NCC SMC UNITY (JV), THANE V. A.C.I.T. CIRCLE 3, THANE

ITA 7398/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79256 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 17-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 03-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 234B; 154

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI .., ! , ' , # BEFORE SHRI I.P.BANSAL, JM AND SHRI RAJENDRA, AM ITA NO.7398/MUM/2011 : ASST.YEAR 2008-09 NCC SMC UNITY (JV), AKRUTI SMC BUILDING, KHOPAT, THANE (W) 400 601 AAGFN 5515M THE ACIT, CIR.3, VARDAAN, WAGLE INDUSTRIAL ESTATE, THANE. ( $% / // / APPELLANT) ' ' ' ' / VS. ( ()$%/ RESPONDENT) $% * + * + * + * + /APPELLANT BY :S/SHRI RAJIV KHANDELWAL / NEELKANT KHANDELWAL ()$% * + * + * + * + /RESPONDENT BY : MS. NEERAJA PRADHAN ' * ,-' / / / / DATE OF HEARING : 17.06.2014 ./0 * ,-' / DATE OF PRONOUNCEMENT : 25 .06.2014 1 1 1 1 / / / / O R D E R PER I.P.BANSAL (JM) : THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-1, THANE DATED 28/2/2011 FOR ASSESSME NT YEAR 2008-09. GROUNDS OF APPEAL READ AS UNDER: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(APPEAL) ERRED IN: I) UPHOLDING THE AOS ACTION IN DISALLOWING THE APPELL ANTS CLAIM FOR DEDUCTION U/S. 80IA OF RS.1,00,47,579/-. II) NOT ACCEPTING THE APPELLANT J.VS CONTENTION THAT IT IS ENTITLED TO CLAIM THE DEDUCTION FOR INFRASTRUCTURE FACILITIES AS LAID DOW N IN SECTION 80 IA. III) NOT DELETING THE INTEREST LEVIED U/S. 234B 2. THE APPEAL IS TIME BARRED BY 144 DAYS. THE ASSE SSEE HAD FILED AN APPLICATION FOR CONDONATION OF DELAY, WHICH IS SUPPORTED BY AN AFFIDAVIT FILED BY SHRI ARUN RAMCHANDRA SHETH, MANAGING DIRECTOR OF THE ASSESSEE COMPANY. THE CONTENTS OF APPLICATION FOR CONDONATION ARE AS UNDER: ITA NO.7398/MUM/2011 : ASST.YEAR 2008-09 2 WE REFER TO THE LETTER DATED 9.8.12 COMMUNICATING T HE DEFECTS MENTIONED THEREIN IN RESPECT OF THE AFORESAID APPEAL IN OUR CASE, FOR IN COME-TAX ASSESSMENT YEAR 2008-09, FIXED FOR HEARING ON 17 TH JUNE, 2014. IN THIS CONNECTION WE WOULD LIKE TO BRING TO YOUR NOTICE THAT - 1.. THE COMMISSIONER OF INCOME-TAX (APPEALS) I. THA NE PASSED AN ORDER DATED 28/2/11 UNDER SECTION 143(3) OF THE ACT. 2. ON PERUSAL OF THE ORDER IT WAS NOTICED THAT THER E WAS AN ERROR IN THE AFORESAID ORDER IN MENTIONING THE NAME OF THE APPELLANT AS NCC SMC JV AND ALSO, IN THE DETAILS OF INCOME AND DEDUCTION FOR THE YEAR UNDER REFERENCE. 3. WE ON 5 TH MAY, 2011 FILED AN APPLICATION FOR RECTIFICATION FOR THE AFORESAID MISTAKES APPARENT ON RECORDS TO THE COMMISSIONER OF INCOME-T AX (APPEALS) -1, THANE. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS) -1 THAN E LATER PASSED AN ORDER DATED 06.09.11 UNDER SECTION 154 RECTIFYING THE AFORESA ID MISTAKES APPARENT ON RECORDS. 5. THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS ) I. THANE UNDER SECTION 154 AS RECEIVED BY US ON 7 TH SEPTEMBER, 2011. 