2010 (2) TMI 1313 - AT - Income Tax

Summary

Issues involved: Appeal against denial of deduction u/s.80-IA(4) for a civil contractor in relation to a water supply project.

The judgment pertains to an appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals) granting deduction u/s.80-IA(4) for the assessment year 2004-2005 to a civil contractor involved in a water supply project for Hyderabad Metropolitan Water Supply and Sewerage Board. The Assessing Officer initially denied the deduction, which was later overturned by the CIT(A) in favor of the assessee.

Upon hearing the arguments from both sides and examining the relevant material, the Tribunal found that the case at hand was similar to a precedent set by a Larger Bench in the case of M/s.B.T.Patil & Sons Belgaum Construction Private Limited Vs. ACIT [(2010) 36 SOT 171 (Mum) (LB)], where it was established that deduction u/s.80-IA(4) is applicable only to the developer of an infrastructure facility and not to a contractor. The Tribunal noted that there were no distinguishing features in the facts of the present case compared to the precedent case. Consequently, the Tribunal decided to overturn the order of the CIT(A) and reinstate the decision of the Assessing Officer, ruling that the assessee, being a contractor, was not eligible for deduction u/s.80-IA(4).

In conclusion, the appeal by the Revenue was allowed, and the order was pronounced on February 9, 2010.