OF ITAT, INDORE BENCH, IN CASE OF AYUSH AI AY CONSTRUCTIONS LTD. (SUPRA). THUS, WHILE GIVING EFFECT TO THE OPINION OF THIRD M EMBER U/S.255(4) OF THE ACT, WE TAKE VIEW IN CONFORMITY WITH ORDER OF JURISDICTIONA L HIGH COURT IN CASE OF ABG HEAVY INDUSTRIES LTD. (SUPRA) AVAILABLE AT THIS TIM E THOUGH CONTRARY TO THE OPINION EXPRESSED BY THE THIRD MEMBER. SO IN VIEW OF ABOVE DISCUSSION, FOLLOWING THE RATION OF JURISDICTIONAL HIGH COURT IN THECASE OF A BG INDUSTRIES LTD. (SUPRA), THE ASSESSING OFFICER IS DIRECT TO ALLOW DEDUCTION U/S. 80IA OF THE ACT TO THE ASSESSEE WITH REGARD TO THE PROJECTS IN QUESTION FOR BOTH TH E YEARS, THIS MATTER IS DISPOSED OFF ACCORDINGLY. THEREFORE, ALSO THE ISSUE IS COVERED IN FAVOUR OF T HE ASSESSEE BY THE AFOREMENTIONED DECISION OF CO-ORDINATE BENCH. 10.9 IN VIEW OF ABOVE DISCUSSION, WE HOLD THAT ASSE SSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80IA(4) AND DEPARTMENTAL APPEAL FOR A.Y 200 4-05 AND 2005-06 ARE DISMISSED. 11. SO FOR AS IT RELATE TO APPEALS OF THE ASSESSEES FOR A.Y 2007-08, IT HAS ALREADY BEEN MENTIONED THAT FOLLOWING THE AFOREMENTIONED DECISIO N OF LARGER BENCH IN THE CASE OF B.T.PATEL & SONS BELGAUN CONSTRUCTION PVT. LTD. (SU PRA), LD. CIT(A) HAS HELD THAT ASSESSEE IS NOT ENTITLED TO GET DEDUCTION UNDER SECTION 80IA . IT HAS ALREADY BEEN POINTED OUT THAT THE LARGER BENCH DECISION IN THE CASE OF B.T. PATEL & S ONS BELGAUN CONSTRUCTION PVT. LTD. (SUPRA) IS NO MORE A GOOD LAW AND IN THE CASE OF TH AT ASSESSEE ITSELF, DIVISION BENCH HAS HELD THAT ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. WE HAVE ALREADY HELD THAT ASSESSEE IS ENTITLED FOR DEDUCTIO N UNDER SECTION 80IA(4) IN RESPECT OF A.Y. 2004-05 AND 2005-06. THAT DECISION WILL BE APPLICAB LE FOR A.Y. 2007-08 IN CASE OF BOTH THE ASSESSEE. THEREFORE, THESE APPEALS OF THE ASSESSEES ARE ALSO ALLOWED. ITA NO. 7078/M/2017 NCC SMC JVA.Y. 2 009-10 8 3. CONSIDERING THE DECISION OF THE TRIBUNAL IN ASSE SSEES OWN CASE FOR A.Y. 2007-08 AND AGAIN IN A.Y. 2008-09 WHERE THE ASSESSE E WAS ALLOWED DEDUCTION UNDER SECTION 80IA(4).THUS RESPECTIVELY FOLLOWING T HE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE WE DO NOT FIND ANY ILLEGALITY O R INFIRMITY OF THE ORDER PASSED BY LD. CIT(A). 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/04/2017 SD/- SD/- (SHAMIM YAHYA) (PAWAN SINGH) $ / ACCOUNTANT MEMBER %&$ / JUDICIAL MEMBER MUMBAI; & DATED : 27.04.2017 PS ROHIT KUMAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ) ( ) / THE CIT(A) 4. ) / CIT- CONCERNED 5. &*+&&&, , &, , / D.R, ITAT, MUMBAI 6. +-./ / GUARD FILE / BYORDER, / (DY./ASSTT.REGISTRAR)P , / ITAT, MUMBAI