6. WE LATER FILED AN APPEAL BEFORE THE TRIBUNAL. MU MBAI, AGAINST THE AFORESAID ORDER PASSED UNDER SECTION 250 R.W.S 154 BY THE COMMISSIO NER OF INCOME-TAX (APPEALS) I, THANE ON 3 RD NOVEMBER, 2011. 7. WE COULD NOT HAVE FILED AN APPEAL AGAINST THE OR DER OF THE COMMISSIONER OF INCOME- TAX (APPEALS)-1, THANE WITH THE MISTAKES AS CONTAIN ED THEREIN MORE PARTICULARLY, IN THE NAME INASMUCH AS THE TRIBUNAL WOULD NOT HAVE ACCEPT ED THE APPEAL WITH THE MISMATCH IN THE NAME. 3. IT WAS SUBMITTED THAT THERE WAS CERTAIN MISTAKES IN THE ORDER PASSED BY LD. CIT(A) AND FOR RECTIFICATION OF THE SAME AN APPLICA TION WAS FILED. THE ORDER WAS RECTIFIED BY LD. CIT(A) ON 6/9/2011 AND RECEIVED BY THE ASSESSEE ON 7/9/2011. AN APPEAL WAS FILED ON 3/11/2011, WHICH IS WITHIN TWO MONTHS. THEREFORE, IT HAS BEEN PLEADED THAT DELAY SHOULD BE CONDONED. 4. AFTER HEARING BOTH THE PARTIES WE ARE SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR NOT PRESENTING THE APPEAL WITHIN THE PRESCRIBED TIME. THEREFORE, EXERCISING OUR POWER UNDER SECTION 253(5) OF THE ACT WE CONDONE TH E DELAY AND ADMIT THE APPEAL FILED BY THE ASSESSEE. 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 2007-0 8 VIDE ORDER DATED 20/06/2014 IN ITA NO.7885/MUM/2010 WE HAVE HELD THAT ASSESSEE IS ENTITLED TO GET DEDUCTION ITA NO.7398/MUM/2011 : ASST.YEAR 2008-09 3 UNDER SECTION 80IA(4) OF THE ACT. ACCORDINGLY, FOL LOWING THE ORDER OF THE TRIBUNAL IN WHICH BOTH OF US ARE PARTY, WE DIRECT THE AO TO AL LOW DEDUCTION UNDER SECTION 80 IA TO THE ASSESSEE. THE RELEVANT PORTION OF THE SAID ORDER IS REPRODUCED BELOW: 10. WE HAVE HEARD BOTH THE PARTIES AND THEIR CON TENTIONS HAVE CAREFULLY BEEN CONSIDERED. WE HAVE CAREFULLY GONE THROUGH THE A SSESSMENT ORDER FOR A.Y 2004-05 WHICH IS THE BASE YEAR FOR WHICH THE ASSE SSEE IS CLAIMING THAT IT IS ENTITLED TO GET DEDUCTION UNDER SECTION 80 IA(4). THE FIRST AND FOREMOST OBJECTIONS OF THE AO IS THAT ASSESSEE, WHILE EXECU TING THE PROJECT, HAD ACTED IN THE CAPACITY OF A CONTRACTOR, THEREFORE, THE DEDUC TION CANNOT BE ALLOWED TO THE ASSESSEE AS PRE-REQUISITE OF THE SECTION TO ENABLE THE ASSESSEE TO CLAIM DEDUCTION IS THAT HE SHOULD BE A DEVELOPER. 10.1 THE SECOND CONTENTION OF AO IS THAT ASSESSEE HAS ONLY BUILT SOME PART OF THE PROJECT AND IT HAS NEITHER OPERATED OR MAINTAIN ED THE INFRASTRUCTURE PROJECT WHICH IS ALSO A CONDITION PRECEDENT TO GRANT DEDUCT ION UNDER SECTION 80 IA(4). THE AO HAS REJECTED THE CONTENTION OF THE ASSESSEE THAT ITS CASE IS SQUARELY COVERED BY DECISION OF ITAT IN THE CASE OF PATEL EN GINEERING LTD. (SUPRA). AS AGAINST SUCH CASE OF THE AO LD. CIT(A) HAS FOLLOWED MAINLY THE DECISION OF ITAT IN THE CASE OF PATEL ENGINEERING LTD. (SUPRA) AND HAS ALLOWED RELIEF TO THE ASSESSEE. WE HAVE TO EXAMINE THAT