2016 (7) TMI 204 - AT - Income Tax

Disallowance u/s.80IA(4)- income derived from activity of development of eligible infrastructural facilities - Held that - As decided in assessee s own case for AY 2008-09 the assessees of this kind are deemed fulfilling the conditions specified in the said sub-section (4) of Section 80IA of the Act. It is the finding of the Hyderabad Bench of the Tribunal in the case of M/s KMC Constructions Ltd (2012 (5) TMI 181 - ITAT HYDERABAD ) that the contractor, who undertakes for road Widening of the National Highways from 2 lines to 4 lines, is eligible for deduction u/s 80IA(4) - Decided in favour of assessee

Summary

Issues Involved:
- Disallowance of claim under section 80IA(4) of the Income Tax Act
- Interpretation of law regarding deduction under section 80IA(4) of the Act
- Application of precedents and judgments in similar cases
- Decision on remand matter based on High Court directions

Detailed Analysis:

Issue 1: Disallowance of claim under section 80IA(4) of the Income Tax Act
In the case under consideration, the assessee had filed an appeal challenging the disallowance of the claim made under section 80IA(4) of the Income Tax Act in respect of income derived from the development of eligible infrastructural facilities. The Assessing Officer (AO) had initially held that the assessee was not entitled to claim the deduction under section 80IA(4) of the Act. The First Appellate Authority (FAA) confirmed the AO's order, leading the assessee to appeal before the Tribunal. The Tribunal, after considering various judgments and precedents, directed the AO to allow the deduction under section 80IA(4) to the assessee for the projects in question for the relevant years, based on the interpretation of the law and subsequent developments.

Issue 2: Interpretation of law regarding deduction under section 80IA(4) of the Act
The Tribunal analyzed the provisions of section 80IA(4) of the Act along with the definition of "Infrastructure" and the distinction between a "contractor" and a "developer." It considered the responsibilities and scope of the contract works executed by the assessee, ultimately concluding that the assessee was eligible for the deduction under section 80IA(4) as a developer and not merely a works contractor. The Tribunal also discussed the applicability of various judgments, including the decision of the Jurisdictional High Court and other Tribunal Benches, to support its conclusion regarding the eligibility of the assessee for the deduction.

Issue 3: Application of precedents and judgments in similar cases
The Tribunal referred to a similar case involving Patel KNR, JV, where the Tribunal had decided the identical issue in favor of the assessee. The Tribunal considered the decision in the Patel KNR, JV case and found it relevant to the present matter, indicating consistency in the interpretation of the law regarding deduction under section 80IA(4) of the Act. The Tribunal's decision in the present case was influenced by the findings and reasoning in the Patel KNR, JV case, further strengthening the assessee's position in claiming the deduction.

Issue 4: Decision on remand matter based on High Court directions
The Tribunal, in deciding the issue on remand as per the directions of the High Court, carefully considered the available material and the judgments cited by both parties. It acknowledged the evolving interpretation of the law regarding deductions under section 80IA(4) and emphasized the relevance of subsequent developments in related judgments. The Tribunal's decision to allow the deduction in favor of the assessee was based on a thorough analysis of the facts, legal provisions, and precedents, ensuring compliance with the High Court's directions and the principles of tax law.

In conclusion, the Tribunal's detailed analysis and decision in the present appeals highlight the significance of legal interpretations, precedents, and High Court directions in determining the eligibility of the assessee for deductions under section 80IA(4) of the Income Tax Act. The consistent application of legal principles and the consideration of relevant judgments demonstrate a fair and reasoned approach in resolving the issues raised by the assessee, ultimately leading to the allowance of the appeals in favor of the assessee.