WHETHER OR NOT A SSESSEE IS ENTITLED TO GET DEDUCTION UNDER SECTION 80 IA(4) IN THE LIGHT OF AF OREMENTIONED OBJECTION OF THE AO AND PLEA OF THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT AO HAS COMMITTED AN ERROR IN HOLDING THAT ASSESSEE HAS ACT ED AS A CONTRACTOR IN PLACE OF THE CLAIM OF THE ASSESSEE THAT IT HAS WORKED AS A DEVELOPER OF THE INFRASTRUCTURE PROJECT. FOR RAISING SUCH CONTENTIO N THE ASSESSEE HAS PLACED RELIANCE NOT ONLY ON THE DECISION IN THE CASE OF PA TEL ENGINEERING LTD. (SUPRA) BUT ALSO ON THE DECISION OF HONBLE BOMBAY HIGH COURT I N THE CASE OF ABG HEAVY INDUSTRIES LTD. (SUPRA). IT MAY BE MENTIONED HERE THAT AO HAS PASSED THE IMPUGNED ASSESSMENT ORDER FOR A.Y 2004-05 ON 31/3/2 006 WHEN THE BENEFIT OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT V/S ABG HEAVY INDUSTRIES LTD. WAS NOT AVAILABLE. THE ASSESSEE IN THAT CASE DID NOT DEVELOP, OPERATE OR MAINTAIN THE ENTIRE PORT BUT ONLY PART OF THE FUNCTION OF THE PORT WAS DEVELOPED AND MAINTAINED BY THE ASSESSEE. LD. AO IN THAT CASE WAS OF THE VIEW THAT THE ASSESSEE MERELY ENGAGED IN THE BUSINE SS OF SUPPLYING, INSTALLING, TESTING, COMMISSIONING AND MAINTAINING CRANES AT TH E PORT AND WAS NOT IN THE BUSINESS OF DEVELOPING , MAINTAINING AND OPERATING OF PORT. THIS CONTENTION OF THE ASSESSEE IS ALSO RECORDED IN PARA -7 OF THE DEC ISION WHICH HAS ALREADY BEEN REPRODUCED IN THE ABOVE PART OF THIS 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 ARTIFICI ALLY DEFINED FOR THE PURPOSE OF SECTION 80 IA(4) OF THE ACT MUST, THEREFORE, REC EIVED ITS ORDINARY AND NATURAL MEANING. UNDER THE TERMS OF THE CONTRACT BETWEEN T HE ASSESSEE AND JNPT THE ASSESSEE UNDERTOOK AN OBLIGATION TO SUPPLY, INSTA LLING, TESTING, COMMISSIONING AND MAINTENANCE OF CONTAINER HANDLING EQUIPMENTS NA MELY THE CRANES IN QUESTION. THEIR LORDSHIPS IN PARA-17 HAVE OBSERVE D THAT THE OBLIGATIONS WHICH HAVE BEEN ASSUMED BY THE ASSESSEE UNDER THE TERMS OF THE CONTRACT ARE ITA NO.7398/MUM/2011 : ASST.YEAR 2008-09 4 OBLIGATIONS INVOLVING THE DEVELOPMENT OF AN INFRAST RUCTURE FACILITY. SECTION 80 IA(4) OF THE ACT ESSENTIALLY CONTEMPLATED A DEDUCTI ON IN A SITUATION WHERE AN ENTERPRISE CARRIED ON A BUSINESS OF DEVELOPING, MAI NTAINING AND OPERATING INFRASTRUCTURE FACILITY. A PORT WAS DEFINED TO IN CLUDE WITHIN THE PURVIEW OF THE EXPRESSION INFRASTRUCTURE FACILITY. THE OBLIGATI ONS, 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, COMMISSION ING, OPERATION AND MAINTENANCE OF CRANES FOR A TERM OF 10 YEARS, AFTE R WHICH THE CRANES WERE TO VEST IN JNPT FREE OF COST. THE ASSESSEE DID NOT H AVE TO DEVELOP THE ENTIRE PORT IN ORDER TO QUALIFY FOR DEDUCTION UNDER SECTION 80 IA(4). PARLIAMENT DID NOT LEGISLATE A CONDITION IMPOSSIBLE OF COMPLIANCE. 10.3 IF THE FACTS OF THE PRESENT CASE ARE TO BE EX AMINED IN THE LIGHT OF AFOREMENTIONED DECISION OF HONBLE BOMBAY HIGH COUR T, THEN IT CAN BE SAID THAT FOR CLAIMING DEDUCTION UNDER SECTION 80 IA(4), IT I S NOT NECESSARY FOR THE ASSESSEE TO DEVELOP THE ENTIRE PROJECT IN ORDER TO QUALIFY FOR A DEDUCTION UNDER SECTION 80 IA(4). IF THE PROVISIONS ARE SO CONSTRU ED THEN IT WILL BE A CONDITION IMPOSSIBLE OF COMPLIANCE BECAUSE OF THE MAGNITUDE OF THE ENTIRE PROJECT. FOR QUALIFYING DEDUCTION UNDER SECTION 80 IA(4) WHAT WO ULD BE NECESSARY WILL BE THAT THE WORK CARRIED ON BY THE ASSESSEE MUST BE A N INTEGRAL PART OF THE PROJECT AND IF IT IS SO, THEN IT CANNOT BE SAID THAT ASSES SEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IA(4) FOR THE REASON THAT THE ASSE SSEE ON ITS OWN DID NOT DEVELOP AN INFRASTRUCTURE PROJECT. THEREFORE, OBSE RVATIONS OF THE AO THAT ASSESSEE DID NOT DEVELOP AN INFRASTRUCTURE PROJECT AND ONLY PART OF THE WORK WAS CARRIED OUT CANNOT DISENTITLE THE ASSESSEE TO CLAIM THE DEDUCTION. 10.4. THE NATURE OF WORKS CARRIED OUT BY THE ASSE SSEE REGARDING THE PROJECT HAVE BEEN STATED IN PARA-4 OF THE ASSESSMENT ORDER FOR A.Y.2004-05. IT INTER- ALIA INCLUDE MANUFACTURING , SUPPLYING , LOWERING, LAYING, JOINTING, TESTING AND COMMISSIONING OF 2200 MM DIAMETER MS PUMPING MAIN WITH CEMENT MORTAR. IN-LINING & OUT-COATING FROM CLEAR WATER RESERVOI R AT GODAKONDALA TO MBR AT GUNGAL AND SIMILAR ACTIVITIES WERE CARRIED OUT IN R ESPECT OF OTHER PLACES WHICH HAVE BEEN SPECIFIED BY THE AO. THE ACTIVITY OF THE ASSESSEE IS NOT LIMITED ONLY TO CONSTRUCTION OF THE PROJECT BUT AS PER THE TENDE R THE ASSESSEE HAD TO SUBMIT BANK GUARANTEE FOR COMPLETION OF THE CONTRACT AND AS PER CLAUSE-88 OF THE CONTRACT THE ASSESSEE IS ALSO LIABLE FOR LIQUIDATE D DAMAGES AND THE MAXIMUM AMOUNT FOR PENALTY HAS BEEN PRESCRIBED WHICH IS NOT TO EXCEED 5% OF THE CONTRACT VALUE. THERE IS ALSO DESCRIPTION OF D EFECT LIABILITY PERIOD IN CLAUSE-89 WHICH IS THE LIABILITY OF THE ASSESSEE UNDER THE CO NTRACT FOR 24 MONTHS FROM THE DATE OF SUCCESSFUL COMPLETION OF THE WORK AND TAK EN OVER BY VISAKHAPATNAM MUNICIPAL CORPORATION. KEEPING IN VIEW THE ENTIRE TY OF FACTS AND AFOREMENTIONED DECISION OF HONBLE BOMBAY HIGH COU RT, 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 UN DER SECTION 80 IA(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 80 IA(4) IT IS NECESSARY FOR AN ASSESSEE N OT ONLY TO DEVELOP THE PROJECT BUT ALSO TO OPERATE AND MAINTAIN THE INFRASTRUCTURE FACILITY. THIS ISSUE IS ALSO ITA NO.7398/MUM/2011 : ASST.YEAR 2008-09 5 NO MORE RES-INTEGRA AND IS COVERED BY THE AFOREMENT IONED DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ABG HEAVY INDUSTRIES LTD. (SUPRA). IN THAT CASE IT WAS THE CONTENTION OF THE REVENUE TH AT FOR ASSESSMENT YEAR 1997- 98 AND 1998-99, IT WAS NECESSARY FOR THE ASSESSEE T O CUMULATIVELY FULFILL THE REQUIREMENT OF DEVELOPING, OPERATING AND MAINTAININ G INFRASTRUCTURE FACILITY. IT WAS PLEADED BY THE REVENUE THAT, EVEN IF IT BE H ELD TO HAVE DEVELOPED THE FACILITY IT CANNOT BE REGARDED AS OPERATING THE FACILITY. THEIR LORDSHIPS HAVE REFERRED TO SUCH CONTENTION OF REVENUE IN PARA-19 O F THE DECISION AND THEY OBSERVED THAT IT IS NOT POSSIBLE TO ACCEPT SUCH SUB MISSIONS. THEIR LORDSHIPS 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 AND VARIOUS CIRCULARS OF CBDT AND ALSO THE JUDICIAL PRO NOUNCEMENTS 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) DEVELOPING; OR (II) OPERATING AND MAINTAINING; OR ( III) DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY WHICH FULF ILLS CERTAIN CONDITIONS. FOR THE SAKE OF COMPLETENESS PARA-22 & 23 OF THE DECISION I S REPRODUCED BELOW: 22. ANOTHER SUBMISSION WHICH WAS URGED ON BEHALF OF THE REVENUE IS THAT UNDER CLAUSE (III) OF SUB-SECTION (4A) OF SECTION 8 0-IA, ONE OF THE CONDITIONS IMPOSED WAS THAT THE ENTERPRISE MUST START OPERATIN G AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR AFTER 1-4-1995. THE SAME REQUIREMENT IS EMBODIED IN SUB-CLAUSE (C) OF CLAUSE (I) OF SUB-SECTION (4) OF THE AMENDED PROVISIONS OF SECTION 80-IA. ON THIS BASIS, IT WAS URGED THAT SIN CE THE ASSESSEE WAS NOT OPERATING AND MAINTAINING THE FACILITY, HE DID NOT FULFILL THE CONDITION. THIS SUBMISSION IS FALLACIOUS BOTH IN FACT AND IN LAW. A S A MATTER OF FACT, THE TRIBUNAL HAS ENTERED A FINDING THAT THE ASSESSEE WAS OPERATI NG THE FACILITY AND THIS FINDING HAS BEEN CONFIRMED EARLIER IN THIS JUDGMENT . THAT THE ASSESSEE WAS MAINTAINING THE FACILITY IS NOT IN DISPUTE. THE FAC ILITY WAS COMMENCED AFTER 1- 4- 1995. THEREFORE, THE REQUIREMENT WAS MET IN FACT. M OREOVER, AS A MATTER OF LAW, WHAT THE CONDITION ESSENTIALLY MEANS IS THAT THE IN FRASTRUCTURE FACILITY SHOULD HAVE BEEN OPERATIONAL AFTER 1-4-199.. AFTER SECTIO N 80-IA WAS AMENDED BY THE FINANCE ACT OF 2001, THE SECTION APPLIES TO AN ENTE RPRISE CARRYING ON THE BUSINESS OF (I) DEVELOPING; OR(II)OPERATING AND MAI NTAINING, OR (III) DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILI TY WHICH FULFILS CERTAIN CONDITIONS. THOSE CONDITIONS ARE (I) OWNERSHIP OF THE ENTERPRI SE BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM; (II) AN AGR EEMENT WITH THE CENTRAL OR STATE GOVERNMENT, LOCAL AUTHORITY OR STATUTORY BODY; AND (III) THE START OF OPERATION AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY ON OR AF TER 1-4-1995. THE REQUIREMENT THAT THE OPERATION AND MAINTENANCE OF THE INFRASTR UCTURE FACILITY SHOULD COMMENCE AFTER 1-4-1995 HAS TO BE HARMONIOUSLY CONS TRUED WITH THE MAIN PROVISION UNDER WHICH A DEDUCTION IS AVAILABLE TO A N ASSESSEE WHO DEVELOPS; OR OPERATES AND MAINTAINS; OR DEVELOPS, OPERATES AND M AINTAINS AN INFRASTRUCTURE FACILITY. UNLESS BOTH THE PROVISIONS ARE HARMONIOU SLY CONSTRUED, THE OBJECT AND INTENT UNDERLYING THE AMENDMENT OF THE PROVISION BY THE FINANCE ACT OF 2001 WOULD BE DEFEATED. A HARMONIOUS READING OF THE PRO VISION 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 FACILITY. HOWEVER, TH E COMMENCEMENT OF THE OPERATION AND MAINTENANCE OF THE INFRASTRUCTURE FA CILITY SHOULD BE AFTER 1-4- 1995. IN THE PRESENT CASE, THE ASSESSEE CLEARLY FU LFILLED THIS CONDITION ( EMPHASIS OURS). ITA NO.7398/MUM/2011 : ASST.YEAR 2008-09 6 23. IN THE VIEW WHICH WE HAVE TAKEN, ALL THE ASSES SMENT YEARS IN QUESTION TO WHICH THIS BATCH OF APPEALS RELATES WO ULD BE GOVERNED, 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 ENTERPRISE ENG AGED IN (I) DEVELOPING; OR (II) OPERATING AND MAINTAINING; OR (III) DEVELOPING, OPE RATING AND MAINTAINING AN INFRASTRUCTURE FACILITY WAS REFLECTIVE OF A POSITIO N WHICH WAS ALWAYS CONSTRUED TO HOLD THE FIELD. BEFORE THE AMENDMENT THAT WAS BR OUGHT ABOUT BY PARLIAMENT BY THE FINANCE ACT OF 2001, WE HAVE ALREADY NOTED T HAT THE CONSISTENT LINE OF CIRCULARS OF THE BOARD POSTULATED THE SAME POSITION . THE AMENDMENT MADE BY PARLIAMENT TO SECTION 80-IA(4) OF THE ACT SET THE M ATTER BEYOND ANY CONTROVERSY BY STIPULATING THAT THE THREE CONDITIONS FOR DEVELO PMENT, OPERATION AND MAINTENANCE WERE NOT INTENDED TO BE CUMULATIVE IN N ATURE. 10.6 ACCORDING TO AFOREMENTIONED OBSERVATIONS OF TH EIR LORDSHIPS, PRE OR POST AMENDMENT THE REQUIREMENT OF SECTION 80 IA(4 ) IS THAT DEDUCTION WILL BE AVAILABLE AN ENTERPRISE ENGAGED IN (I) DEVELOPI NG; OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAIN TAINING THE INFRASTRUCTURE FACILITY AND SUCH POSITION WAS TO BE ALWAYS CONSTR UE TO HOLD THE FIELD. THEREFORE, ONLY DEVELOPMENT OF INFRASTRUCTURE PROJE CT IS SUFFICIENT TO MAKE ENTITLE AN ENTERPRISE TO BE ELIGIBLE FOR DEDUCTION UNDER SE CTION 80 IA(4). 10.7 IT MAY ALSO BE POINTED OUT THAT THE APPEAL FI LED 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 BELGA UM CONSTRUCTION PVT. LTD.(SUPRA) AND IT WAS BROUGHT TO OUR NOTICE THAT I N VIEW OF THE SUBSEQUENT DECISION OF HONBLE BOMBAY HIGH COURT, LARGER BENCH DECISION WAS NOT FOLLOWED BY THE TRIBUNAL AND THE MATTER WAS DECIDED BY THE T RIBUNAL VIDE ITS ORDER DATED 28/2/2013 IN THE CASE OF B.T.PATEL & SONS BELGAUN C ONSTRUCTION PVT. LTD.(SUPRA), A COPY OF THIS DECISION WAS PLACED ON OUR RECORD. THE DIRECTIONS OF HONBLE BOMBAY HIGH COURT IN PURSUANCE TO WHICH SU CH ORDER WAS PASSED ARE ALSO DESCRIBED IN THE ORDER IN PARA-5 AND THE RELEV ANT PARA -5 IS REPRODUCED BELOW: 5. THE HONBLE BOMBAY HIGH COURT PERMITTED THE C OUNSEL OF THE ASSESSEE TO WITH WITHDRAW THE SAID APPEALS. WHILE PASSING THE ORDER THE HONBLE COURT HAS KEPT ALL THE CONTENTIONS OPEN AND FURTHER DIRECTED THE TRIBUNAL TO CONSIDER THE DECISION OF THE ABG HE AVY INDUSTRIES AND OTHER DECISIONS WHILE PASSING THEIR ORDER GIVING E FFECT TO THE OPINION OF THE THIRD MEMBER AS PER THE PROVISIONS OF SECTION 255(4 ) OF THE ACT. THE RELEVANT PORTION OF THE SAID ORDER OF HONBLE JURIS DICTIONAL HIGH COURT IN ITA NO.1307 OF 2011 FOR A.Y.2000-01 AND 1640 OF 201 1 FOR A.Y 2001-02 IS AS UNDER : 1. SINCE THE TRIBUNAL HAS RECALLED THE IMPUGNED O RDER DATED 23.03.2011, THE APPELLANT IS WITHDRAWING ITS APPEAL . 2. FURTHER, WHILE CONSIDERING THE MATTER AFRESH, T HE TRIBUNAL WILL TAKE INTO CONSIDERATION ALL DECISIONS INCLUDING THE DECI SION 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. ITA NO.7398/MUM/2011 : ASST.YEAR 2008-09 7 10.8 IN THE ORDER THE TRIBUNAL AFTER CONSIDERING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ABG HEAV Y INDUSTRIES LTD. (SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. W HILE DECIDING THE PRESENT APPEAL VIDE ORDER DATED 9/2/2010 IT WAS FOUND BY THE TRIBUNAL THAT BOTH SIDES WERE IN AGREEMENT THAT THE FACTS AND CIRCUMST ANCES ARE MUTATIS- MUTANTIS SIMILAR TO THOSE CONSIDERED BY THE LARGER BENCH OF THE TRIBUNAL IN THE CASE OF B.T.PATEL & SONS BELGAUN CONSTRUCTION PVT. LTD.(SUPRA). THE SAID ORDER OF THE TRIBUNAL WAS RECALLED ONLY FOR THE REASON TH AT THE LARGER BENCH DECISION IN THE CASE OF M/S. B.T.PATEL & SONS BELGAUM CONST RUCTION PVT. LTD.(SUPRA) WAS NO MORE GOOD LAW IN VIEW OF SUBSEQUENT DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ABG 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 PRESENT CASE AND THE DECISION IN THE CASE OF B.T.PATEL & SONS BELGAUN CONSTRUCTION PVT. LTD.( SUPRA). NOW THE DECISION OF LARGER BENCH IS NO MORE GOOD LAW AND THE DIVISION B ENCH OF THE TRIBUNAL IN THE CASE OF B.T.PATEL & SONS BELGAUN CONSTRUCTION PVT. LTD.(SUPRA) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECIS ION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ABG HEAVY INDUSTRIES LTD. (SUP RA). PARA -4 OF THE SAID ORDER IS REPRODUCED BELOW: 14. IN THIS BACKGROUND, THE ASSESSEE COULD CER TAINLY CLAIM THE DEDUCTIONS UNDER THE PROVISION OF SECTION 80 IA. O NE HAS TO SEE THE SUBSTANCE AND NOT THE FORM ESSENTIALLY, THOUGH IT W AS A JOINT VENTURE, IT WAS CONVERTED INTO ASSESSEES VENTURE. THE OTHER V ENTURER WITHDRAW AND THE ENTIRE WORK WAS EXECUTED BY THE ASSESSEE TH OUGH IN THE NAME OF JOINT VENTURE. THE JOINT VENTURE IS NOTHING BUT T HE VENTURE OF THE ASSESSEE COMPANY AND THE OTHER PERSON NOT BEING A P ARTY AFTER DRAWING THE QUESTION OF JOINT VENTURE DOES NOT ARISE. THE VENTURE WAS FULLY CARRIED OUT BY THE ASSESSEE COMPANY. TAKING THE SU BSTANCE OF THE TRANSACTION, THE ASSESSEE ARE ENTITLED TO ALL THE P ROFITS IN RESPECT OF THE CONTRACT EXECUTED BY THEM, HENCE THE ASSESSEE WOULD CERTAINLY BE ENTITLED TO DEDUCTION UNDER THE PROVISIONS OF 80IA AS THEY HAVE FULFILLED ALL THE OTHER CONDITIONS. THIS VIEW GET FROM DECIS ION IN THE CASE OF ITAT, INDORE BENCH, IN CASE OF AYUSH AJAY CONSTRUCTIONS L TD. (SUPRA). THUS, WHILE GIVING EFFECT TO THE OPINION OF THIRD MEMBER U/S.255(4) OF THE ACT, WE TAKE VIEW IN CONFORMITY WITH ORDER OF JURISDICTI ONAL HIGH COURT IN CASE OF ABG HEAVY INDUSTRIES LTD. (SUPRA) AVAILABLE AT T HIS TIME THOUGH CONTRARY TO THE OPINION EXPRESSED BY THE THIRD MEM BER. SO IN VIEW OF ABOVE DISCUSSION, FOLLOWING THE RATION OF JURISDICT IONAL HIGH COURT IN THE CASE OF ABG INDUSTRIES LTD. (SUPRA), THE ASSESSING OFFICER IS DIRECT TO ALLOW DEDUCTION U/S. 80 IA OF THE ACT TO THE ASSES SEE WITH REGARD TO THE PROJECTS IN QUESTION FOR BOTH THE YEARS. THIS MATT ER IS DISPOSED OFF ACCORDINGLY. THEREFORE, ALSO THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE AFOREMENTIONED DECISION OF CO-ORDINATE BENCH. 10.9 IN VIEW OF ABOVE DISCUSSION, WE HOLD THAT ASS ESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80 IA(4) AND DEPARTMENTAL A PPEAL FOR A.Y 2004-05 AND 2005-06 ARE DISMISSED. ITA NO.7398/MUM/2011 : ASST.YEAR 2008-09 8 11. SO FAR AS IT RELATE TO APPEALS OF THE ASSESSEE S FOR A.Y 2007-08, IT HAS ALREADY BEEN MENTIONED THAT FOLLOWING THE AFOREMENT IONED DECISION OF LARGER BENCH IN THE CASE OF B.T.PATEL & SONS BELGAUN CONST RUCTION PVT. LTD. (SUPRA), LD. CIT(A) HAS HELD THAT ASSESSEE IS NOT ENTITLED TO GET DEDUCTION UNDER SECTION 80 IA(4). IT HAS ALREADY BEEN POINTED OUT THAT THE LARGER BENCH DECISION IN THE CASE OF B.T.PATEL & SONS BELGAUN CONSTRUCTION PVT. LTD. (SUPRA) IS NO MORE A GOOD LAW AND IN THE CASE OF THAT ASSESSEE ITSELF, D IVISION BENCH HAS HELD THAT ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80 IA(4) OF THE ACT. WE HAVE ALREADY HELD THAT ASSESSEE IS ENTITLED FOR DEDUCTIO N UNDER SECTION 80 IA(4) IN RESPECT OF A.Y. 2004-05 AND 2005-06. THAT DECISION WILL BE APPLICABLE FOR A.Y 2007-08 IN CASE OF BOTH THE ASSESEES. THEREFORE, T HESE APPEALS OF THE ASSESSEES ARE ALSO ALLOWED. 6. OTHER ISSUE RAISED IS REGARDING LEVY OF INTEREST UNDER SECTION 234B OF THE ACT WHICH IS CONSEQUENTIAL. THE AO IS DIRECTED TO RECA LCULATE THE INTEREST UNDER SECTION 234B AFTER GIVING EFFECT TO THIS ORDER. THIS GROUN D IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL IS ALLOWED IN THE MAN NER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH JUNE, 2014. 1 * ./0 2'3 25/06/2014 / * : SD/- SD/- (RAJENDRA) (I.P.BANSAL) ' ' ' ' / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 2' DATED : 25 TH JUNE, 2014. VM. 1 * (,; < ;0, 1 * (,; < ;0, 1 * (,; < ;0, 1 * (,; < ;0,/ COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. ()$% / THE RESPONDENT. 3. =() / THE CIT, MUMBAI. 4. = / CIT(A)-13, MUMBAI 5. ;@: (,' , , / DR, ITAT, MUMBAI 6. :A B / GUARD FILE. 1' 1' 1' 1' / BY ORDER, );, (, //TRUE COPY// C CC C/ // /D D D D (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI